Nikola stock prediction: what is next for the electric truck maker?
Electric truck maker Nikola's (NKLA) stock price has rocketed more than 32% in the last week to be worth $8.84 today (22 March).
Factors affecting the price are likely to include that hydrocarbon fuel prices have surged making electric vehicles (EV) gain a little more appeal. Also, as the company moves into delivery mode in 2022 it is now seeking more cash from shareholders to boost production.
The proposal heading to its shareholders on 1 June is to issue 200 million shares which would raise close to $1.8bn at the current price.
The key thing for Nikola now is its outlook as it moves from start up mode making prototypes into proper revenue producing production. For example it expects to deliver 300 - 500 production Nikola Tre BEVs to customers in 2022. Nikola was in the slightly unusual position of reporting no revenue for 2021 but a net loss of $159m for the fourth quarter and $690m for the year.
It is also anticipating it will announce the location, break ground, and commence construction of the first hydrogen production hub in Arizona and announce at least two dispensing station partners in California.
So, what's next for Nikola? Can it compete with the other EV purists as well as the powerful traditional forces like GM? Where next for its stock price?
Nikola stock analysis: how has the stock performed?
In September 2020, Hindenburg Research accused the company of being “an intricate fraud” built on “dozens of lies” over the course of founder Trevor Milton’s career. Milton resigned shortly afterwards.
At the end of July 2021, the SEC announced charges against Milton for “repeatedly disseminating false and misleading information”.
In July Milton’s legal team denied the claims saying: “Mr. Milton has been wrongfully accused following a faulty and incomplete investigation in which the government ignored critical evidence and failed to interview important witnesses.”
On the same day Nikola released a statement. “Trevor Milton resigned from Nikola on September 20, 2020 and has not been involved in the company’s operations or communications since that time,” it said.
These problems hit the share price, which dropped below $20 and kept falling. By the middle of August 2021, it was down to $9.44.
In early November, however, the stock was up to $13.81 on hopes that the company would be able to put the dark period behind it. Forlorn hopes perhaps as the price returned to that level by 13 December.
SEC investigation update
As part of its recent third quarter results announcement in early November, Nikola said it had been in discussions with the SEC and expected to pay a $125m civil penalty, to be paid in instalments.
“Final resolution of this matter is subject to documentation satisfactory to all the parties, and completion of any settlement is contingent on a vote of the Commissioners of the SEC,” it stated.
In addition, Nikola said it intended to seek reimbursement from Milton for “costs and damages” in connection with the government and regulatory investigations.
Nikola’s latest financial results
As far as the company’s third quarter results are concerned, it revealed that up to 25 Tre BEV trucks should be delivered to dealers and customers by the end of 2021.
It also said progress had been made in building the sales and service network, with dealers in 28 states spread across more than 130 locations.
Chief executive Mark Russell said the company had “continued to execute” on its business plan during the third quarter.
NKLA stock price prediction: fourth quarter targets
The US designer and manufacturer of zero-emission battery-electric and hydrogen-electric vehicles aims to globally transform the transportation industry. “Nikola is driven to revolutionise the economic and environmental impact of commerce as we know it today,” it has declared.
Nikola also highlighted its key targets for the fourth quarter of 2021.
Nikola stock and industry news
In early October 2021, Nikola announced a collaboration with PGT Trucking, an international multi-service flatbed transportation company to advance electric drive heavy-duty transport.
This agreement includes a Letter of Intent (LOI) to lease 100 Nikola Tre heavy-duty fuel cell electric vehicles (FCEVs), a demonstration program agreed between the two companies.
Gregg Troian, President of PGT Trucking, said: “It is the forward-thinking and strategic partnerships, like we have with Nikola, that allow us to cultivate transportation advancements.”
Pablo Koziner, Nikola’s president, energy and commercial, said: “We believe our FCEVs will help PGT further their objectives to continuously improve driver experience, reduce their carbon footprint and increase the efficiency of their operations while providing great value to their customers.”
