Nikola (NKLA) AI Stock Analysis

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Nikola

(NASDAQ:NKLA)

Rating:38Underperform

Price Target:―

Nikola's overall stock score reflects substantial financial difficulties, with significant losses, high leverage, and ongoing cash constraints. While there are positive developments in sales and sustainability, these are overshadowed by the pressing financial issues. Technical indicators are bearish, and valuation metrics highlight concerns over profitability. The outlook remains cautious until financial stability is improved.

Positive Factors

Operations

Cash on balance sheet implies the company can operate into 1Q25.

Negative Factors

Cash Flow

The company experienced a higher cash burn rate in the recent quarter, which is a concern for liquidity.

Revenue

Revenue for the quarter was below estimates, partially due to a recall that created a revenue headwind.

Nikola (NKLA) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$16.98M

Dividend YieldN/A

Average Volume (3M)27.04M

Price to Earnings (P/E)―

Beta (1Y)2.52

Revenue Growth141.23%

EPS Growth69.50%

CountryUS

Employees870

SectorIndustrials

Sector Strength92

IndustryIndustrial Machinery

Share Statistics

EPS (TTM)-14.34

Shares Outstanding84,467,750

10 Day Avg. Volume35,999,255

30 Day Avg. Volume27,042,832

Financial Highlights & Ratios

PEG Ratio>-0.01

Price to Book (P/B)0.02

Price to Sales (P/S)0.20

P/FCF Ratio-0.03

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$4.00

Price Target Upside1900.00% Upside

Rating ConsensusHold

Number of Analyst Covering0

Nikola Business Overview & Revenue Model

Company DescriptionNikola Corporation (NKLA) is a designer and manufacturer of zero-emission battery-electric and hydrogen-electric vehicles, energy storage systems, and electric vehicle drivetrains. Headquartered in Arizona, the company is focused on revolutionizing the transportation industry by providing innovative solutions in the commercial trucking sector. Nikola's key offerings include electric and hydrogen-powered trucks, which are designed to reduce carbon emissions and provide sustainable transportation alternatives.

How the Company Makes MoneyNikola Corporation generates revenue primarily through the sale and leasing of its electric and hydrogen-powered trucks. The company aims to capitalize on the growing demand for sustainable transportation solutions by offering advanced vehicles to commercial fleet operators. Additionally, Nikola is involved in the development and sale of hydrogen fuel and refueling infrastructure, which supports its vehicle offerings. The company has entered into various partnerships with industry leaders to enhance its technological capabilities and expand its market reach, contributing to its revenue potential. Nikola's revenue streams are bolstered by government incentives and regulations that favor the adoption of zero-emission vehicles, as well as strategic collaborations with companies that provide components and technology for its vehicles.

Nikola Earnings Call Summary

Earnings Call Date:Feb 20, 2025

(Q3-2024)

% Change Since: -57.45%|

Next Earnings Date:May 13, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted significant achievements in sales and sustainability, with strong customer feedback. However, financial challenges and cash constraints were prominent concerns.

Q3-2024 Updates

Positive Updates

Record Sales of Hydrogen Fuel Cell Electric Trucks

Nikola reported record sales of hydrogen fuel cell electric trucks with a 78% growth in fuel cell electric vehicle fleet adoption and a nearly 350% increase in hydrogen fuel dispensed at commercial stations.

Expansion of Dealer Network

Nikola expanded its dealer network for the first time since the launch of the fuel cell electric vehicle, allowing more access to both Nikola fuel cells and BEVs in Southern California.

Sustainability Achievements

Nikola's trucks have avoided over 6,000 metric tons of CO2 emissions, equivalent to emissions from over 1,500 gasoline-powered cars in a year.

Positive Customer Feedback and Adoption

Positive feedback and increased adoption from national fleet partners like J.B. Hunt, Kenan Advantage Group, and DHL for Nikola's trucks.

Negative Updates

Financial Losses and Cash Constraints

Reported a gross loss of $62 million compared to $55 million in Q2. Unrestricted cash declined by $58 million, with cash only sufficient to meet obligations until Q1 2025.

BEV Returns Impacting Financials

Revenue was negatively impacted by $8 million due to the repurchase of 20 BEVs.

Company Guidance

During the third quarter of 2024, Nikola Corporation delivered several key metrics and guidance highlights. The company reported record sales of 88 hydrogen fuel cell electric trucks, aligning with their guidance range of 80 to 100 trucks for the quarter. Nikola reiterated its year-end guidance for fuel cell electric vehicle deliveries between 300 and 350 trucks. Year-to-date, there was a 78% increase in fuel cell electric vehicle fleet adoption and a 350% rise in hydrogen fuel dispensed at commercial stations. The company achieved a milestone of over 4 million validation miles across its fleet, avoiding more than 6,000 metric tons of CO2 emissions. Nikola continued expanding its dealer network, now totaling 19 locations across the U.S., and emphasized its position as a leading player in North America's heavy-duty fuel cell electric vehicle market with over 90% market share. Additionally, the company plans to deliver 10 HYLA fueling solutions by year-end and has recorded substantial growth in hydrogen dispensing, reaching over 210 metric tons year-to-date.

