What happened

The stock of Nikola (NKLA -0.34%) has had a good start to 2021. Shares were up another 8% as of 3:15 p.m. EST on Wednesday, bringing year-to-date gains to more than 60%. 

NKLA Chart

NKLA data by YCharts.

So what

The recovery stemmed from overall momentum in renewable energy names, particularly electric and alternative-fuel transportation companies that seem to have strong support from the Biden administration. 

One Wedbush Securities analyst upgraded the stock earlier this week, indicating much of the negative sentiment has been exhausted, so the company (and the stock) could rebound from here. 

Nikola truck at hydrogen fueling station

A Nikola truck at a hydrogen refueling station. Image source: Nikola.

Now what

Wedbush analyst Dan Ives upgraded the stock from a sell recommendation, raising the firm's price target from $15 to $25 per share, according to a Barron's report. Ives wrote, "The company's EV and hydrogen fuel cell ambitions are attainable in the semi-truck market," and stressed there will likely be many green initiatives around EVs and hydrogen fueling from the current administration.

Nikola announced an agreement last month that will boost its hydrogen fueling plans through an "innovative electric rate schedule" to help produce low-cost hydrogen

Even with the shares down significantly from last year's highs, the company carries a $9 billion market capitalization. That's down from nearly $30 billion, but it means there is still successful execution priced in. As with any stock, the underlying business will determine if the valuation is justified.