On 11 January it announced a deal Covenant Logistics Group, will be adding 50 Nikola vehicles to its fleet with first deliveries in the second quarter and USA Truck is to buy10 Tre BEV trucks from a Nikola dealer, Thompson Truck Centers. And Saia LTL Freight, a "less-than-truckload" company, plans to purchase or lease 100 Nikola Tre heavy-duty battery electric vehicles (BEVs) with the irst 25 being delivered this year.
On 18 January it agreed that leading innovator in commercial vehicle electrification technology, Proterra would supply Nikola's zero-emission semi-trucks with its battery technology.
Also in January Nikola released a run of positive if not exactly earth-shattering news announcements including a deal with leasing and financing solutions provider Corcentric Fleet Funding Solutions to sell leases on its Class 8 Nikola Tre battery-electric vehicles (BEVs) and Nikola Tre hydrogen fuel cell electric vehicles (FCEVs).
However its stock price was then knocked back again when the car making giant General Motors announced on 1 February that it was going to up its proposed $35bn spend on developing EV spend to accelerate its launch programme of new EVs. It is also planning a fourth electric vehicle battery plant by the end of June, and plans to invest in a third electric truck assembly plant.
Nikola stock prediction: a fast-developing industry
It’s worth noting that Nikola is operating in an industry that’s expected to grow rapidly over the coming years as the world moves more towards electric vehicles.
The market for medium and heavy duty electric trucks is predicted to reach $171bn over the next 20 years, according to a report from IDTechEx, an independent market research provider.
Its study, entitled Electric Trucks 2021-2041, noted an increasing number of cities and nations were targeting a “complete phase out” of diesel and petrol-fuelled vehicles on their roads.
It predicts the cost of electric trucks will decrease due to falling battery prices and economies of scale savings on components.
Nikola share price forecast: what do the analysts say?
According to Danni Hewson, financial analyst at AJ Bell, Nikola seems to be making some progress in its bid to put its substantial troubles behind it.
She believes there is still a degree of excitement about the technology Nikola is developing if the trucks make it to the open road.
Hewson believes it’s now up to the company to deliver.
In a broker note, Bill Peterson, an analyst at JP Morgan, said Nikola was executing well amid a tough supply environment that’s likely to persist well into next year.
He has a ‘neutral’ rating on the company’s shares.
In a recent note Daniel Ives, an analyst at Wedbush, said the company’s success in executing and delivering its hydrogen trucking vision over the coming years would be crucial.
He also warned that the chip shortage would be a near term overhang for the business.
Nikola Corporation share price forecast: NKLA stock price targets
What is the future of Nikola stock? It’s clear that challenges remain for the company, which you need to keep in mind if you’re building a longer term Nikola stock forecast for 2022, 2023, 2025 or even 2030.
According to Wallet Investor’s algorithm-driven Nikola stock projection, as of 22 March NKLA stock was a “bad long-term (one year) investment” that would become effectively worthless over the next 12 months.
However, Market Beat's eight analyst consensus was hold. It sees an upside potential over the coming year of 54%, with a consensus price target of $13.63. The highest 12-month projection was $24. The lowest price target, meanwhile, suggested a fall to $8.
When looking for Nikola stock predictions, bear in mind that analysts’ forecasts can be wrong. Analyst projections are based on making a fundamental and technical study of the company’s performance. Past performance never guarantees future results.
Do your own research and always remember your decision to trade depends on your attitude to risk, your expertise in this market, the spread of your investment portfolio and how comfortable you feel about losing money. And never invest more than you can afford to lose.
FAQs
Is Nikola a good investment?
Whether Nikola is a suitable investment for you will depend on your personal research and trading strategy. You need to perform your own due diligence and decide if the stock meets your needs and appetite for risk.
Will Nikola stock go up?
There are no guarantees. A stock’s performance depends on a number of variables. It’s crucial to carry out your own analysis to form an opinion of a company’s performance and the likelihood of it achieving analysts’ targets.
How high might Nikola stock go?
This depends on a number of factors, including how far ahead you’re looking. Remember, analysts can be wrong. It’s important to carry out your own research before making any trading decision. And never invest money you cannot afford to lose.
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