Beware These 4 Overvalued Electric Vehicle Companies

To rebuild its tainted reputation, NKLA announced a partnership with General Motors (GM) in September. In the deal, GM was supposed to acquire an 11% stake in NKLA and be a major supplier of hydrogen fuel-cells for NKLA trucks. However, the deal fell through in November. GM dropped the acquisition clause from the deal.

Currently, the have now signed a non-binding Memorandum of Understanding (MoU) under which GM will supply Hydrotec fuel systems for NKLA’s semi-trucks. Also, Republic Services (RSG) ended its partnership agreement with NKLA to develop Refuse trucks on Dec. 23.

NKLA is currently facing a class action lawsuit for violating certain clauses of the Securities Exchange Act, filed in November last year. It is also being evaluated by shareholder rights law firm Johnson Fistel LLP for potential federal securities violations on or before May 8 of last year. Following these developments, NKLA has declined 45% over the past three months.

NKLA is still constructing its manufacturing facilities in Coolidge and Arizona, after which production should begin. It expects the manufacturing center to become operational this year, while the Coolidge facility should be ready to begin production by 2022 at the earliest.

NKLA reported a loss from operations of $117,299 in the third quarter ended Sept. 30, 2020. Its net loss amounted to $117,469, while its net loss per share was $0.31. In terms of forward price/sales, NKLA has recently been trading at 176800x, which is significantly higher than the industry average of 1.57x. Its forward ev/sales ratio of 158430x is significantly higher than the industry average of 1.97x.

Analysts expect NKLA to report negative EPS through the end of 2021. A consensus revenue estimate of $62.48 million for fiscal 2021 represents a124860% rise year-over-year. However, analysts expect the company’s EPS to decline 27.8% this year.

It’s no surprise that NKLA has an overall rating of F, which equates to Strong Sell in our proprietary POWR Ratings system. It has an F grade for Value, Stability, and Quality. NKLA is ranked #48 in the same industry. To see additional POWR Ratings for Growth, Sentiment, and Momentum for NKLA, click here. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

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