Sign InNikola Corporation Stock (NKLA): Technical Analysis, Fundamental Evaluation, and Recent News
Summary
Summary (October 2, 2023): Nikola Corporation's stock (NKLA) is currently experiencing a bearish market trend with a decrease in interest from traders, but recent news of its commercial zero-emission vehicle launch could positively impact the stock and potentially lead to a recovery in the next week; however, its current underperformance and volatility warrant a Hold rating, with long-term investors potentially considering a Buy if they believe in the company's business model and monitor the stock closely.
Introduction
Nikola Corporation (Ticker: NKLA) is a company listed on NASDAQ associated with the production and commercialization of zero-emission vehicles. This stock analysis evaluates the technical indicators, fundamental aspects, and recent news that could potentially impact the stock's performance.
Technical Analysis
As of October 2, 2023, NKLA's last traded price was $1.41, a decrease of 10.19% with the lowest price at $1.38 and the highest at $1.57. The changes in pricing indicate a current bearish market trend. However, the average volume of 93.71 million is significantly above the actual trading volume of 60.97 million, suggesting an overall decrease in interest from traders.
The stock has a relative strength index (RSI) of 64, which is close to the overbought threshold of 70, indicating a high chance of a price decrease. With a MACD (3-month) of 0.007908 and an ATR of 14.64, these technical indicators suggest that NKLA experiences considerable price fluctuations.
NKLA is currently trading below its 50-day and 200-day moving averages at $1.70258 and $1.65991, respectively. Historically, stocks trading below these averages might continue to decrease.
The stock has immediate support at $1.395 and resistance at $1.51. The breach either way could indicate a possible trend.
Fundamental Analysis
Nikola Corporation has a market cap of $1.39 billion, with 985.20 million outstanding shares. However, it has a negative earnings per share (EPS) of -1.38 and price to earnings (PE) ratio of -1.02, indicating that the company is not currently profitable.
According to the discounted cash flow (DCF) model, the company's intrinsic stock value should be around $1.93, significantly above the current price, suggesting a possible undervaluation.
The average consensus from analysts predicts a target price between $8 and $12, considerably above the last traded price. The general analyst recommendation for the stock is predominately a 'Buy,' with particular emphasis on the 'Hold' category.
Recent News
Recent news could potentially influence investors' decisions. Nikola recently launched a commercial zero-emission hydrogen fuel cell electric vehicle with a 500-mile range. It implies a positive step towards the realization of its business model and can significantly impact the stock positively. On the flip side, Nikola estimates a need to raise $600 million to become self-sustainable, which may involve selling more shares and potentially diluting the stock value.
Prediction
Given the technical indicators and recent news, the price may experience a decline in the next trading day on October 3, 2023. However, over the next week, a potential recovery towards the $2 range could materialize. This prediction is largely predicated on the momentum around their commercial launch and the overall market sentiment.
Final Evaluation
Considering the above factors, Nikola Corporation's stock (NKLA) is rated as a 'Hold' now due to its current underperformance and volatility. However, long-term investors might consider it as a 'Buy' if they believe in the company's business model, especially after its move towards commercialization. It is important to note, investors should monitor the stock closely due to its possible requirement to raise further capital that could influence its value. As always, these investments should align with the individual's risk tolerance and financial objectives.
