Returns Breakdown
| Return on Assets | (0.76) | |
| Return on Equity | (1.39) | |
| Return Capital | (1.42) | |
| Return on Sales | (14.64) |
Are NikolaCorp (USA Stocks:NKLA) investors starting to hold back?
 | By Raphi Shpitalnik | Macroaxis Story |
As we approach September 2023, NikolaCorp (NASDAQ: NKLA), a prominent player in the Farm & Heavy Construction Machinery industry, is presenting a unique investment opportunity. Despite the company's current year estimated loss of $0.81 per share, there are indicators of potential growth. With a market valuation of $3.02 billion and a short percentage of 19.26%, NikolaCorp's stock has shown resilience. Analysts, based on five estimates, project a possible upside price of 15.06 per share, a significant leap from the current 50-day moving average of $1.40. The company's beta of 1.8074 further indicates a higher volatility than the market, suggesting potential for higher returns. However, investors should note the company's high short interest, with 129.5 million shares short as of the prior month. The consensus among analysts is a 'Hold' rating, with a target price estimated value of $2.4. The enterprise value of NikolaCorp is projected to see a significant increase, based on its performance over the last few years. The enterprise value stood at $933.55 million in the previous year. The invested capital for the current year is expected to grow to approximately $877.5 million, while the average assets are forecasted to decline to around $977 million.
The primary objective of this article is to provide an in-depth analysis of our current position on NikolaCorp for investors who are considering shorting the stock. We will explore why investors might still want to consider maintaining a stake in the business.
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Reviewed by Ellen Johnson
NikolaCorp has a beta value of 3.7192. This suggests that the company is likely to outperform the market when it is on an upward trend. Conversely, if the market experiences negative returns, NikolaCorp is expected to underperform. The beta indicator is a useful tool for investors as it provides insight into whether NikolaCorp's movements align with those of the overall market, and how its volatility, or risk level, compares to the market (or a selected benchmark). Essentially, if NikolaCorp's performance does not greatly deviate from the market, it doesn't contribute significant risk to the portfolio, but it also doesn't enhance the potential returns.
Additional examination
As of August 2023, NikolaCorp (NASDAQ: NKLA) is trading at $3.02, a significant drop from its 52-week high of $8.97. The company's shares short prior month stands at a staggering 128.8 million, indicating a high level of bearish sentiment in the market. However, with a potential upside of 18.18%, there may be an opportunity for investors willing to take on the risk, given the company's high coefficient of variation of 472.98 and standard deviation of 11.58, which indicate substantial volatility. The Wall Street target price is currently $2.5, lower than the current price, which may indicate a potential loss in the short term. Despite these risks, the Total Risk Alpha of 1.67 and the Treynor Ratio of 0.6557 suggest that the stock could provide a reasonable return for the level of risk involved.There are currently many different techniques concerning forecasting the market as a whole as well as predicting future values of individual securities such as Nikola Corp. Regardless of method or technology, to accurately forecast the stock market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the market sentiment and impact your forecasting results.
Predictive Modules for Nikola Corp
Watch out for price decline
Please consider monitoring Nikola Corp on a daily basis if you are holding a position in it. Nikola Corp is trading at a penny-stock level, and the possibility of delisting is much higher compared to other stocks. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as Nikola Corp stock to be traded above the $1 level to remain listed. If Nikola Corp stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.
How important is Nikola Corp's Liquidity
Nikola Corp financial leverage refers to using borrowed capital as a funding source to finance Nikola Corp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Nikola Corp financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Nikola Corp's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Nikola Corp's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Nikola Corp's total debt and its cash.
Nikola Corp Gross Profit
Nikola Corp Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Nikola Corp previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Nikola Corp Gross Profit growth over the last 10 years. Please check Nikola Corp's gross profit and other fundamental indicators for more details.
An Additional Perspective On Nikola Corp
The current price rise of NikolaCorp may encourage investors to take a closer look at the firm as it is trading at a share price of 3.02 on 89,727,236 in trading volume. The company executives may have good odds in positioning the firm resources to exploit market volatility in September. The stock standard deviation of daily returns for 90 days investing horizon is currently 11.97. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the NikolaCorp partners.
NikolaCorp (NASDAQ: NKLA), a leading player in the Farm & Heavy Construction Machinery industry, presents a potential investment opportunity, despite its current financial challenges. As of August 2023, the company's market capitalization stands at $2.24 billion, with 716.79 million shares outstanding. NikolaCorp's revenue for the year is $50.83 million, yet it is expected to post a loss of $0.81 per share for the current year and $0.5 per share for the next year.Despite these projected losses, Wall Street's target price for NKLA is $2.5, offering a potential upside of 18.18%. The company's total assets amount to $1.24 billion, with a current ratio of 1.75X, indicating its ability to meet short-term obligations. However, investors should note the high probability of bankruptcy at 90.99%, and a Z score of -0.65, indicating financial distress. NikolaCorp's shares are 27.96% owned by institutions, while insiders hold 13.83%. There is a significant short interest in the stock, with 129.5 million shares shorted, representing a short ratio of 1.25X. Despite these risks, the company's Treynor Ratio of 0.6557 suggests that the potential return justifies the risk. With careful consideration, NikolaCorp may offer an intriguing investment opportunity for September 2023. .
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This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Nikola Corp. Please refer to our Terms of Use for any information regarding our disclosure principles.