Nikola To Gain From State Or Federal Incentive Programs In New Geographies, Analyst Sees New CFO Under CEO Steve Girsky

Baird analyst initiated coverage on Nikola Corporation NKLA with an Outperform rating and $2 price target.

According to the analyst, there is significant potential in the market for zero-emissions trucking, and Nikola has finally found the right management team to capitalize on the opportunity.

The company’s proprietary design and software are key differentiators vs traditional diesel trucks in the analyst’s view. 

The analyst sees potential catalysts ahead for both the Truck and Energy businesses in the form of manufacturing improvements, customer and partnership announcements, and hydrogen infrastructure buildout for Nikola.

The analyst forecasts that the company will name a CFO in the near future, which will fill a key position on the team current CEO Steve Girsky has assembled. 

On the truck side of the business, the analyst sees customer announcements and production improvements as key developments to monitor.

Indirectly, state or federal incentive programs in new geographies could be a positive for the stock, the analyst adds. 

The most likely catalysts for the hydrogen side of the business are infrastructure investments (i.e. hydrogen stations) and partnerships as Nikola works to build the fueling network.

The company’s trucks are equipped with proprietary software, which is an underappreciated piece of their value proposition compared to traditional trucks. 

The Nikola software offering includes several patented (or patent pending) features. The analyst projects FY23 EPS of $(0.89), FY24 EPS of $(0.52) and FY25 EPS of $(0.42).

Price Action: NKLA shares are trading higher by 5.54% to $0.6861 on the last check Wednesday.