The Nio stock has recovered in recent days, even though other Chinese electric vehicle companies have fallen to their lowest level this year. The stock price rose 17% to $4.25, the highest level since August.
Nio is still a long way below its peak. Nio has fallen by more than 93% since its peak in January 2021. The market value has dropped from $85 billion down to $7.84.
Earnings of Chinese electric vehicle companies
In the last few months, many Chinese electric vehicles have released their financial reports. Li Auto’s stock fell by nearly 20% on August 27, after its results showed that the company was experiencing a slowdown in growth. Li Auto is widely regarded as being one of China’s best EV brands. As an example, Li’s stock jumped from $46.36 to $46.36 earlier in the year when most EVs fell.
Xpeng released a mixed set of results, showing that revenue increased by 60% from $1.12 Billion to $1.6 billion. Even though the growth in top line was positive, margins were lower than expected. Xpeng’s future is now pinned to Mona, a newly launched vehicle which has experienced robust sales.
BYD (the largest Chinese electric vehicle company) reported solid results, but cautioned that the outlook for its future was difficult.
These results show that companies continue to sell more cars, but at discounts. This is impacting their profit margins. There are also signs that BYD’s dominance is hurting small companies.
Earnings ahead: Nio?
On Thursday, Nio will release its quarterly financial results. The numbers provided will give a better idea of whether Nio is experiencing the same challenges as other companies.
Nio reported in June that it had delivered over 30,000 vehicles in the first three months of the year, which is a slight decrease from the 31,000 units in 2023.
Nio reported revenue of $1.16billion, down 9.1% from 2023’s same-quarter. Positively, Nio’s vehicle margin increased from 5.1% to 9.2%. It was still lower than its previous margin of 11.9%.
Nio is expected to report a revenue of $2.4 billion. This represents a 93% rise from the previous year’s same-period results. The company’s profit per share will also be 31 cents. This is down from 46 cents in the previous year. Nio has failed to meet analyst expectations for the past four quarters.
Nio’s explosive growth is due to the dramatic increase in vehicle deliveries over the last few months. The company delivered 15,620 cars in April, followed by 20,544 vehicles in May and then 21,000 vehicles in June. This brings the quarterly total to 57.373, an increase of 150% year-over-year.
Nio concerns remain
Investors are most concerned about its margins, and the company’s future guidance. Most companies are forced to cut prices due to the increasing competition. Nio has done this in 2023, and there is a rumour that they are offering significant discounts in China.
Nio is hoping that the Onvo brand can help it to maintain its growth trajectory. Onvo, the company’s cheaper SUV is now available for around $30,000. The company announced plans to open up 100 stores in the United States.
In the coming years, it hopes to turn a profit with its ONVO and eponymous brands.
Analysts predict that the company’s revenue in 2025 will reach $13.6 billion, followed by $9.7 billion. Analysts expect its earnings per share to increase from $1.53 to $1.2 in this year, and to 89 cents by 2026.
Nio stock price analysis
It is difficult to predict a stock’s earnings before it happens. The stock reached a high of $9.55 on the daily chart in December, and it has since fallen to $4.15. The stock has also been below the Fibonacci Retracement of 23.6% at $6.56.
The stock found strong support around $3.64. It was unable to go below this price earlier in the year. The price of $3.64 was at the bottom end of the triangle pattern. The price has moved down below both the 100-day and 50-day moving averges.
Stock has moved just above upper trendline. While a lot of things can still happen, I think that after the results released on Thursday, there will be a likely bearish breakout.
The next important level will be $3.64, which is the lowest point of this year. If the price breaks below $3.64, it will indicate more upside.
Nio is likely to bounce back in the future if it continues its upward trajectory.
The post Nio Stock Price Forecast: Buy or Sell ahead of Earnings? This post may be updated as new information unfolds
This site is for entertainment only. Click here to read more
