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Nikola’s 1Q Loss Widens, Management Upbeat About The Future

Nikola (NKLA) reported a first-quarter loss that widened from a year ago, but management continued to sound upbeat about the future. The company develops electric trucks that can run on battery or hydrogen fuel.

Nikola posted a loss of $120 million or $0.14 per share on an adjusted basis. That widened from an adjusted loss of $0.12 per share in a similar period last year.

“During the first quarter Nikola continued to deliver on our previously communicated milestones and execute on our business plan,” said Nikola CEO Mark Russell.

Nikola doesn’t have a vehicle on the market yet, so it recorded no sales for Q1. However, the company is about to start making money. It expects to start selling its battery-powered Nikola Tre trucks in Q4. It targets an initial sale of between 50 and 100 trucks, which should provide up to $30 million in sales revenue. 

Also, Nikola plans to begin work on its first hydrogen fueling station in the coming months. The company secured a contract to supply beer maker Anheuser-Busch with hydrogen fuel-cell trucks. Later this year, Nikola plans to test a prototype fuel-cell truck, participating in a joint beer delivery pilot with Anheuser-Busch InBev. (See Nikola stock analysis on TipRanks)

Ahead of Nikola’s earnings report, Wedbush analyst Daniel Ives reiterated a Hold rating but cut the price target on the stock to $13 from $25. Ives’ new price target implies 13.04% upside potential to the current price.

The analyst believes Nikola’s ambitions are attainable and will benefit from the Biden administration’s programs to support alternative-fuel vehicles. However, doubts set in regarding the company’s ability to stay on course with its targets.

“We still have clear concerns that the execution and timing of these ambitious goals stay on track over the coming years,” commented Ives.

Consensus among analysts on Wall Street is a Hold based on 1 Buy and 5 Hold ratings. The average analyst price target of $19.40 implies 68.70% upside potential.

NKLA scores a 1 out of 10 on TipRanks’ Smart Score rating system, indicating the stock is likely to underperform the market.

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