NIO Stock: Zooming or Dooming? ⚡

Nio's Momentum: Can They Keep the Surge Going Ahead of Earnings Report?

31 May • Estimated Reading Time: 5 minutes

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Nio (NYSE: NIO) is making headlines with a notable 10.34% surge to HK$42.15 in Hong Kong, driven by anticipation of May delivery data. But what’s behind this surge, and should you consider investing in Nio?

Key Highlights

  • April Deliveries: Nio delivered 15,620 vehicles in April, a 31.64% increase from March and a 134.60% year-over-year rise.     

  • May Registrations: From May 1-26, Nio recorded 15,400 insurance registrations, nearly matching April’s full-month deliveries.     

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Ring 一 Acquired by Amazon for $1.2B

Nest 一 Acquired by Google for $3.2B

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RYSE is a tech firm poised to dominate the Smart Shades market (growing at an astonishing 55% annually), and their public offering of shares priced at just $1.50 has opened. 

They have generated over 20X growth in share price for early shareholders, with significant upside remaining as they just launched in over 100 Best Buy stores.

Retail distribution was the main driver behind the acquisitions of both Ring and Nest, and their exclusive deal with Best Buy puts them in pole position to dominate this burgeoning industry.

BaaS Entitlements: The expiration of the limited-time BaaS (Battery as a Service) benefits likely boosted sales as customers rushed to take advantage of the offer.

Upcoming BaaS Updates

Nio’s BaaS program, offering benefits such as free billing after four payments and 60 vouchers for battery swaps over five years, has been a significant draw. An updated version of the BaaS entitlements is expected soon, which may continue to attract customers, albeit potentially at a reduced scale.

First-Quarter Earnings Outlook

Nio is set to release its Q1 2024 earnings on June 6. Analysts predict a loss per share of 31 cents and revenues of $1.48 billion, a year-over-year revenue decline of 4.65%. However, there are positive signs:

  • Past Performance: Nio surpassed earnings estimates twice in the last four quarters.     

  • Improving Margins: Nio’s gross margin improved to 7.5% last quarter, up from 3.9% a year ago, due to lower material costs and new model deliveries.

Investment Research Company Analysis (Zacks)

According to Zacks, Nio has an Earnings ESP (Expected Surprise Prediction) of 0.00%, indicating that the most accurate estimate is on par with the consensus estimate. Zacks currently ranks Nio with a #3 (Hold), suggesting that investors should wait for more positive signals before making a decision.

The Broader EV Landscape

Nio's surge is part of a broader trend among EV makers. In Hong Kong, Xpeng (NYSE: XPEV) and Li Auto (NASDAQ: LI) also saw gains, indicating robust investor interest in the sector. With Nio leading the pack, their Q1 earnings will be closely monitored for future delivery and financial health insights.

Watch Our Latest Video!

For a deeper dive into Nio’s plans and market positioning, watch our video about Nio and discover how Nio aims to expand in Europe and tackle potential tariff issues.

As Nio continues to innovate with programs like BaaS and new model launches, will these strategies be enough to sustain its momentum and drive further growth in the competitive EV market?

May 31, 2024: HK$NIO = $42.950

May 30, 2024: $NIO = $5.40

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