Nissan's financial health is a significant concern. The company reported a FY net loss of ¥670.9 billion, with revenue declining by 0.5% year-over-year. Negative free cash flow of ¥242.8 billion and an operating loss of ¥215.9 billion in the automotive business highlight the severity of the financial strain. Internal forecasts suggest cash reserves could dwindle to near zero by March 2026 if current conditions persist, necessitating a $7 billion loan partially backed by the UK government and asset sales to manage upcoming loan repayments. Moody's has downgraded Nissan's credit rating to junk, citing weak profitability and cash flow challenges.

Nissan's business model faces substantial risks. The company's global sales have been impacted by intensified sales competition, and declining sales in China, a key market, further exacerbate these issues. The termination of merger talks with Honda and Mitsubishi signals a lack of confidence in Nissan's turnaround efforts. The need to cut production of its top-selling Rogue SUV in response to potential tariffs indicates vulnerability to trade policy changes. The company's aging model portfolio and challenges in adapting to the shift towards electric vehicles pose additional threats to its long-term viability.

While some valuation metrics like Price/Sales and Price/Book appear attractive, they may be misleading given the company's financial struggles. The EV/EBIT and EV/EBITDA ratios are high, indicating potential overvaluation relative to earnings. The Quant Valuation grade has fluctuated between A and C, reflecting uncertainty in the company's financial outlook. The need to sell assets to raise capital further underscores the valuation concerns.

Nissan faces intense competition in the automotive market, particularly in the electric vehicle segment. The company's struggles to keep pace with EV innovation and its declining market share in key regions like China highlight its vulnerability to competitive pressures. The emergence of new competitors like Slate Auto, focusing on affordable electric trucks, further intensifies the competitive landscape.

The upcoming change in CEO, with Makoto Uchida stepping down, introduces uncertainty in leadership and strategic direction. The failed merger talks with Honda, reportedly due to Honda's dissatisfaction with Nissan's turnaround efforts, raise concerns about management's ability to effectively address the company's challenges. The potential for further management shakeups and the lack of a clear, convincing restructuring plan add to the governance risks.

Nissan faces regulatory risks related to potential tariffs on imported cars and auto parts, particularly in the U.S. market. The company's decision to halt U.S. orders for Mexican-built Infiniti SUVs due to tariffs demonstrates its vulnerability to trade policy changes. The need to shift production of the Rogue SUV to the U.S. to mitigate tariff impacts further underscores these regulatory risks.

Market sentiment towards Nissan is mixed, with analysts expressing skepticism about the company's ability to execute its turnaround initiatives. The stock has seen a significant decline year-to-date, reflecting investor concerns about its financial performance and competitive position. The termination of merger talks with Honda and the subsequent search for new strategic alliances indicate a lack of confidence in Nissan's standalone prospects.

The Quant Rating history shows a consistent 'HOLD' rating with a fluctuating Quant Score, reflecting the uncertainty surrounding the stock. The stock price has generally trended downwards, indicating bearish momentum. The lack of strong bullish signals in the technical analysis further supports a cautious outlook.

Nissan's liquidity and debt levels present significant risks. The company's deteriorating financial position and internal forecasts showing a risk of cash reserves dwindling to near zero by March 2026 raise concerns about its ability to meet its financial obligations. The need to raise $7 billion in loans and sell assets highlights the severity of the liquidity crisis. Moody's downgrade to junk status further underscores the company's debt concerns.