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Nikola (NKLA) to Report Q2 Earnings: What's in the Offing?

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Nikola Corporation’s (NKLA - Free Report) second-quarter 2021 results are scheduled to be out on Aug 3, before the opening bell. The Zacks Consensus Estimate for the quarter’s loss is pegged at 27 cents per share.

In the last reported quarter, Nikola incurred loss per share of 31 cents, narrower than the Zacks Consensus Estimate of a loss of 46 cents.

Nikola surpassed the Zacks Consensus Estimate in three of the last four quarters and missed in the other, the average surprise being 17.85%. This is depicted in the chart below:

Nikola Corporation Price and EPS Surprise

Nikola Corporation Price and EPS Surprise

Nikola Corporation price-eps-surprise | Nikola Corporation Quote

Trend in Estimate Revisions

The Zacks Consensus Estimate for Nikola’s second-quarter loss per share has narrowed by a penny in the past 60 days. However, this compares unfavorably with the year-ago quarter’s loss of 16 cents per share.

Earnings Whispers

Our proven model predicts an earnings beat for Nikola this time around. The 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.

Earnings ESP: Nikola has an Earnings ESP of +10.58%. This is because the Most Accurate Estimate of loss of 25 cents per share comes in two cents narrower than the estimate loss. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Nikola carries a Zacks Rank of 3, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors at Play

Fuel cell and battery electric truck start-up Nikola, which is currently in the pre-revenue stage, saw grueling times last year, especially when the short-selling firm Hindenburg Research published a report accusing the former of a series of fraud in showcasing its electric-vehicle technology. Following Hindenburg’s allegations, Nikola CEO and founder Trevor Milton resigned from the company, which further dampened investors’ faith in the firm.

In fact, once dubbed as the Tesla (TSLA - Free Report) of the trucking industry, Nikola was slated to enter into a deal with General Motors (GM - Free Report) , which would aid the former in engineering and manufacturing its Badger, a fully-electric and hydrogen fuel-cell electric pick-up truck. However, post the allegations by Hindenburg, General Motors pulled the plug on the deal with Nikola for the Badger truck. Instead, the two companies merely entered into a non-binding memorandum of understanding related to the integration of General Motor’s Hydrotec fuel-cell system into Nikola’s commercial semi-trucks.

Nonetheless, on an encouraging note, in April, Nikola collaborated with IVECO and OGE to enable cost-effective transportation of hydrogen from production to storage and fueling locations in Germany to cater to the industry needs. Nikola also teamed up with TravelCenters of America for the installation of hydrogen fueling stations for heavy-duty trucks at two existing TA-Petro sites in California. Further, in May, Nikola collaborated with Total Transportation Services to test its zero-emission commercial vehicles, which might result in the sale of 100-battery and hydrogen fuel cell-powered big rigs. These series of agreements are crucial for advancing the future of zero-emissions transportation and building a hydrogen economy. This is likely to have been beneficial for Nikola’s second-quarter margins.

Nikola also made considerable progress on the commissioning and validation of the first batch of Nikola Tre battery electric vehicles (BEVs) during the June-end quarter. Further, Nikola’s partnership with CNH Industrial (CNHI - Free Report) , aimed at accelerating penetration into high-potential European markets as well as the company’s progress made at the joint-venture manufacturing facility on IVECO’s campus in Germany, is likely to have provided some respite to the truck maker’s bottom line during the quarter under review.