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Key Developments Influencing Nikola's (NKLA) Q4 Earnings

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Nikola Corporation’s (NKLA - Free Report)  fourth-quarter 2021 results are scheduled to be out on Feb 24, before the opening bell. The Zacks Consensus Estimate for the quarter’s loss is pegged at 29 cents per share. The consensus mark for Nikola’s fourth-quarter loss per share has remained stable over the past 90 days. The projection calls for a deterioration from the year-ago loss of 17 cents a share.

In the last reported quarter, Nikola incurred a loss per share of 22 cents, narrower than the Zacks Consensus Estimate of a loss of 26 cents. Over the preceding four quarters, Nikola surpassed the Zacks Consensus Estimate on all occasions, with the average being 29%. 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

Factors at Play

NKLA hit a major milestone in December with the delivery of its first Nikola Tre battery-electric vehicle (BEV) pilot trucks to Total Transportation Services Inc. It also received an initial order for 10 Tre BEV trucks from Heniff Transportation Services. Per the deal, the companies agreed to pursue the placement of an additional 90 trucks into Heniff’s fleet once the initial deployment of 10 units is completed successfully. These developments are likely to aid Nikola’s fourth-quarter results.

Having said that, Nikola is not generating meaningful revenues yet and is still months away from the production of electric trucks for commercial sales. Given that the company is still in the nascent stage and its fate depends on how its pilot trucks are received by customers, NKLA has been burning cash, which might have affected its fourth-quarter bottom line.

Elevated spending in a bid to develop and test state-of-the-art technologies and add new sales and service locations might have put the firm’s fourth-quarter margins under pressure. In the last reported quarter, Nikola spent $79 million in R&D activities, reflecting a yearly uptick of 55%. SG&A expenses flared up 192% year over year to $193 million for the third quarter of 2021. The trend is expected to have continued in the to-be-reported quarter.

In another key development during the quarter-to-be-reported, Nikola agreed to pay the SEC a $125-million penalty, which freed the company of further investigations. The penalty has to be made in five installments over the next two years. The first installment was scheduled at 2021-end, which would have further clipped profits. Nonetheless, the settlement ended a controversy, concluding all government investigations of Nikola.

Earnings Whispers

Our proven model does not conclusively predict 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, which is not the case here.

Earnings ESP: Nikola has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate is on par with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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

How are Peers Shaping Up Prior to Their Earnings Release?

Hyliion Holdings (HYLN - Free Report) : Our proven model does not conclusively predict an earnings beat for Hyliion this time around. The EV upstart has an Earnings ESP of 0.00% and a Zacks Rank #3. The company is set to report fourth-quarter 2021 earnings on Feb 24.

The Zacks Consensus Estimate for Hyliion’s to-be-reported quarter’s loss is pegged at 27 cents per share. HYLN surpassed earnings estimates in the last four quarters, with an average of 38.7%.

Lucid Group (LCID - Free Report) : Our proprietary model does not conclusively predict an earnings beat for Lucid this time around. Lucid, which went public in July 2021, has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). The company is set to report fourth-quarter 2021 earnings on Feb 28.

The Zacks Consensus Estimate for Lucid’s to-be-reported quarter’s loss is pegged at 26 cents per share. In the last reported quarter, LCID incurred a loss of 41 cents, wider than the Zacks Consensus Estimate of a loss of 22 cents.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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