Nikola's Stock Falls as Revenue Doubles but Misses Forecasts

Nikola Corp. experienced a decline in its shares on Thursday, despite surpassing fourth-quarter earnings expectations at the bottom line. The manufacturer of battery- and hydrogen-powered trucks witnessed a significant increase in revenue, more than doubling its figures, although it fell short of the anticipated forecasts.

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During this quarter, the company proudly announced the delivery of its inaugural hydrogen fuel cell electric truck. Throughout the period, a total of 35 trucks were delivered, effectively depleting the company's inventory to zero finished goods. CEO Steve Girsky highlighted an impressive demand for their fuel cell truck in California, emphasizing that Nikola received more requests for this specific model than the combined total of all other truck original equipment manufacturers in the same period, encompassing both battery and hydrogen fuel cell electric trucks.

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Despite these achievements, Nikola's stock, NKLA, experienced a 1.1% drop in morning trading, continuing its trend of closing below the $1 level in every session since December 5.

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The market's response mirrors the trend observed in the shares of other electric vehicle manufacturers that released their results after Wednesday's market close. Rivian Automotive Inc. saw its stock, RIVN, plummet by 23.5%, while Lucid Group Inc. shares, LCID, experienced a 9.3% decline. Meanwhile, industry leader Tesla Inc., represented by stock symbol TSLA, faced a more modest loss of 0.9%.

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Examining the financials for the quarter ending on December 31, Nikola reported a narrowing of net losses to $153.6 million, equivalent to 14 cents per share. This represents a notable improvement compared to the $222.1 million in net losses, or 46 cents per share, recorded during the same period the previous year. Adjusting for nonrecurring items, the adjusted per-share loss was 11 cents, surpassing the FactSet consensus of 13 cents.

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Although total revenue soared by 111.1% to $11.53 million, it fell short of the FactSet consensus of $13.2 million. The decline in revenue may be attributed to a decrease in the number of trucks produced, dropping from 133 to 42, offset by an increase in the number of trucks shipped, rising from 20 to 35.

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Addressing the recall of trucks announced in August 2023 due to a battery issue, Nikola assured investors that it remains on track to deliver the first "re-worked" battery-electric trucks, equipped with new battery packs, by the end of the first quarter. CEO Girsky expressed confidence in returning all trucks to end-user fleets by the end of the second quarter or early in the third quarter.

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Over the past three months, Nikola's stock has experienced a significant decline of 26.1%. In contrast, the Global X Autonomous & Electric Vehicles ETF has demonstrated a gain of 3.6%, while the broader market, represented by the S&P 500 index, has advanced by 10.7%.

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