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Nikola Share-Price Target Cut as Wedbush Sees 'Prove Me' Stock

Nikola's overall goals are still attainable, but 'Nikola is a story stock and a "prove me" name for now,' Wedbush says. The EV maker's shares fell.
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Nikola  (NKLA) - Get Nikola Corporation Report shares slipped on Monday after Wedbush analyst Dan Ives nearly halved his share-price target for the electric-truck maker to $13 from $25, affirming a rating.

“Overall we still believe the company's electric vehicle and hydrogen fuel cell ambitions are attainable in the semi-truck market,” he wrote in a commentary.

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“Nikola is a story stock and a ‘prove me’ name for now. We also believe much of the Street hype around the Nikola story has been taken out with the slimmed down [General Motors  (GM) - Get General Motors Company Report] partnership (no ownership stake), sunsetting the Badger product line, and toning down general expectations over the next 12 to 18 months.”

Further, “Nikola is a prerevenue company with lofty ambitions and a solid product [roadmap. Now,] it’s about building back [Wall Street] credibility one step at a time brick by brick,” Ives said.

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So despite Nikola’s potential, “we still have clear concerns that the execution and timing of these ambitious goals stay on track over the coming years,” Ives said..

Nikola shares recently traded at $10.85, down 1.2%.

The stock has dropped 44% over the past six months. That drop came after Hindenburg Research in September published a report arguing that the company and Founder Trevor Milton misled investors.

Milton resigned as chairman shortly afterward. In February, Nikola said that Milton made some inaccurate statements but that Hindenburg did as well.

Earlier this month, Nikola disclosed that Milton sold $48.6 million of its stock. He sold 3.5 million shares for $13.89 apiece, the company said in a Securities and Exchange Commission filing.