Checking in on Nikola… Are its Worst Days a Thing of the Past?

For the electric vehicle startup, Nikola (NKLA), 2020 was a roller coaster ride the company never got in line for.

Back in September, Nikola announced that General Motors (GM) would be taking an 11% stake in the company, and leading the production of its recently introduced hydrogen, fuel-cell electric pickup truck, the Badger, set to be released by the end of 2022.

Two days later, Hindenberg Research, took aim at Nikola, accusing the company of fraud and fake marketing tactics, which caused shares of the company to lose much of the ground it had covered since the GM announcement. Then, executive chairman Trevor Milton stepped down after two women, as first reported by CNBC, came forwards with sexual assault claims against Milton.

Finally, with what many thought could be a death blow for the EV startup, GM announced it finally decided to kick Nikola to the curb and pull out of the deal altogether.

Nearly six months later, with Nikola’s stock sitting about 30% lower than its record highs, we have to wonder what the future holds for the company once believed to be a promising part of the EV movement. At its current price, is Nikola a bargain investors should be jumping on, to ride the wave?

Breaking down what Nikola is all about, the company focuses on medium-duty and heavy-duty trucks, primarily hydrogen fuel-cell commercial trucks because it’s the less expensive option. It will also offer a choice between hydrogen cell and battery with high energy density. The company is expecting to launch its first battery-powered truck by late 2021, with the hydrogen fuel cell-powered version available in 2023 and its semi-truck available by the fourth quarter of 2021.

Up and down Wall Street, analysts seem to still be at odds with the troubled EV startup:

According to Market Beat, Nikola currently has five hold ratings and three buy ratings, with the average target price for the stock is $35.8 which implies a possible upside of 71 percent for the stock. Elsewhere, Wedbush analyst Dan Ives upgraded the stock to neutral from underperform on February 1, and raised the target price to $25 from $15, saying:

“We believe most of the negative catalysts we were fearing have now played out in the market with a more balanced risk/reward on the name looking ahead.” 

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