Nikola Financial Statement Overview

Summary

Nikola is facing significant financial challenges across income, balance sheet, and cash flow statements. The company struggles with profitability and high leverage, posing potential risks to financial stability. While there is revenue growth, the path to sustainable profitability and improved cash flow remains crucial for future viability.

Income Statement

Negative

Nikola's income statement shows significant challenges with negative gross and net profit margins, indicating the company is operating at a loss. The TTM gross profit margin is -305.52% and the net profit margin is -840.35%, reflecting inefficiencies and high costs relative to revenue. While revenue shows growth from previous periods, profitability remains a critical issue.

Balance Sheet

Negative

The balance sheet reveals a high debt-to-equity ratio of 0.93, indicating significant leverage, which may present financial risk. The equity ratio is 36.60%, showing moderate reliance on equity financing. Nikola's return on equity is highly negative at -167.35%, underlining the unprofitability and inefficiency in using shareholders' equity to generate profit.

Cash Flow

Negative

Cash flow metrics are concerning with a negative free cash flow of -573.13 million USD, reflecting cash burn. The operating cash flow to net income ratio is 0.82, indicating that cash earnings are slightly better than accounting earnings, yet both are negative. Free cash flow growth remains negative, pointing to ongoing cash flow challenges.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
75.53M	35.84M	50.83M	95.00K	95.00K	482.00K
	Gross Profit
-230.71M	-214.07M	-104.76M	23.00K	23.00K	211.00K
	EBIT
-579.27M	-649.83M	-748.68M	-693.53M	-368.32M	-88.00M
	EBITDA
-571.28M	-736.28M	-676.99M	-685.29M	-362.31M	-85.67M
	Net Income Common Stockholders
-634.77M	-966.28M	-763.57M	-686.86M	-383.68M	-88.66M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
465.94M	466.36M	233.41M	497.24M	840.91M	85.69M
	Total Assets
1.31B	1.27B	1.24B	989.82M	1.05B	229.43M
	Total Debt
284.86M	284.86M	382.96M	27.45M	18.06M	4.76M
	Net Debt
-181.08M	-179.85M	149.56M	-469.79M	-822.86M	-80.93M
	Total Liabilities
587.48M	555.68M	710.18M	296.25M	66.24M	33.92M
	Stockholders Equity
719.17M	719.17M	526.48M	693.57M	987.48M	195.51M
Cash Flow		Free Cash Flow
-573.13M	-616.69M	-747.43M	-486.42M	-172.86M	-119.93M
	Operating Cash Flow
-517.29M	-496.18M	-576.71M	-307.15M	-150.53M	-80.63M
	Investing Cash Flow
-33.45M	-66.75M	-221.25M	-207.48M	-31.14M	-39.30M
	Financing Cash Flow
376.40M	742.98M	598.68M	187.60M	941.12M	35.80M

Nikola Technical Analysis

Technical Analysis Sentiment

Negative

Last Price0.20

Price Trends

50DMA

0.80

Negative

100DMA

1.77

Negative

200DMA

5.39

Negative

Market Momentum

MACD

-0.21

Negative

RSI

31.34

Neutral

STOCH

7.88

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NKLA, the sentiment is Negative. The current price of 0.2 is below the 20-day moving average (MA) of 0.37, below the 50-day MA of 0.80, and below the 200-day MA of 5.39, indicating a bearish trend. The MACD of -0.21 indicates Negative momentum. The RSI at 31.34 is Neutral, neither overbought nor oversold. The STOCH value of 7.88 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NKLA.

Nikola Risk Analysis

Nikola disclosed 67 risk factors in its most recent earnings report. Nikola reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 3 New Risks

Interest in our common stock from our significant base of retail and other individual investors could result in increased volatility in the market price of our common stock, which could have a material adverse impact on the market price of our common stock and your investment. Q4, 2023

If we fail to satisfy all applicable Nasdaq continued listing requirements, including the $1.00 minimum closing bid price requirement, our common stock may be delisted from Nasdaq, which could have an adverse impact on the liquidity and market price of our common stock. Q4, 2023

We may be unable to issue sufficient additional shares to operate our business, including pursuant to existing potential sources of capital, or strategic transactions, unless we obtain stockholder approval to amend our certificate of incorporation to increase the number of authorized shares of our common stock available for issuance. Q4, 2023

Nikola Peers Comparison

Overall Rating

UnderperformOutperform

Sector (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	66 Neutral	$4.50B	12.28	5.32%	248.52%	4.13%	-12.36%
RIVN	56 Neutral	$16.05B	―	-53.82%	―	0.58%	35.39%
LCID	45 Neutral	$6.56B	―	-50.06%	―	40.67%	3.40%
GOEVQ	40 Underperform	$1.89M	―	-72.67%	―	258.96%	82.54%
NKLA	38 Underperform	$16.98M	―	-167.38%	―	141.23%	69.50%
HYZN	34 Underperform	$5.59M	―	-1357.83%	―	1262.77%	2.83%

* Industrials Sector Average

Performance Comparison

NKLA

Nikola

0.14

-14.71

-99.06%

GOEVQ

Canoo

0.13

-40.67

-99.68%

LCID

Lucid Group

2.15

-0.58

-21.25%

HYZN

Hyzon Motors

0.64

-23.40

-97.34%

RIVN

Rivian Automotive

14.00

2.13

17.94%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.