Nikola (NASDAQ:NKLA) Shares hit a 52-week low on September 26 and were down as much as 82% year to date as of yesterday’s market close. Today, shares of the electric vehicle (EV) maker skyrocketed, rising more than 25% as of Wednesday afternoon after the company reported file sales for the third quarter. The emphasis on “record” is important here, as you will soon understand.
Nikola is finally selling more trucks
Nikola delivered 88 heavy-duty Class 8 hydrogen fuel cell trucks to its dealers in the third quarter. It was the highest third-quarter revenue ever for the company. Deliveries of 72 fuel cell trucks also increased consecutively in the second quarter.
However, deliveries were within Nikola’s third-quarter target range of 80 to 100 fuel cell trucks. That might make you wonder why the stock was still up double digits on Wednesday. The point is that Nikola has consistently missed its financial targets, so investors may see a silver lining in the company’s latest sales figures that met management’s targets.
Is this the bottom for Nikola stock and time to buy?
Nikola began shipping hydrogen fuel cell trucks in the fourth quarter of 2023 after shifting focus from battery-electric vehicles. So it is still too early to celebrate ‘record sales’. Simply put, if you’re an investor or want to invest in Nikola stock, you’ll want to look beyond today’s headlines.
To be fair, higher sales should increase Nikola’s revenue and limit losses. Nikola generated revenue of about $31 million in the second quarter but reported a gross loss of nearly $55 million, although losses fell sequentially. Nikola has potential because it is the only company selling Class 8 fuel cell EVs commercially in North America.
However, the company has only delivered 235 trucks so far, is burning through cash quickly and is issuing stock to raise money. Those are just some of the factors to consider before jumping into Nikola stock.
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Why Nikola Stock Soared More Than 25% Today was originally published by The Motley Fool
