Nikola Corp Profitability Analysis

NKLA Stock  USD 0.36  0.03  9.09%   
Considering Nikola Corp's profitability and operating efficiency indicators, Nikola Corp may not be well positioned to generate adequate gross income at this time. It has a very high probability of underperforming in July. Profitability indicators assess Nikola Corp's ability to earn profits and add value for shareholders.
 
Net Loss  
First Reported
2018-06-30
Previous Quarter
-153.6 M
Current Value
-147.6 M
Quarterly Volatility
103.5 M
 
Covid
At present, Nikola Corp's Days Sales Outstanding is projected to decrease significantly based on the last few years of reporting. The current year's Days Of Sales Outstanding is expected to grow to 368.27, whereas Price To Sales Ratio is forecasted to decline to 18.55. At present, Nikola Corp's Income Tax Expense is projected to increase significantly based on the last few years of reporting. The current year's Change To Netincome is expected to grow to about 379.4 M, whereas Accumulated Other Comprehensive Income is projected to grow to (153.9 K).
For Nikola Corp profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Nikola Corp to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Nikola Corp utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Nikola Corp's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Nikola Corp over time as well as its relative position and ranking within its peers.
  
Check out Correlation Analysis.
For information on how to trade Nikola Stock refer to our How to Trade Nikola Stock guide.
Is Construction Machinery & Heavy Transportation Equipment space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Nikola Corp. If investors know Nikola will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Nikola Corp listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Earnings Share
(1.06)
Revenue Per Share
0.033
Quarterly Revenue Growth
(0.30)
Return On Assets
(0.35)
Return On Equity
(1.53)
The market value of Nikola Corp is measured differently than its book value, which is the value of Nikola that is recorded on the company's balance sheet. Investors also form their own opinion of Nikola Corp's value that differs from its market value or its book value, called intrinsic value, which is Nikola Corp's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Nikola Corp's market value can be influenced by many factors that don't directly affect Nikola Corp's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Nikola Corp's value and its price as these two are different measures arrived at by different means. Investors typically determine if Nikola Corp is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Nikola Corp's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Nikola Corp Return On Asset vs. Return On Equity Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Nikola Corp's current stock value. Our valuation model uses many indicators to compare Nikola Corp value to that of its competitors to determine the firm's financial worth.
Nikola Corp is considered to be number one stock in return on equity category among its peers. It also is considered to be number one stock in return on asset category among its peers . At present, Nikola Corp's Return On Equity is projected to slightly decrease based on the last few years of reporting. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Nikola Corp's earnings, one of the primary drivers of an investment's value.

Nikola Return On Asset vs. Return On Equity

Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.

Nikola Corp

Return On Equity

 = 

Net Income

Total Equity

 = 
-1.53
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Return on Asset or ROA shows how effective is the management of the company in generating income from utilizing all of the assets at their disposal. It is a useful ratio to evaluate the performance of different departments of a company as well as to understand management performance over time.

Nikola Corp

Return On Asset

 = 

Net Income

Total Assets

 = 
-0.35
Return on Asset measures overall efficiency of a company in generating profits from its total assets. It is expressed as the percentage of profits earned per dollar of Asset. A low ROA typically means that a company is asset-intensive and therefore will needs more money to continue generating revenue in the future.

Nikola Return On Asset Comparison

Nikola Corp is currently under evaluation in return on asset category among its peers.

Nikola Corp Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Nikola Corp, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Nikola Corp will eventually generate negative long term returns. The profitability progress is the general direction of Nikola Corp's change in net profit over the period of time. It can combine multiple indicators of Nikola Corp, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income-162 K-153.9 K
Net Loss-705.8 M-670.5 M
Income Tax Expense12 K12.6 K
Net Interest Income-78.2 M-74.3 M
Interest Income181.8 K172.7 K
Operating Income-642.5 M-674.6 M
Net Loss-933.1 M-886.4 M
Income Before Tax-848.2 M-805.8 M
Total Other Income Expense Net-205.7 M-195.4 M
Net Loss-864.6 M-821.4 M
Non Operating Income Net Other-16 M-15.2 M
Change To Netincome361.3 M379.4 M
Net Loss(1.21)(1.27)
Income Quality 0.58  0.72 
Net Income Per E B T 1.14  0.82 

Nikola Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Nikola Corp. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Nikola Corp position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Nikola Corp's important profitability drivers and their relationship over time.

Nikola Corp Profitability Trends

Nikola Corp profitability trend refers to the progression of profit or loss within a business. An upward trend means that Nikola Corp's profit has generally increased over time, and a downward profitability trend means profits are declining. Recognizing problems early in profitability trends allows investors to address revenue and cost issues in advance. Investors and analysts usually monitor three types of profitability trends: gross, operating, and net. Gross profit is the difference between revenue and costs of goods sold. Operating profit is Nikola Corp's gross profit minus its overhead. After you account for other unusual revenue, expenses, and costs, you get net profit. Gross profit trends are often a good indicator of future profitability. If you have high gross profit margins, you have a better chance to cover overhead and make money.

Nikola Corp Profitability Drivers Correlations

One of the toughest challenges investors face today is learning how to quickly synthesize and read into endless financial statements and information provided by the company, SEC reporting, and various external parties. Understanding the correlation between Nikola Corp different financial indicators related to revenue and profit generation helps investors identify and prioritize their investing strategies towards Nikola Corp in a much-optimized way. Analyzing correlations between profit drivers that are directly associated with dollar figures is the most effective way to break down Nikola Corp's future profitability.

Use Nikola Corp in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Nikola Corp position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nikola Corp will appreciate offsetting losses from the drop in the long position's value.

Nikola Corp Pair Trading

Nikola Corp Pair Trading Analysis

The ability to find closely correlated positions to Nikola Corp could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Nikola Corp when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Nikola Corp - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Nikola Corp to buy it.
The correlation of Nikola Corp is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Nikola Corp moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Nikola Corp moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Nikola Corp can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Nikola Corp position

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Consumer Funds
Consumer Funds Theme
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Additional Information and Resources on Investing in Nikola Stock

When determining whether Nikola Corp offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Nikola Corp's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Nikola Corp Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Nikola Corp Stock:
Check out Correlation Analysis.
For information on how to trade Nikola Stock refer to our How to Trade Nikola Stock guide.
You can also try the Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
To fully project Nikola Corp's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Nikola Corp at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Nikola Corp's income statement, its balance sheet, and the statement of cash flows.
Potential Nikola Corp investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Nikola Corp investors may work on each financial statement separately, they are all related. The changes in Nikola Corp's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Nikola Corp's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.