Sign InNikola Corporation's Stock Outlook: Fundamental and Technical Factors Suggest a Cautious 'Hold' Stance
Summary
As of the analysis date, November 2, 2023, Nikola Corporation's stock is currently trading at $1.03 with an 8.41% decrease from its last close, and it is not currently generating profits with a negative P/E ratio, indicating a bearish trend in its trading pattern, while the upcoming earnings announcement and federal funding for green hydrogen may have an impact on its stock performance.
Fundamental Analysis
Nikola Corporation (NKLA) is listed on the NASDAQ exchange. It is currently trading at $1.03, showing an 8.41% decrease from its last close. The company has a market capitalization of $1.02 billion and an EPS of $-1.45. The company's P/E ratio stands at -0.71, which suggests that it is not currently generating profits.
In terms of liquidity, NKLA showed a trading volume of 41.44 million, which is notably lower than its average volume of 80.50 million. This could indicate a lower interest from market participants.
The company's share price reached its highest point for the year at $3.97 and touched a low point of $0.52. Currently, it stands much closer to its Year Low value, signifying a bearish trend in its trading pattern.
NKLA's earnings announcement is slated for November 2, 2023, which may trigger significant movements in its stock price depending on the financial results and future outlook communicated by the company.
The company has received significant analyst coverage, with a consensus recommendation of "Buy." A total of 1 analyst gave a "Strong Buy" recommendation, whereas 6 analysts suggested a "Buy." 2 analysts gave a "Hold" suggestion, which shows their neutral stance towards the stock. No analyst suggested selling the stock.
The implications from recent news coverage suggest a mixed narrative. The company is seen as having ridden the Tesla wave but is now regarded unfortunately as a "Penny Stock." Another piece of news indicates it as a possible beneficiary of Federal funding for green hydrogen.
Technical Analysis
Technically, considering the Relative Strength Index, the RSI14 indicates a value of 17. This is well below the threshold of 30, signaling that the stock may be oversold.
In terms of its moving averages, NKLA is trading below both its 50-day and 200-day moving averages, which stand at $1.41 and $1.60, respectively. This tends to suggest a bearish sentiment for the stock as per trend-following indicators.
The MACD (3-month) stands at 0.093385. Given that this value is positive, it indicates the potential for bullish momentum. However, this should be read in conjunction with other indicators.
The stock has established its support level at $0.91 and resistance at $1.15. These price levels are crucial as they could trigger buying or selling if broken.
Looking at the implied volatility, the ATR (Average True Range) of 14.60 further indicates a higher level of volatility in the stock's price.
Outlook and Recommendations
Predicting the exact prices for the next trading day or upcoming week involves various dynamics and sources of uncertainty. However, if the current technical and fundamental factors prevail, the price may test the support level of $0.91 on the next trading day. If it breaks the support, a further downward trend may follow. In the upcoming week, a reaction to the company's earnings might have significant influence on the price.
Taking into account these factors, along with the current technical and fundamental outlines, the final evaluation of Nikola Corporation's stock stance appears to be on the side of 'Hold.' While there's potential in the company's focus area and the general consensus is to buy, the downward trend suggests a cautious approach. The company's loss-making status and its current proximity to its yearly low is a considerable risk and requires careful observation for signs of a turnaround. Investors should pay close attention to the upcoming earnings announcement and how that impacts the stock's performance.
