Nikola Corporation Stock under Scrutiny: Mixed Signals Suggest Caution, Hold Recommendation

Introduction

Nikola Corporation (ticker: NKLA), a firm listed on NASDAQ, is currently under scrutiny. The company's stock performance as of August 11, 2023, is being assessed based on several key financial indicators and recent news affecting the company.

Performance Overview

The closing stock price for NKLA on August 11 was $1.95, a small decrease of $0.01 or 0.51% from the previous session. The stock's range for that day was between $1.80 and $1.99. Over the past year, the company's shares have moved between a low of $0.52 and a high of $7.28. The stock's trading volume on the day was 53.29 million shares, lower than its average trading volume of 82.59 million shares.

Market Capitalization and Outstanding Shares

NKLA has a market capitalization of $1.40 billion, and there are about 716.79 million shares in circulation. The company's size and shares outstanding provide a sense of the stock's liquidity and the firm's stability—a higher market cap often marks a lower-risk investment.

Technical Analysis

The 14-day Relative Strength Index (RSI) stands at 44, hinting at a moderate momentum toward either buying or selling. The stock's 50-day moving average is $1.65, below the closing price of $1.95, indicating a possible upward trend. The 200-day moving average of $1.91 also supports this view, though less strongly.

The MACD for the past three months is 0.38, suggesting a bullish trend. Despite these indicators, the stock has a high Average True Range (ATR) of 19.47, signaling high volatility. The main support and resistance levels are at $1.94 and $2.22, respectively, serving as essential levels for upcoming trading sessions.

Fundamental Analysis

NKLA's latest Earnings Per Share (EPS) stood at -$1.4. A negative EPS indicates unprofitable quarters, which could impact investor sentiments. In addition, the Price to Earnings (PE) ratio of -1.39 is unfavorable, as a negative PE ratio is often seen as an indication of negative earnings expectations.

Furthermore, the discounted cash flow (DCF) currently stands at $2.48, which is above the present stock price, suggesting that the stock may be undervalued.

News Analysis

Recent news indicates mixed developments for NKLA. Firstly, the company's announcement of the production of Hydrogen trucks and the appointment of a new CEO infuses positive sentiment. However, the recall of 209 Class 8 battery-electric trucks is a cause for concern, adding uncertainty to the company's operational efficiency. Moreover, Wall Street's indecision about the market trend may indirectly affect the performance of NKLA.

Analyst Recommendations and Targets

Analysts' target high for NKLA stands at $12 with a low of $8, a median, and consensus of $10, suggesting substantial potential upside from the current price level.

Outlook and Recommendation

Based on the data, NKLA's stock seems to be in a transition phase. While technical indicators hint at a bullish turn, fundamental indicators and news sentiment suggest caution. For the immediate next trading day, August 14, 2023, we expect the stock to trend upward slightly, owing to technical indicators but remain in the $1.95 to $2.22 bandwidth, and this trend may continue into the following week.

However, due to the higher volatility and some negative news, investors should be cautious. Therefore, the stock is categorized as a 'Hold', as more positive news and financial indicators are needed to offset any current uncertainties and push towards a 'Buy' recommendation.