Nikola’s stock rebounds from recent losses as electric-truck producer gets an outperform rating

Electric-vehicle stocks have been moving down lately amid reduced demand, with Ford Motor Co. F, -0.51%, for one, reporting a wider-than-expected adjusted loss of $1.3 billion for its EV unit.

Earlier this month, Hertz Global Holdings Inc. HTZ, -3.24% said it would sell roughly 20,000 EVs from its rental-car fleet in another sign of trouble in the sector.

Nikola’s stock has fallen 21% so far in 2024, including its rebound on Wednesday. The stock has been trading around and under $1 a share since October. In the last 52 weeks, it has traded as low as 52 cents a share and as high as $3.71 a share.

Nikola’s leadership team, which took over in August when former General Motors Co. GM, +1.70% executive Steve Girsky became chief executive, marks a positive development for the company, Kallo said.

“We see significant potential in the market for zero-emissions trucking and believe [Nikola] has finally found the right management team to capitalize on the opportunity,” Kallo said.

Nikola’s assets include proprietary design and software as “key differentiators” compared with traditional trucks, he said.

“[Nikola’s] trucks are equipped with proprietary software, which we believe is an underappreciated piece of their value proposition,” he said.

Kallo said he also sees “potential catalysts” for Nikola’s truck and energy units through manufacturing improvements, customer and partnership announcements and the build-out of hydrogen infrastructure for its hydrogen-powered trucks. The company also makes battery-powered trucks.

Kallo is keeping an eye on Nikola’s cash burn and liquidity, however.

The company has about $617 million to tap, and it will spend about $540 million in 2024.

“[We] believe the company will come back to market in the intermediate term to strengthen its liquidity position and bridge the gap to break-even,” he said.

Looking ahead, Nikola will likely name a financial chief in the near future as part of Girsky’s team.

Nikola is also expected to announce customers and production refreshes as “key developments to monitor,” Kallo said.

Including Wednesday’s moves, Nikola’s stock is down by 73.7% in the past year, while the Nasdaq COMP is up by 37.8% during the same time period.

Also read: Nikola’s stock up on deal for hydrogen-fuel infrastructure