From $10 a share in April to nearly $80 a share in June, and back to $18 a share by Tuesday’s closing trade, would-be electric truck-maker Nikola Corporation (NKLA) seems intent on pulling a 360 and taking its stock all the way back to where it began.But one analyst isn’t willing to come along for the ride.Wedbush analyst Daniel Ives took a look under the hood at Nikola’s Q3 2020 earnings report, which was released Monday. Unfortunately for investors who’ve hitched their wagon to this stock, he didn’t like what he saw — and so Ives reiterated his “underperform” rating on the stock, and his $15 price target on Nikola shares. (To watch Ives’ track record, click here)What didn’t he like, specifically? Ives starts out charitably enough, tactfully referring to Nikola as a “pre-revenue company.” (Which is a nice way of saying they haven’t sold anything yet, and may not even have a product to sell). Such lack of a product might ordinarily be reason enough for investors to reject Nikola stock out of hand, and move on in search of brighter prospects. But Nikola has an ace up its sleeve in the form of General Motors, which in September announced that it is investing $2 billion in Nikola, taking an 11% ownership stake in the company, and agreeing to help Nikola build its ballyhooed “Badger” hydrogen fuel cell-powered pickup truck, aiming to bring it to market in late 2022.So long as GM expresses faith in Nikola, investors can take at least some comfort in the fact that while they might be mistaken in investing in the company, GM and its team of due diligence lawyers will not. If GM likes Nikola, so the theory goes, then there must certainly be a “there” there.But is there? Really?Ives agrees that the GM partnership is the “linchpin” in the Nikola buy thesis at this point. However, he also points out that this deal won’t be officially signed before early December. Given the importance of the relationship, it would have been nice to get some confirmation that Nikola is making progress finalizing the deal. But in fact, says Ives, “that did not happen.” When you consider that Nikola’s stock price has fallen by nearly half since this partnership was announced, at the very least, there would appear to be a risk that GM will want to renegotiate the amount of money it is investing, the number of shares it will receive — or both.Moreover, Ives expressed doubts about both the timeline and the execution of Nikola’s plans to (a) build an “Arizona flagship factory” to produce hydrogen fuel cell semi-trucks, and (b) complete a set of five “prototype trucks in Germany.” In theory at least, all five of the prototype trucks are supposed to be finished by the end of this year (says Nikola). But in the absence of founder Trevor Milton — and despite his replacement by Mark Russell as CEO and GM exec Stephen Girsky as Chairman — Ives worries that “execution risks for Nikola are significantly heightened.”With no profits, and even no revenues upon which to hang a valuation for the stock, Ives is forced to conclude that “NKLA is a prove me story,” and a risky investment for individual investors.Is the rest of the Street in agreement? As it turns out, the analyst consensus is more of a mixed bag. 2 Buy ratings, 2 Holds and 1 Sell were assigned in the last three months, giving NKLA a Hold status. However, with a $38.50 average price target, there’s nearly 95% upside from current levels. (See NKLA stock analysis)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.,
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