Nikola A "Pure" Zero Emissions Investment States Deutsche With A $54 Price Target

Electric vehicle designer Nikola Corporation (NASDAQ:NKLA) has been in the limelight these past few months as it opened orders for its Badger truck and provided new details about its other products. Nikola, which does not have a product available for auction to the public, is known for desultory highs and lown on the stock market – as traders and investors speculate most the visitor's hereafter.

Now, Deutsche Bank has initiated coverage of the visitor and set a $54/share price target for the company. The visitor currently has several products on its portfolio, ranging from semi-trucks to pickup trucks and it intends to start selling these products in 2021 and scale these up over the grade of the post-obit years.

Nikola Price Target Mirrors Company's Closing Cost Yesterday As Analyst Estimates 15,000 Truck Shipments In 2025

The Deutsche analyst responsible for the bank's Nikola coverage is Emmanuel Rosner and he's out with a new annotation that sounds cautiously optimistic. Rosner believes that for those investors who wish to fund the commercial emissions-free truck revolution, Nikola is an excellent stock to put their money in. Additionally, the analyst too provides a 'Hold' rating for the stock as he recommends electric current investors and traders that are belongings the stock to maintain their $NKLA holdings.

Nikola can potentially ship 15,000 vehicles by the terminate of 2020 believes the Deutsche analyst, in order to generate $4.vi billion in acquirement and $546 million in earnings before interest, taxes and depreciation (EBITDA) for an EBITDA (operating profit) margin of 11.8%. Nikola's own investor presentation released at the finish of this year's commencement calendar quarter pegs the company to ship 12.000 vehicles in North America at the finish of 2024 to rake in $3.2 billion in revenue and eke out $145 million worth of EBITDA for a 6.6% EBITDA margin.

Deutsche's revenue estimates appear to be for global sales and therefore it isn't pertinent to compare them with Nikola's own figures for 2024. Withal, what is apropos is the operating margin cited past the banking concern which is nearly double of what Nikola expects for itself in North America in 2024.

Slide 31 from Nikola Corporation'southward investor presentation released in March shows the visitor'due south acquirement estimates. (Image Credit: Nikola Corporation)

Rosner also accepts market concerns nearly Nikola beingness unable to deliver a product then far equally he states that while the company's Enterprise Value-to-Sales (EV/Sales) ratio is similar to Tesla and NIO, the facts that Nikola is still to manufacture a unmarried product or operate a manufacturing facility leaves the company with a "large execution run a risk".

For its part, Nikola plans to officially open up a manufacturing facility in Arizona afterward this month and the company has already commenced orders for its Badger pickup truck – a move that proved controversial when Nikola's founder Trevor Milton failed to disclose the actual number of pre-orders sold and the move send the company's share price in a downward spiral during open up market trading at the very first of this month.

Equally the visitor he helped create is piquing public interest, Mr. Milton himself has started to attract his fair share of controversy. The founder, who currently serves as Nikola's executive chairman, is regularly lambasted by his critics who claim that his cognition of technological principles required for building complex products such as those that Nikola makes is rudimentary at all-time.

The executive has countered these claims by stating that he prefers to proceeds hands-on cognition instead of theoretical, book-based noesis that is imparted to college students. Like the Palo Alto, California-based electrical vehicle and renewable energy products manufacturer Tesla Inc's chief executive officer Mr. Elon Musk, Mr. Milton has also taken investors betting against his company (termed 'short-sellers') publicly to task on social media platform Twitter.

But while Mr. Musk'southward Tesla basks in Wall Street's optimistic attending on the dorsum of a surprising vehicle delivery beat, Nikola's futurity is uncertain as noted by the Deutsche analyst in his note. He also believes that the company'due south electric current share price is reflective of its medium-term revenue opportunity and does not discount the risks inherent to it due to a lack of products and manufacturing facilities.