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Wedbush remains sidelined on Nikola as CEO change overshadows positive 2Q

Published 2023-08-09, 11:52 a/m
Updated 2023-08-09, 11:52 a/m
© Reuters.

Wedbush reiterated a Neutral on Nikola (NASDAQ:NKLA) with a 12-month price target of $3.00 after the electric vehicle company’s earnings were overshadowed by another management change, the fourth in as many years.

Michael Lohscheller announced that he is resigning from his position as CEO, effective immediately, due to family health concerns.

The company has named Chairman, Steve Girsky to take over the position. However, Lohscheller has agreed to stay on as an advisor until the end of September, ensuring a smooth handover of responsibilities.

Apart from the transition, the automaker reported positive 2Q results, reducing cash burn and focusing on production.

Wedbush analysts wrote in a note, “Nikola put together a quarter that featured some progress but continues to lower its guidance on production while combating headwinds; the most important number in the eyes of the Street. Looking into cash burn, Nikola is beginning to turn the corner lowering its burn rate significantly with reduced headcount and a focus on North America, estimated to lower its total burn below $100.0 million per quarter by the end of this fiscal year.”

Nikola announced 2Q total revenues of $15.4M, surpassing the street’s estimated $15M. During this period, the company successfully delivered 45 wholesale and 66 retail trucks. Additionally, the sale of the European joint venture to Iveco was finalized, contributing $107.0M to NKLA's balance sheet.

For the upcoming quarter, the company has projected a truck delivery range of 60-90 units, which is anticipated to generate revenue between $18.0M and $28.0M, short of the street’s projected revenue of $34.8M.

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Over the course of the year, Nikola's revised delivery expectations to 300-400 trucks, yielding anticipated revenue of $100.0M to $130M, as opposed to the previous estimate of $140.0M to $200.0M. These figures are also below the market's estimate of $147.9M.

Shares of NKLA are down 12.28% in mid-day trading on Wednesday.

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