What happened
Next-generation truck maker Nikola (NKLA 0.76%), still reeling from a tough session on the stock market Friday, saw its shares tumble even harder on Monday. The stock absorbed a 13% hit following a fresh price target cut from an analyst.
So what
That analyst is Chris McNally from Evercore ISI. Early Monday morning, McNally reduced his Nikola price target to $10 per share from the previous $14. Despite that move, the prognosticator is maintaining his in line (i.e., hold) recommendation on the stock.
The reasoning behind McNally's move wasn't immediately clear, but he's not the only professional stock researcher who is skeptical of Nikola's prospects.
According to data compiled by Yahoo! Finance, the analysts covering the company are expecting a deeper net loss for this year ($1.19 per share, against 2021's $0.79 deficit) before a slight recovery to a shortfall of $1.01 in 2023.
Now what
Very few investors are interested in the more speculative growth stocks now, and Nikola certainly qualifies. The company has only recently begun earning revenue from its operations, and as a still early-stage manufacturer its costs are high.
Nevertheless, there are several reasons to stay cheerful about Nikola's prospects.
Only last week, for example, New York state approved the company's Tre battery electric vehicle for inclusion in its truck voucher program. As this provides for up to $185,000 for the purchase of a truck as long as certain conditions are met, it could give the company's sales a significant boost. Happily, Nikola was approved recently for a similar initiative in another sprawling, populous state -- California.
