It makes sense and dollars to buy Nikola Corporation (NKLA) stock

Nikola Corporation (NASDAQ: NKLA) stock jumped 5.44% on Friday to $2.52 against a previous-day closing price of $2.39. With 9.59 million shares changed hands, the volume of the stock remained lighter than its average volume of 11.39 million shares. During the session, the Farm & Heavy Construction Machinery company that operates in wider Industrials sector, reached to the highest price of $2.5500 whereas the lowest price it dropped to was $2.4000. The 52-week range on NKLA shows that it touched its highest point at $11.87 and its lowest point at $2.01 during that stretch. It currently has a 1-year price target of $6.19. Beta for the stock currently stands at 1.44.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of NKLA was up-trending over the past week, with a rise of 0.40%, but this was up by 8.62% over a month. Three-month performance dropped to -13.10% while six-month performance fell -60.13%. The stock lost -70.80% in the past year, while it has gained 16.67% so far this year. A look at the trailing 12-month EPS for NKLA yields -1.71 with Next year EPS estimates of -1.22. For the next quarter, that number is -0.42. This implies an EPS growth rate of -51.10% for this year and -7.00% for next year.

Float and Shares Shorts:

At present, 438.42 million NKLA shares are outstanding with a float of 324.62 million shares on hand for trading. On Oct 13, 2022, short shares totaled 97.44 million, which was 21.39% higher than short shares on Sep 14, 2022. In addition to Mr. Mark A. Russell as the firm’s CEO & Director, Mr. Kim J. Brady serves as its Chief Financial Officer.


Institutional Ownership:

Through their ownership of 28.03% of NKLA’s outstanding shares, institutional investors have minority control over the company. Other institutions hold 7.11% of NKLA, in contrast to 28.38% held by mutual funds. Shares owned by individuals account for 17.87%. As the largest shareholder in NKLA with 5.06% of the stake, The Vanguard Group, Inc. holds 24,237,957 shares worth 24,237,957. A second-largest stockholder of NKLA, Norges Bank Investment Management, holds 17,038,863 shares, controlling over 3.56% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in NKLA, holding 16,476,602 shares or 3.44% stake. With a 3.56% stake in NKLA, the Government Pension Fund – Global is the largest stakeholder. A total of 17,038,863 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.20% of NKLA stock, is the second-largest Mutual Fund holder. It holds 10,513,601 shares valued at 22.71 million. Vanguard Small Cap Index Fund holds 1.80% of the stake in NKLA, owning 8,637,823 shares worth 18.66 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for NKLA since 10 analysts follow the stock currently. There are 3 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 6 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With NKLA analysts setting a high price target of $15.00 and a low target of $2.50, the average target price over the next 12 months is $6.19. Based on these targets, NKLA could surge 495.24% to reach the target high and fall by -0.79% to reach the target low. Reaching the average price target will result in a growth of 145.63% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. NKLA will report FY 2022 earnings on 02/22/2024. Analysts have provided yearly estimates in a range of -$1.04 being high and -$1.80 being low. For NKLA, this leads to a yearly average estimate of -$1.23. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Nikola Corporation surprised analysts by $0.08 when it reported -$0.28 EPS against a consensus estimate of -$0.36. The surprise factor in the prior quarter was $0.02. Based on analyst estimates, the high estimate for the next quarter is -$0.27 and the low estimate is -$0.56. The average estimate for the next quarter is thus -$0.41.

Summary of Insider Activity:

Insiders traded NKLA stock several times over the past three months with 49 Buys and 98 Sells. In these transactions, 3,622,541 shares were bought while 4,456,605 shares were sold. The number of buy transactions has increased to 93 while that of sell transactions has risen to 165 over the past year. The total number of shares bought during that period was 12,142,695 while 6,917,225 shares were sold.

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