Nikola Corporation's Stock Falls 10% Amid Bearish Outlook and Lack of Profitability
StockInvest.us, 2 months ago
Technical Analysis
As of the close of business on September 20, 2023, Nikola Corporation's (NKLA) stock ended at $1.395 with a trading volume of 90.96 million shares on the NASDAQ exchange. This asset's last recorded change was -$0.16, signifying a -10.00% drop. The price hovered between a low of $1.38 and a high of $1.61 throughout the day.
The recent prices of NKLA stocks have notably fallen below the 50-day moving average of $1.81 and the 200-day moving average of $1.70. Additionally, the Relative Strength Index (RSI14) is denoted at 55, which technically sits in the neutral range but inclines towards being overbought.
The Moving Average Convergence Divergence (MACD) at the 3-month mark reported a negative value (-0.317287). This downward trend could imply a bearish outlook for the stock. NKLA's current support and resistance levels stand at $1.38 and $1.44, respectively, showcasing the short-term trading range for the asset.
Fundamental Analysis
Nikola Corporation sustains a market capitalization of $1.19 billion, with an outstanding shares count of 856.33 million. The EPS (Earnings Per Share) is in a negative room at -$2.00 and simultaneously, the PE (Price-Earnings) ratio also runs in the negative at -0.7. Such signals generally indicate a company's lack of profitability, which could be concerning for some investors.
Despite the negatives, the discounted cash flow (DCF) value is higher than the current stock price at $1.92. This analysis could suggest that the NKLA stock is currently undervalued and presents a potential profit opportunity for value investors.
According to the provided target values, the consensus signals a "Buy" recommendation, with a target consensus price of $10. This implies a significant upside potential from the current levels. Similarly, the fact that there are more 'buy' than 'hold' recommendations also indicates positive sentiment among the majority of analysts.
Relevant News and Predictions
An essential addition to our analysis is the recent news concerning NKLA. Recent releases indicate an active interest in the performance of tech stocks such as NKLA, as well as a wave of controversy regarding several other stocks in the market. Concerns about the survivability of penny stocks in potential market downturns could also apply to NKLA, given its recent underperformance and low price point.
However, despite this and broader downside trends in the market, the consensus still indicates a significantly higher target for NKLA.
Assuming no major changes in market conditions and sentiments, NKLA can be expected to hover around recent support and resistance levels for the next trading day (September 21, 2023). Considering the overall volatility, the prediction for the following week is less certain. Nonetheless, the potential for a rebound remains based on the consensus target and DCF analysis.
Final Evaluation
After a comprehensive review of the technical, fundamental, and news factors, NKLA is deemed as a 'Hold' for risk-averse investors due to the uncertainties related to its underperformance and low profitability. However, more risk-tolerant, value-seeking investors might well consider it a 'Buy' based on its potential undervaluation and positive consensus targets.
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