Is Nikola (NKLA) Poised to Beat Earnings Estimates in Q2?

Nikola Corporation NKLA is slated to release second-quarter 2020 results on Aug 8, after the closing bell. This will be the first time that the electric-truck startup will be reporting quarterly numbers as a public company. The Zacks Consensus Estimate for the quarter’s loss has remained stable over the past 30 days at 14 cents per share. The consensus mark for Nikola’s second-quarter revenues is pegged at $60,000.

Earnings Whispers

Our proven model predicts an earnings beat for Nikola for the to-be-reported quarter, as it has the right combination of two key ingredients. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Nikola has an Earnings ESP of +3.70%. This is because the Most Accurate Estimate of loss is pegged a penny below the Zacks Consensus Estimate.

Zacks Rank: It carries a Zacks Rank of 3 currently.

Factors at Play

Hydrogen truck maker Nikola got listed on Nasdaq after a reverse merger with VectoIQ on Jun 3. The company has had a volatile run on the bourses since its IPO. After witnessing meteoric gains amid optimism surrounding the company’s upcoming Badger truck and the general hype about electric vehicles, shares have been falling after the firm filed a prospectus outlining its intent to sell up to 23.9 million shares.

The company has been betting big on electric trucks. The upcoming Nikola Badger pickup truck will be available in BEV (battery-electric vehicle) with a range of up to 300 miles and FCET (fuel-cell electric vehicle) with 500-750 mile range. It should be noted that Nikola generated more than $10 billion in pre-order revenues. The company’s partnership with CNH Industrial CNHI is expected to have beneficial. Joining forces with CNH Industrial enabled Nikola to accelerate penetration into high-potential European markets and de-risk manufacturing execution.

While a lot has been working in favor of the company, soaring technology costs to develop such advanced vehicles are likely to have dented margins. Also, it is likely to have faced tough competition from other auto biggies.

Other Stocks to Consider

Nikola is not the only auto firm looking up this earnings season. Here are some other companies from the same space, which according to our model also have the right combination of elements to post an earnings beat in the to-be-reported quarter.

Carvana Co. CVNA has an Earnings ESP of +5.95% and carries a Zacks Rank #3 at present. The company is slated to release second-quarter 2020 earnings on Aug 5.

Adient plc ADNT has an Earnings ESP of +17.22% and carries a Zacks Rank #3 at present. The company is slated to release second-quarter 2020 earnings on Aug 6.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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