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Nikola (NKLA) stock slump offers an attractive entry point

Nikola stock

Nikola (NASDAQ: NKLA) stock price is offering an attractive entry point in analyst’s view as the shares of zero-emissions transportation systems provider lost almost half of its value since hitting an all-time high of $93 last month.

It is among the closest competitors of the world’s largest and well-known zero-emissions transportation systems provider Tesla (NASDAQ: TSLA).

Tesla has better market share and infrastructure then Nikola. Despite a small size, Nikola has been looking to expand its market share through the introduction of new vehicles and accelerating its presence in global markets.

The shares rallied sharply since electric heavy-truck maker Nikola begun trading on the Nasdaq following its merger with VectoIQ (VTIQ). Nikola stock is currently trading around $38.

NKLA Nikola Corporation daily Stock Chart
Nikola Corporation share price movement. Finviz.com chart.

Positive commentary from market analysts has added to Nikola stock price performance.

Cowen analyst Jeffrey Osborne said, “We see Nikola as an intriguing investment opportunity, leveraging one truck platform, 2 power train options, and 3 business segments, with optionality in powersports, pickups, and AVs.”

Although JP Morgan claims that Nikola shares are fully valued, the firm sees strong future fundamentals for this zero-emissions transportation systems provider.

“NKLA is poised to disrupt the transportation industry with the rapid deployment of hydrogen infrastructure and FCEV powered vehicles for use on long haul trucking routes,” says JP Morgan analyst Paul Coster.

Meanwhile, Deutsche Bank suggests investors buy the dip following the massive selling pressure in the past few weeks. Deutsche Bank analyst Emmanuel Rosner believes that Nikola is an exceptional play on zero-emission commercial trucks. He also predicts strong zero-emission transportation adoption in the coming years.

The latest selloff is only due to investors’ concerns about stock sales related to warrants. It filed to offer up to 23.9M shares. The filing also shows future plans of selling up to 53.39M of common stock and around 890,000 warrants. The company has originally issued private warrants in a private placement tied to the IPO of VectoIQ.

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Author

Siraj is a finance writer based in Saudi Arabia with a strong understanding of and passion for the stock market, cryptocurrency, economics, and finance. He has worked for international clients for many years on several projects related to the stock market, equity research, accounting, and finance. Siraj is a published financial analyst on some of the largest finance websites.