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Why Nikola Stock Moved Down Then Up Ahead of Tomorrow’s Earnings

What happened
Nikola (NASDAQ: NKLA) shares have been on a downtrend the past week, and those declines continued early today. The stock was off as much as almost 5% at its lows of the day, bringing its five-day drop to over 10% at that point. But a late afternoon rally has the shares up 1.9% as of 3:25 p.m. ET. Today’s moves come just ahead of the company’s quarterly report.
So what
Nikola will provide its 2022 first-quarter update for investors tomorrow before the market opens, and hold a conference call at 9:30 a.m. ET. In its last report for the fourth quarter and full year 2021, the company detailed out the first meaningful revenue forecast in its short history. Investors will focus on whether that projection stands, along with updates on the longer-term projects. 

Image source: Nikola.

Now what
In its last report, the company said it expects to deliver between 300 and 500 of its Tre battery electric vehicles (BEVs) to customers in 2022. That would generate revenue of between $90 million and $150 million, and would mark a major achievement for a company that has struggled with credibility and through much uncertainty.
Investors will focus on whether those numbers still hold, as well as what progress it is making to begin commercial sales of its hydrogen fuel cell electric vehicles (FCEVs). The company is also on a parallel path to build the infrastructure owners of FCEVs will need, including hydrogen fueling stations as well as hydrogen production. 
This week, Nikola reported it is raising $200 million in new financing to put toward those goals. Investors didn’t react well to that news, since it will involve diluting existing shareholders. But the money will go toward growing truck production as well as expanding hydrogen infrastructure.
For the company to be successful over time, it needs to execute that type of growth and expansion. If Nikola gives investors optimistic guidance on its progress, the recent share slide could reverse course pretty quickly, just as it did toward the end of today’s session.
Howard Smith has positions in Nikola Corporation. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. –

What happened

Nikola (NASDAQ: NKLA) shares have been on a downtrend the past week, and those declines continued early today. The stock was off as much as almost 5% at its lows of the day, bringing its five-day drop to over 10% at that point. But a late afternoon rally has the shares up 1.9% as of 3:25 p.m. ET. Today’s moves come just ahead of the company’s quarterly report.

So what

Nikola will provide its 2022 first-quarter update for investors tomorrow before the market opens, and hold a conference call at 9:30 a.m. ET. In its last report for the fourth quarter and full year 2021, the company detailed out the first meaningful revenue forecast in its short history. Investors will focus on whether that projection stands, along with updates on the longer-term projects. 

Image source: Nikola.

Now what

In its last report, the company said it expects to deliver between 300 and 500 of its Tre battery electric vehicles (BEVs) to customers in 2022. That would generate revenue of between $90 million and $150 million, and would mark a major achievement for a company that has struggled with credibility and through much uncertainty.

Investors will focus on whether those numbers still hold, as well as what progress it is making to begin commercial sales of its hydrogen fuel cell electric vehicles (FCEVs). The company is also on a parallel path to build the infrastructure owners of FCEVs will need, including hydrogen fueling stations as well as hydrogen production

This week, Nikola reported it is raising $200 million in new financing to put toward those goals. Investors didn’t react well to that news, since it will involve diluting existing shareholders. But the money will go toward growing truck production as well as expanding hydrogen infrastructure.

For the company to be successful over time, it needs to execute that type of growth and expansion. If Nikola gives investors optimistic guidance on its progress, the recent share slide could reverse course pretty quickly, just as it did toward the end of today’s session.

Howard Smith has positions in Nikola Corporation. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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