Forward Guidance Sets Ambitious but Realistic Tone for NIO

: NIO | NIO Inc. ADR News, Ratings, and Charts

NIO – After a powerful rally in 2020, NIO stock needed to cool down for a while. But now, a setup for another leg up could be in the works.

Just about anyone who held shares of Chinese electric vehicle start-up NIO (NYSE:NIO) in 2020 did well. That year, despite the global Covid-19 pandemic, NIO stock gained more than 1,100%.

That stunning rally persisted into early 2021, but no bull run is meant to last forever. February was a challenging month for Nio’s shareholders, while March and April were marked by frustratingly choppy price action.

So, what are traders supposed to do with NIO stock now? The share price is all over the map, making analysis difficult.

Perhaps we can make some sense of the madness today. Along the way, we’ll check on some fresh fiscal data that ought to give rudderless Nio investors a better sense of direction.

A Closer Look at NIO Stock

It feels like a million years ago, but as recently as April of 2020, NIO stock was trading at under $3. That was a terrific buy price for the stock, but at the time it seemed as if the world was imploding.

Moreover, the company wasn’t posting great vehicle delivery numbers at that time. Suffice it to say that the situation has improved dramatically from then to now.

The multi-month rally in NIO stock has been mind-blowing. By Feb. 9 of this year, the share price reached a 52-week high of $66.99.

It was practically inevitable that such a strong rally would eventually run out of steam. Thus, the stock reversed course and ended April 2021 at $39.84.

At the same time, the company’s trailing 12-month earnings per share was -$1.03.

Hopefully, the company can go earnings-positive on a per-share basis in the near future – and some recently reported data offers hope that this may be possible.

Losing Money, but That’s Okay

There’s no denying it. During the first quarter of 2021, Nio lost money.

That sounds like a problem, but it’s fairly commonplace among electric vehicle start-ups nowadays. If you’re going to invest in this sector, you’ll probably have to accept that these companies are often working towards profitability.

So, let’s get specific. In 2021’s first quarter, NIO lost 4.88 million RMB. That translates to $744.1 million, or 48 cents per American Depositary Receipt (ADR).

However, when we adjust for stock-compensation expenses and other one-time items, we can say that Nio really only lost 4 cents per ADR.

That’s really not too bad, compared to the loss of around 10 cents per ADR that analysts polled by FactSet were expecting.

Okay, maybe that didn’t make you feel any better. So, I’ll offer you this: NIO’s first-quarter 2021 vehicle sales totaled 7.98 billion RMB, or $1.22 billion.

That’s a year-over-year improvement of 481%. Plus, NIO’s Vehicle margin was 21.2% for the quarter, indicating that the automaker is selling cars at a price that’s favorable to the company.

It Gets Even Better

Those figures are quite impressive, and that’s not even the end of the story.

Maybe you can recall when, in March of 2020, NIO was having major difficulty selling its vehicles. Thankfully, the picture is looking much brighter today.

During the first quarter of this year, NIO delivered 20,060 vehicles. That number represents an increase of 423% compared to the first quarter of 2020.

Furthermore, it signifies a 16% increase on a sequential quarter-over-quarter basis.

Can NIO possibly keep up this pace? The answer would be yes, judging by the company’s forward guidance.

The automaker is expecting between 21,000 and 22,000 vehicles to be delivered during the second quarter. With that, NIO is modeling quarterly sales between $1.24 billion and $1.29 billion.

And, that’s factoring in the well-documented global semiconductor shortage, which NIO Chief Executive William Li acknowledged in a statement.

The Bottom Line

NIO’s forward guidance for vehicle deliveries is ambitious, no doubt about it.

Yet, it’s also realistic as the company’s on a powerful growth trajectory.

The company has come a very long way in a year’s time. Going forward, NIO stockholders should expect solid returns as this exciting electric vehicle maker forges a path to profitability.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.


NIO shares were trading at $41.04 per share on Monday morning, up $1.20 (+3.01%). Year-to-date, NIO has declined -15.80%, versus a 12.53% rise in the benchmark S&P 500 index during the same period.


About the Author: David Moadel


David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets. More...


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