Nicola 
N.K.L.A. Recently, it has been one of the most searched stocks on Zacks.com. So it's worth looking at some facts that could shape the stock's performance in the short term.
Shares of the zero-emissions truck pioneer returned -7.4% over the past month versus +5.3% for the Zacks S&P 500. The Zacks Automotive Domestic industry, which Nikola belongs to, has declined 7.7% in this period. The key question here is where the stock is likely to go in the short term.
While media releases and rumors about significant changes in a company's business prospects typically cause its stock to “trend” and lead to immediate price movements, there are some fundamentals that ultimately govern buy-and-hold decisions. There are always facts.
Regarding revisions to performance forecasts
Zacks prioritizes evaluating changes in a company's future earnings expectations above all else. That's because we believe that the present value of future income streams determines the fair value of a stock.
Our analysis is fundamentally based on how the sell-side analysts covering a given stock are revising their earnings estimates to account for the latest business trends. As a company's earnings expectations rise, so does the fair value of its stock. And if a stock's fair value is higher than its current market price, investors will tend to buy the stock, which will cause the stock price to rise. For this reason, empirical research has shown that there is a strong correlation between trends in earnings forecast revisions and short-term stock price movements.
For the current quarter, Nikola is expected to post a loss of $0.09 per share, representing a year-over-year change of +65.4%. The Zacks Consensus Estimate has changed +33.3% over the past 30 days.
Consensus earnings estimate for the current fiscal year of -$0.42 represents a change of +46.8% from the prior year. Over the past 30 days, this estimate has changed by +30.7%.
Next year's consensus earnings estimate of -$0.30 represents a +28.6% change from the earnings Nikola was expected to report a year ago. Over the past month, the forecast has changed by +30.4%.
The Zacks Rank, a proprietary stock evaluation tool with an impressive, outside-audited track record of impressive results, harnesses the power of earnings estimate revisions to be a more conclusive indicator of a stock's short-term price performance. . The magnitude of the recent change in consensus estimates, as well as three other factors related to earnings expectations, earn Nikola a Zacks Rank #2 (Buy).
The chart below shows the evolution of the company's consensus EPS estimate for the next 12 months.
12 months EPS
Expected revenue growth rate
Earnings growth is arguably the best indicator of a company's financial health, but nothing will happen if a company can't grow its revenue. After all, it's nearly impossible for a company to increase profits over a long period of time without increasing revenue. Therefore, it's important to know a company's earnings growth potential.
For Nikola, the current quarter's consensus revenue estimate of $19.68 million represents a year-over-year change of +77%. His $192.43 million and his $533.94 million projections for the current and next fiscal year show changes of +430.4% and +177.5%, respectively.
Last reported results and surprising details
Nikola reported revenue of $11.53 million in its last reported quarter. This represents a year-over-year change of +75.8%. EPS for the same period was -$0.11, compared to -$0.37 a year ago.
The reported earnings are a surprise of -20.55% when compared to the Zacks Consensus Estimate of $14.52 million. EPS surprise was +31.25%.
Over the last four quarters, Nikola has surpassed consensus EPS estimates three times. He's the only time the company has exceeded consensus revenue estimates during this period.
evaluation
You cannot make efficient investment decisions without considering stock valuation. To predict a stock's future price performance, it is important to determine whether the current price accurately reflects the intrinsic value of the underlying business and the company's growth prospects.
The present value of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), and the past value of your company Comparing a company to its peers based on these parameters can help you see if it is overvalued, overvalued or undervalued, but how reasonable its stock is You can get a good idea of what
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) categorizes stocks into five groups, ranging from A to F, with A ranging from B to F. and B is better than C). ), which can help you identify whether a stock is overvalued, fairly valued, or temporarily undervalued.
Nikola is rated 'F' on this score, indicating that it trades at a premium relative to its peers.
conclusion
The facts discussed here, and much of the other information on Zacks.com, may help you decide whether the market buzz about Nikola is worth paying attention to. However, the company's Zacks Rank #2 suggests it has the potential to outperform the broader market in the near term.
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