Sign InNikola Corporation's Technical and Fundamental Analysis Point to Bearish Outlook
Summary
As of September 6, 2023, the Nikola Corporation (NKLA) stock price closed at $1.11, experiencing a -5.13% change, with technical indicators suggesting further declines, and while fundamental analysis shows negative EPS and PE ratios, the DCF value suggests undervaluation, leaving the stock in a bearish state and potentially making it a 'Hold' for investors awaiting guidance from the company on its upcoming Fireside Chat.
Introduction
The Nikola Corporation (NKLA) is a provider of zero-emissions transportation and energy supply and infrastructure solutions listed on the NASDAQ exchange.
Technical Analysis
NKLA closed at $1.11 on September 6, 2023, representing a change of -5.13%. The day witnessed a high and low price of $1.17 and $1.1, respectively. With a 52-week high and low of $5.58 and $0.52, there is a significant spread indicating notable shifts in investor confidence levels throughout the year. Moreover, the volume saw a marked drop during the session to 32.38 million shares against an average of 86.35 million such occasions.
From a trend perspective, the stock is trading below its 50-day moving average ($1.85), which is a bearish signal. The same pattern is observed with the 200-day moving average. These bearish signals are confirmed by the MACD (3-month) of -0.48, suggesting potential further declines.
The RSI14 value, currently at 18, suggests NKLA is oversold, idle for some traders watching for bounce-back opportunities. However, caution must be exercised.
Also worth noting are the support and resistance levels at $1.1 and $1.19, respectively, that will be key pivots in the coming sessions.
Fundamental Analysis
On the fundamental side, NKLA has a negative Earnings Per Share (EPS) value of -1.45 and a negative Price to Earnings (PE) ratio of -0.77. This indicates the firm is not profit-making yet, leading to fewer investor confidence. Market Cap stands at $0.95 billion denoting a relatively smaller-sized entity in the market landscape.
NKLA's Discounted Cash Flow (DCF) value stands at $1.64, which is higher than the current price, suggesting the stock could be undervalued. Conversely, recent news about an extensive product recall, legal issues involving the company's founder, and general negative sentiment towards overvalued electric vehicle stocks may put downward pressure on the stock's price.
Further, the company's upcoming 'Fireside Chat' on September 13, 2023, may offer clues about future prospects, providing renewed investor interest.
Analyst Outlook and News
Surveyed analysts give mixed reviews, with a consensus rating of "Buy". The target consensus price stands at $10, significantly above the current price. However, recent news does suggest skepticism surrounding NKLA's performance.
Future Predictions
Based on the above, the prediction would be for NKLA's price to potentially fall further or remain flat on September 7, 2023, given the technical and fundamental indicators. Over the upcoming week, however, any significant news or updates from the Fireside Chat could cause the price to fluctuate.
Final Evaluation
Given the current bearish technical indicators, negative sentiment, and uncertainty concerning recently revealed issues, Nikola Corporation (NKLA) might be considered a 'Hold' at present. Investors might want to wait for further guidance from the company and observe how the stock price reacts to its oversold position. We advise caution, especially considering the potential costs and implications of the recall on its future performance. Yet, an analyst consensus rating of 'Buy' suggests potential long-term upside could still be on the horizon.
