Why Nikola Stock Is Up Over 25% Today

Nicholas (NKLA 16.67%) Shares hit 52-week lows on September 26 and are down 82% year-to-date by yesterday’s market close. Shares of the electric vehicle (EV) maker soared today and were up more than 25% by midday Wednesday after the company reported register sales for the third quarter. The emphasis on “recording” is important here, as you will soon understand.

Nikola is finally selling more trucks

Nikola delivered 88 class 8 hydrogen fuel cell heavy trucks to its dealers in Q3. It was the company’s highest ever third-quarter sales. Deliveries also rose sequentially from 72 fuel cell trucks in the second quarter.

Deliveries, however, were within Nikola’s Q3 guidance range of 80 to 100 fuel cell trucks. That might make one wonder why the stock was still up double-digit percentages on Wednesday. The point is that Nikola has consistently missed its financial targets, so investors are likely seeing a bump in the company’s latest sales numbers that have hit management’s targets.

Is this the bottom for Nikola stock and time to buy?

Nikola started shipping hydrogen fuel cell trucks in the fourth quarter of 2023 after shifting its focus from battery electric vehicles, so it’s too early to celebrate “record” sales. Simply put, if you’re an investor or looking to invest in Nikola stock, you’ll want to look beyond today’s headlines.

Certainly, higher sales should increase Nikola’s revenue and help him cut losses. Nikola generated revenue of about $31 million in Q2 but reported a gross loss of nearly $55 million, although losses have narrowed sequentially. Nikola has potential as it is the only company selling Class 8 fuel cell electric vehicles commercially in North America.

However, the company has only delivered 235 trucks so far, is burning cash fast and is issuing stock to raise funds. These are just a few of the factors you’ll want to keep in mind before plunging into Nikola shares.