Nikola Corp (NKLA, Financial) witnessed a significant stock price surge this week, climbing by 4.03% due to a strategic deployment of hydrogen trucks in collaboration with Diageo and DHL Supply Chain in Illinois. This regional expansion marks a key milestone for the company, diversifying its portfolio beyond the West Coast.
The agreement with Diageo and DHL Supply Chain to deploy two Nikola hydrogen trucks represents Nikola's ambitious foray into the Illinois market. This strategic move is complemented by the installation of a modular refueler on Diageo's campus in Plainfield, Illinois, signaling the company’s commitment to expanding its infrastructure across new regions.
Despite the recent positive momentum, Nikola’s financial fundamentals present a challenging landscape. The current stock price sits at $4.39 with a market capitalization of $222.12 million. The price-to-book (P/B) ratio is at a low 0.41, reflecting a valuation close to its five-year low, potentially indicating an undervalued stock according to some metrics.
However, investors should approach with caution. The company exhibits severe financial warning signs such as an Altman Z-score of -6.18, which places it in the distress zone, suggesting a bankruptcy risk within the next two years. Nikola has been consistently issuing new debt and shares, with $617.783 million in debt and $715.894 million in new shares over the past three years, impacting shareholder value through dilution.
On the positive side, the Beneish M-Score of -3.79 implies that Nikola is unlikely to be manipulating its financial statements, providing a degree of transparency to potential investors. Additionally, the stock remains close to its 52-week low of $3.72, which may attract value investors looking for a potential rebound.
Nikola’s GF Value does not provide a definitive assessment due to a lack of stable earnings history. For more detailed information, refer to the GF Value page.
In conclusion, while Nikola’s strategic expansion into Illinois showcases its growth initiatives, the substantial financial risks highlight the need for careful consideration by investors. The stock’s movement reflects both optimism in its operational strategy and caution derived from its financial health.
