Now Wedbush analyst Dan Ives says the stock is worth almost half of what he previously thought as he lowered his price target on Nikola to $13 per share, 48% below his previous estimate of $25.
But that's still 18% above where the EV maker's stock closed on Friday.
In a research note to clients, Ives said he thinks it's possible Nikola can achieve the goals it's set for itself in the semi truck market for EVs and hydrogen fuels, but because of the company's dramatic reversal of fortunes, "Nikola is a story stock and 'prove me' name for now."
Nikola was alleged to have fraudulently inflated the capabilities of its battery and fuel cell technology, and is now under investigation by the Securities and Exchange Commission and Justice Department. General Motors (GM 0.72%), which was investing in the company's technology, subsequently backed out of the arrangement.
Ives says a lot of the increased valuation that Nikola's stock enjoyed prior to the scandal was built on hype surrounding its technology. Now, though, the market has removed that component since GM backed out and Nikola dropped plans for its Badger pickup, while also tempering its guidance.
Nikola stock is down almost 30% year to date, and the shares have lost 90% of their peak value from when they traded at $94 a share.