Wedbush Is Neutral On Nikola, Waiting For EV To Deliver On Its Promise

Nikola Corporation NKLA looks to bring hydrogen-powered vehicles to industry and consumers. It also has plans to build out a hydrogen refueling station network to support its fleet. 

The Nikola Analyst: Wedbush analyst Daniel Ives initiated coverage on Nikola's stock with a Neutral rating and a $45 price target.

The Nikola Thesis: An electric car manufacturer focusing on heavy-duty freight that also wants to bring hydrogen-powered battery vehicles, and a hydrogen refueling network like Tesla Inc TSLA has done for the electric cars.

Nikola has gained a lot of value, but now it needs to deliver on its promise. With a valuation of approximately $15 billion, and almost no revenue to show, the company has a long way to go. But the success story of Tesla has made a prospect such as Nikola more believable.

Ives believes if Nikola can meet its current roadmap, it will justify its valuation. But if there are delays, Nikola's stock price could take a hit. Ives believes a bull case will be present if Nikola can exceed expectations, and roll out its hydrogen fuel station network more quickly than planned.

An upcoming catalyst for Nikola is the company's Tre BEV truck, which will be unveiled on Sept. 24.

Benzinga's Take: Hydrogen fuel cell hasn't worked for Toyota TM, but maybe a new company can disrupt the space much like Tesla did for the electric vehicle. Wedbush seems to be focusing more on Nikola's industrial-scale trucking to justify the company's valuation. Nikola will also reveal the Badger electric and hydrogen-powered consumer-facing pickup later in 2020.

See Also:

Nikola Founder Urges EV Company's Investors To Exercise Their Warrants

Everything Nikola CEO Mark Russell Said On Benzinga's PreMarket Prep