Sign InNikola Corporation's Stock Shows Potential for Upward Movement Amidst Bearish Indicators
Summary
Nikola Corporation's stock price experienced strong selling pressure, but there is potential for an upward movement if the stock maintains its support level at $1.15; high investor activity and recent positive news suggest potential growth, but bearish technical indicators and lack of profitability warrant caution, leading to a Hold rating for the stock.
Technical Analysis
The current price of Nikola Corporation (NKLA) is $1.19, with an intraday change of 3.48% ($0.04). The stock's current range is between the day's low of $1.15 and the high of $1.38. It lies close to the day's low which signifies strong selling pressure. However, the stock shows strong support at $1.15, which might set up for an upward movement if sustained.
Nikola recorded a volume of 268.86 million shares traded, significantly above the average volume of 85.65 million, indicating considerable investor activity around the stock. This high volume could potentially trigger notable price changes.
The 50-day moving average is $1.81, and the 200-day moving average stands at $1.72, both of which are above the current stock price. This could be an indicator of underlying bearish trends. The RSI14 of 44 suggests neither an overbought nor oversold condition. However, the MACD of -0.42 could be a bearish signal.
Fundamental Analysis
The earnings per share (EPS) is -$1.38, indicating a lack of profitability. The negative PE ratio of -0.86 also suggests that the company is not making enough profits to justify its stock price.
The company has a market capitalization of $1.01 billion, and there are around 856.33 million shares outstanding. Nikola's expansion into Canada, as highlighted in recent news, could be a potentially positive business development for Nikola's growth strategy and revenue generation aspect.
The consensus rating among analysts is "Buy," with one strong buy rating, six buy ratings, and two hold ratings. There are no sell or strong sell ratings, reflecting analyst optimism towards the stock. Moreover, the consensus target price is $10 per share, which is significantly higher than the current price levels, suggesting substantial growth potential.
The discounted cash flow (DCF) value is $1.72, suggesting some room for potential growth if financial forecasts for NKLA hold.
Recent News Impact
Recent news of Nikola's strategic partnership with Toronto-based ITD Industries to expand its dealership network into Canada and its reassurances about truck recalls led to a positive sentiment around the stock. This news brought about a 5% rise in morning trading on September 15, suggesting a growing bullish sentiment in the market.
The company's announcement that it expects the first delivery of its hydrogen-fuel-cell-powered Class 8 trucks as early as late September could drive further investor optimism and potentially impact its stock performance in the near term.
Predictions
The continued support level of $1.15 might influence the stock's opening on the next trading day, which is September 18. If the support level is maintained, the stock price might rebound. Based on the company's recent news and market sentiment, one can expect slight upward fluctuations in the stock over the upcoming week, approaching the resistance level of $1.32.
However, due to the overall bearish technical indicators and yet unprofitable operations, there might be continued volatility and uncertain investment returns over a more extended period.
Evaluation
Despite the overall promising news about Nikola's business developments, the company's fundamental and technical indicators denote a cautious approach towards the stock. Given the negative EPS and PE ratio, as well, Nikola Corporation at this moment should be classified as a "Hold." Investors should monitor the company's growth strategy execution, changes in its operational profitability, as well as movements in key technical indicators before considering a position.
