Investing in electric vehicles has been a bumpy ride over the last few years and no company is a more prominent example of that than Nikola Corporation. But after a stunning rise and fall, is this EV maker ready to turn things around? Today, we’ll look at the company’s future prospects and discuss a Nikola price prediction over the next five years.
Current Overview of Nikola Stock
Nikola Corp (Nasdaq: NKLA) was founded in 2015 by mercurial entrepreneur Trevor Milton. Milton previously founded an alternative energy vehicle company called dHybrid, which attempted to fit diesel trucks with engines that ran on natural gas. Nikola received a capital infusion from Milton’s previous dHybrid investors. Trying to imitate the success of Tesla Inc. (Nasdaq: TSLA), Nikola borrowed not only its predecessor’s namesake but also its penchant for grandiose promises.
Nikola Corp went public in 2020 through a reverse merger with a special purpose acquisition company (SPAC) and the stock was an instant success. The June IPO price was $37.55 per share and after five days of trading, shares were nearing the $80 mark. A pullback ensued, but shares again breached $50 following a partnership announcement with General Motors Corp (NYSE: GM). However, the bottom fell out before the company completed three months of trading. Following a short-seller report, SEC and DOJ investigations were opened against Nikola and founder Trevor Milton, who was forced to resign in late September. By the end of September, shares had plummeted below $18, erasing all gains from the post-IPO period.
Today, NKLA shares are among the market's dregs. Despite numerous splits over the last few years, the company has lost most of its value and remains one of the most shorted stocks on the Nasdaq. NKLA stock has astonishingly dropped more than 99% since its 2020 heyday. Unadjusted for splits, the previous all-time high in June 2020 was over $2,000 per share – today, the stock is trading under $2 at just $1.76 per share. The company’s market cap is just under $105 million, close to microcap territory and fraud and misconduct still hang over the firm.
Methodology for Nikola Stock Price Prediction
- Technical Analysis - Technical analysis can help you understand and potentially profit from volatile stocks like NKLA. Key technical tools include trend lines, moving averages, Relative Strength Index (RSI), Bollinger Bands and candlestick charts. Trend lines show price direction, moving averages smooth out price data, RSI measures momentum, Bollinger Bands show volatility and candlestick charts reveal patterns.
- Fundamental Analysis – Fundamental analysis evaluates a company's financial health and future prospects to determine its intrinsic value. For a troubled stock like NKLA, this approach can provide valuable insights beyond short-term price fluctuations. Financial performance, debt levels, management quality, industry outlook and competitive landscape are all important metrics to consider when researching stocks. Understanding these factors enables you to make more informed investment decisions.
- Expert Opinions - Stock analysts often provide price targets, which are estimates of a stock's future value. These targets can help investors gauge whether a stock is undervalued, overvalued or reasonably priced. By researching analyst ratings and price targets, investors can understand market sentiment and the potential upside or downside for an NKLA stock forecast. However, it's important to remember that these are just estimates and various factors, including market conditions, company performance and news events, can influence stock prices.
Nikola Stock Price Prediction for 2024
How low can you go? Making an NKLA stock price prediction has been easy in 2024 since shares seemingly cannot stop going lower. The stock’s 52-week high is over $35 per share, but getting back to that point is highly unlikely if you consider the technical signals on the chart.
The stock continues to plummet below important support areas and shares haven’t been above the 50-day moving average since August 2023. Over 21% of the shares had been sold short as of the first week of December and the company continues to make headlines for the wrong reasons following another Nikola BEV truck recall. This is one of the only vehicles the company has actually put on the road since going public in 2020.
While the RSI of 28 indicates the stock is undervalued (and it did bring in a record $31 million in revenue in Q2 2024), poor performance and constantly negative headlines will likely keep NKLA shares in the basement for the rest of the year.
Nikola Stock Price Prediction for 2025
Can Nikola turn things around in 2025? Fundamental figures and industry analysts paint a more promising picture as long as investors temper their expectations. According to Benzinga, only nine analysts remain covering NKLA shares, a far cry from the number that tracked the stock following its 2020 IPO. Based on analyst reports, the stock is a consensus Hold, with an average NKLA price target of $5. A $5 price target seems modest but represents more than 200% upside from the current level. On Nov. 1, Baird came out strong with an Outperform rating and a $10 price target.
It should be noted that all of these price targets have been significantly lowered during the last year, even if the recommendation has remained static. Despite some bullish reports, the company continues to hemorrhage money. Through three quarters in 2024, Nikola has earned only $64 million in revenue and its liabilities continue to balloon. In Q3 2024, the company announced $1.04 billion in assets versus $656 million in liabilities, marking the fourth straight quarter the firm’s debt-to-asset ratio moved in the wrong direction.
Nikola Stock Price Prediction for 2030
Will Nikola even be around in 2030? Right now, it's a legitimate question for investors to ask. Enthusiasm for the electric vehicle stock sector has been muted following Donald Trump's election in November, as the new administration is expected to reduce EV mandates. The company continues to struggle with recalls and former CEO Trevor Milton is still serving a prison sentence for securities fraud.
However, since Milton's ousting, the company has taken a different route. It eliminated most of its truck concepts to focus on two segments: Trucking and Energy. The trucking segment focuses on developing BEV trucks and other commercial vehicles, while the energy segment deals with fueling stations. The company has a long way to go to return to profitability, but new leadership and direction are a positive step forward.
Frequently Asked Questions
Is Nikola stock a good buy?
Right now, it’s difficult to recommend Nikola based on technical, fundamental and expert analysis. The stock has many concerning metrics and analysts rate it a Hold with ever-declining price targets.
Does Nikola have a future?
Nikola’s past and present have been marred by controversy and executive misconduct. However, since the removal of Trevor Milton, the company has slimmed down and focused its expertise on commercial electric trucks and charging stations. The company recorded its best two quarters in terms of revenue in Q2 and Q3 2024.
Is Nikola a long-term buy?
Determining a stock’s outlook like NKLA is always challenging, especially when the company faces internal and external hurdles. However, for investors who believe in the company’s new direction and focus on a smaller product line, NKLA shares could be a major turnaround story in the years ahead.
About Dan Schmidt
Dan Schmidt is a finance writer passionate about helping readers understand how assets and markets work. He has over six years of writing experience, focused on stocks. His work has been published by Vanguard, Capital One, PenFed Credit Union, MarketBeat, and Fora Financial. Dan lives in Bucks County, PA with his wife and enjoys summers at Citizens Bank Park cheering on the Phillies.