Nikola Share Price Forecast December 2021 – Time to Buy NKLA?
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Shares of Nikola (NASDAQ: NKLA) are in the green today, currently at $10.19 as of December 30th (19:59 EST). Nikola may have some light at the end of the tunnel with several recent developments after struggling with a series of difficulties for many months. The company has completed the delivery of its first battery-electric Tre semi tractor trailer to a customer.
Nikola – Technical Analysis
Nikola’s financial statement indicates that the market cap is at $4.146 billion with total assets worth $1.001 billion. Revenue for 2020 was at $95.00K with a profit margin of -418653.68% compared to $482.00k in 2019.
Oscillators such as Relative Strength Index (14)(48.54), Stochastic %K (14, 3, 3)(41.06), Commodity Channel Index (20)(48.35), Average Directional Index (14)(25.51) and Awesome Oscillator(−0.12) are neutral. Moving averages such as Exponential Moving Average (30)(10.42), Simple Moving Average (30)(10.28), Exponential Moving Average (50)(10.73), Simple Moving Average (50)(11.23) and Exponential Moving Average (100)(11.40) are indicating a sell action.
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Recent Developments
Nikola completed the delivery of its first-ever commercial electric vehicle (EV) to California-based Total Transportation Services on Dec. 22., called the Tre BEV truck. It is one of the first four trucks Total Transportation is planning to buy from Nikola in order to test the vehicles. Total Transportation has issued a letter of intent to buy 100 more with 30 in 2022 and the remaining 70 in 2023, depending on successful trials. Heniff Transportation Services has ordered 10 test trucks from Nikola, with 90 more to follow if the test works out satisfactorily.
Nikola’s founder, Trevor Milton faced legal challenges by a federal grand jury on allegations of repeated fraud. According to the allegations, he lied about Nikola’s situation in many different ways to generate interest and drive up the company’s share price. Retail investors were duped and lost hundreds of thousands of dollars as a result. Nikola agreed to pay the SEC $125 million as a civil penalty, broken up into five $25 million payments at regular intervals over the next two years as of December 21st. As a result, Nikola is free from the case.
Should You Buy NKLA Shares?
Semi-trucks currently generate a third of greenhouse gas emissions despite being vastly outnumbered by passenger cars. Nikola’s constant development of prototypes gives the company a chance to establish an early foothold in the emerging electric and hydrogen trailer truck market. Given the current swing toward EVs and government support for their adoption, this is great news for Nikola.
Nikola can establish a solid foothold in a specific market sector (electric semi-tractors) with colossal growth potential. However, this depends on the success of the truck’s initial tests with actual commercial customers and an increase in production capacity. Until we get results from the real-world tests by Total Transportation and Heniff Transportation, Investors are advised to wait.
Nikola’s current low price could be viewed as a good entry opportunity for investors. But this will take atleast three years. Nikola has to move beyond making a few hundred trucks to mass production. Investors need immense patience and has to take in the risk that Nikola’s vehicles may fail to meet expectations.
Investors have plenty of other options such as Tesla which are offering faster and stronger returns. Considering all of this, Nikola looks like a risky stock that needs a lot of things in its favour in the next few years. Thus, now isn’t the right time to buy Nikola shares.
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