Written by Cláudio Afonso | LinkedIn | X
Baird analyst Ben Kallo cut on Friday the firm’s price target on Nikola shares by 28.6%, to $10 from $14, while maintaining an Outperform rating. The EV maker reported its third-quarter earnings results on Thursday, posting a lower than expected total revenue caused by a repurchase of 20 battery electric trucks valued at $7.7 million.
In a new research note, the analyst noted that the company is building commercial momentum with positive feedback from early customers, as it targets deals with major national accounts.
Kallo participated in the company’s earnings conference call on Thursday, questioning the CEO and the CFO on the buying patterns of existing customers.
The analyst asked about potential growth trends in orders, querying whether customers would shift from pilot phases to larger-scale purchases or adopt a “wait-and-see” stance on infrastructure.
Nikola CEO Steve Girsky noted that the company has “repeat customers,” some of which he described as “fairly large.” Girsky added that establishing more consistent routes between Northern and Southern California could drive greater demand, as Northern California remains a relatively untapped market for Nikola trucks.
“Our static is that they want to buy more, but we really want to seed lots of different fleets so we can accumulate data on what’s the best use case of a fuel cell [FCEV] versus a BEV [battery electric vehicle],” he said.
Nikola CFO Tom Okray explained that new customer acquisition typically starts with a pilot phase, the duration of which varies by client.
Okray noted the inherent “natural tension” within national accounts, balancing sustainability goals with strict cost controls. He noted that within customer organizations, the sustainability team is often keen to adopt new technology, while the logistics team remains highly cost-conscious.
“And then I think it’s also important to note, there is a natural tension within any sort of national account company. You’ve got the sustainability arm which is really looking at putting this into their fleet. You’ve got the logistics arm which is pennies per mile in terms of cost. And then you’ve got the senior leadership that is trying to put this all together in [the] way the sustainability commitment with the cost commitment with the new technology,” he added.
“So, it’s not a layup so to speak, it’s not a half-court shot either, but it’s something that we’re getting better at working at, building the connections within those companies, and it’s building the relationships, letting them demo the truck, demystifying the hydrogen. Making sure that we can commit to them that the fueling is going to be up and reliable. So, it’s a process, but it’s a great prize at the end because these companies that care about the environment and care about the hydrogen economy get to actually utilize one of our vehicles to execute that,” he added.
During the conference call, Nikola‘s CFO Tom Okray said the company has a cash runway of “five to six months,” considering a monthly burn rate of $30 million to $40 million.
Okray added that the company is “working right now to try to raise the necessary capital to give us the runway to go much further into 2025.”
Nikola shares fell 7% on Thursday and closed at $3.93.
Written by Cláudio Afonso | LinkedIn | X
