Critical Contrast: Lotus Technology (NASDAQ:LOT) vs. Nikola (NASDAQ:NKLA)

Lotus Technology (NASDAQ:LOT) and Nikola (NASDAQ:NKLA) are both small-cap auto/tires/trucks companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Valuation and Earnings

This table compares Lotus Technology and Nikola’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lotus Technology	$679.01 million	0.46	-$742.00 million	($0.48)	-22.71
Nikola	$35.84 million	19.47	-$966.28 million	($1.06)	-0.49

Lotus Technology has higher revenue and earnings than Nikola. Lotus Technology is trading at a lower price-to-earnings ratio than Nikola, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Lotus Technology and Nikola’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lotus Technology	N/A	-0.62%	-39.40%
Nikola	N/A	-113.18%	-58.40%

Volatility & Risk

Lotus Technology has a beta of -0.09, indicating that its share price is 109% less volatile than the S&P 500. Comparatively, Nikola has a beta of 2.1, indicating that its share price is 110% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Lotus Technology and Nikola, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lotus Technology	0	1	0	0	2.00
Nikola	0	2	2	0	2.50

Lotus Technology presently has a consensus price target of $7.00, indicating a potential downside of 35.78%. Nikola has a consensus price target of $1.33, indicating a potential upside of 159.20%. Given Nikola’s stronger consensus rating and higher possible upside, analysts clearly believe Nikola is more favorable than Lotus Technology.

Insider & Institutional Ownership

63.4% of Lotus Technology shares are owned by institutional investors. Comparatively, 37.4% of Nikola shares are owned by institutional investors. 0.2% of Lotus Technology shares are owned by company insiders. Comparatively, 0.7% of Nikola shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Nikola beats Lotus Technology on 7 of the 13 factors compared between the two stocks.

About Lotus Technology

Lotus Technology Inc. engages in the design, development, and sale of battery electric lifestyle vehicles worldwide. It also distributes sports cars. The company sells its products under the Lotus brand. Lotus Technology Inc. is based in Shanghai, China.

About Nikola

Nikola Corporation operates as a technology innovator and integrator that develops energy and transportation solutions in the United States and internationally. The company operates in truck and energy units. It commercializes battery electric vehicles (BEV) and hydrogen fuel cell electric vehicles (FCEV) to the trucking sector. In addition, it develops a network of hydrogen fueling stations; and offers BEV charging solutions for its FCEV and BEV customers, as well as other third-party customers. Further, its products include Nikola Tre Class 8 truck and the Nikola's Class 8 FCEV. Additionally, the company assembles, integrates, and commissions its vehicles in collaboration with its business partners and suppliers. Nikola Corporation founded in 2015 and is headquartered in Phoenix, Arizona.