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Nikola (NKLA) to Report Q4 Earnings: Here's What to Expect

Zacks Equity Research
·4-min read

Nikola Corporation NKLA is slated to release fourth-quarter 2022 results on Feb 23, before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s loss per share and revenues is pegged at 46 cents and $34.12 million, respectively.

For the fourth quarter, the consensus estimate for NKLA’s loss per share has been unchanged in the past 60 days. Its bottom-line estimates imply a decline of 100% from the year-ago reported number. Over the trailing four quarters, NKLA surpassed the consensus estimate on all occasions, the average surprise being 19.63%. This is depicted in the graph below:

Nikola Corporation Price and EPS Surprise

 

Nikola Corporation Price and EPS Surprise
Nikola Corporation Price and EPS Surprise

Nikola Corporation price-eps-surprise | Nikola Corporation Quote

Q3 Highlights

In third-quarter 2022, Nikola incurred an adjusted quarterly loss of 28 cents per share, narrower than the Zacks Consensus Estimate of a loss of 39 cents. This compares to an adjusted loss of 22 cents per share reported a year ago. Nikola posted revenues of $24 million in the quarter, surpassing the Zacks Consensus Estimate of $23 million.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Nikola for the fourth quarter, as it does not have the right combination of the two key ingredients. A positive Earnings ESP combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: NKLA has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate is in line with the Zacks Consensus Estimate.

Zacks Rank: It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Things to Note

Nikola has failed to achieve economies of scale as the company has been in its early stage. Nikola produced 75 Tre battery electric vehicle truck in the third quarter. It has been suffering losses on Tre BEV truck due to absurdly high production costs.

The firm has been struggling to increase customer uptake rate, which requires it to expand its level charging station fleet, which necessitates cumbersome regulatory processes and assistance from local authorities.

While its fourth-quarter production target of 120-170 trucks implies an increase from the prior quarter, which is expected to have provided a boost to revenues, commodity cost inflation is anticipated to have dented the gross margin.

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Moreover, the company stated at its last reported quarter's earnings call that the acquisition of Romeo Power would tarnish its margin in the fourth quarter compared with the preceding quarter. It expected the gross margin to hit a negative 240%-280% mark in the to-be-reported quarter. Nikola’s fourth-quarter margins are also likely to have been dampened by soaring R&D expenses. The company expects R&D costs of $82.5-$87.5 million in the fourth quarter, higher than $66.6 million reported in third-quarter of 2022.

Stocks With Favorable Combination

Let’s take a look at some players from the auto space that, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:

Vroom VRM will release fourth-quarter 2022 results on Feb 28. The company has an Earnings ESP of +41.67% and a Zacks Rank #3.

The Zacks Consensus Estimate for Vroom’s to-be-reported quarter’s loss and revenues is pegged at 60 cents per share and $256.73 million, respectively. VRM surpassed earnings estimates in two of the trailing four quarters and missed in the rest, with an average surprise of 1.43%.

CarGurus CARG will release fourth-quarter 2022 results on Feb 28. The company has an Earnings ESP of +58.49% and a Zacks Rank #3.

The Zacks Consensus Estimate for CarGurus’ to-be-reported quarter’s earnings and revenues is pegged at 9 cents per share and $279.28 million, respectively. CARG surpassed earnings estimates in three of the trailing four quarters and missed on the other, with an average surprise of 10.56%.

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

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CarGurus, Inc. (CARG) : Free Stock Analysis Report

Nikola Corporation (NKLA) : Free Stock Analysis Report

Vroom, Inc. (VRM) : Free Stock Analysis Report

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Zacks Investment Research