Nikola (NASDAQ:NKLA) investors won a reprieve earlier this week as the stock rallied into the company’s Q2 2020 earnings disclosure. However, the anticipated announcement proved to be a dud on several levels as the company eschewed revealing key details, thereby, precipitating a massive decline in the stock price. As an illustration, Nikola shares were down over 10 percent in yesterday’s after-hours trading. Today, as of 09:21 a.m. EDT, the stock is still down over 12 percent.
Regardless of the pummeling that Nikola shares are currently enduring, Deutsche Bank appears to be doubling down on its rosy outlook for the company. As a refresher, on the 3rd of August, the bank issued a short-term bullish call for Nikola ahead of its earnings. Deutsche analyst Emmanuel Rosner noted that Nikola may use its first earnings call to announce an OEM partner for the Badger electric pickup truck and provide an update regarding the current status of Badger’s reservations. However, neither of these two much-anticipated disclosures materialized during the earnings call. This lack of material updates did not apparently deter Deutsche. As an illustration, the bank has issued another bullish call today, noting that:
“Nikola's near-term setup remains favorable following the company's Q2 results.”
Given the current pre-market price action, it appears that investors are bent on ignoring the bank’s latest bullish call.
It should be noted that Nikola reported a cash balance of $698 million and revenue of $30,000 for Q2 2020. It also disclosed an adjusted EBITDA loss of $46.98 million and an adjusted EPS of -$0.16. Nikola also incurred a one-time cost of $51.5 million during the period as a result of the merger between Nikola Motors and VectoIQ.
Nonetheless, the company did provide some updates. For instance, it signed a purchase order with Nel for electrolysis equipment capable of producing up to 40,000kg of Hydrogen per day. Moreover, Nikola revealed during the earnings call that its estimated R&D costs for the entire 2020 will range between $190 million and $200 million while its CAPEX in H2 2020 will likely exceed $100 million. Crucially, the company announced that the formal production of Nikola Tre will commence at its facility in Ulm, Germany, in Q4 2021. As far as its upcoming facility in Arizona is concerned, Nikola revealed the first phase of the 1 million-square-foot manufacturing facility will be completed in Q4 2021, with phase 2 entering the consummation phase 12 to 18 months thereafter. Moreover, phase 3 will be completed in 2023. Finally, Nikola revealed that the FCEV version of its product offerings will only enter production in 2023.
In a positive development, however, the Executive Chairman of Nikola Corporation – Trevor Milton – recently revealed via a tweet that the company’s cash balance would swell to $940 million by the end of August 2020 on the back of the ongoing cash exercise of warrants. Nikola has already announced that it will redeem all residual unexercised public warrants on the 21st of August 2020. It is crucial to remember here that private warrants are not currently subject to redemption.
The post Nikola (NKLA) Receives Another Boost From Deutsche Bank Today After the Earnings ‘Nothingburger’ Yesterday by Rohail Saleem appeared first on Wccftech.
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