NIO Inc. (NIO)’s lavish spending decreased their earnings, can positive sales help the growth. Founded in 2014 and headquartered in Shanghai, the EV manufacturer is known for their rebellious take on batteries. NIO designs vehicles with removable batteries and works on a network of battery-swapping stations. NIO opened the 1,000 th Swapping station in 2022.
NIO Inc. (NIO) – Financial Health
Being an EV manufacturer, NIO Inc can be seen following in Tesla’s footsteps by working on a time- and recession-tested strategy. They focus on launching high-end luxury vehicles, as their brand recognition could boost the required operating capital to develop affordable segment vehicles.
In January 2022, NIO sold 9,652 units; in December 2022 saw 15,815 units. Recently, in January 2023, the company sold 8,506 units. Vehicle sales of $2.14 billion gained 60.2% year over year.
According to its Q4 2022 report, NIO’s selling, administrative and general expenses went up by 49.6%. Their Research and Development expenses grew by 117.7%. NIO’s vehicle margin decreased to 6.8%, a whopping 20.9% in Q4 2021.
However, the improvement in EV sales could not be translated into the company’s healthy margin; their extravagant spending has also been a major factor in earnings losses.
NIO Inc. (NIO) – Price Analysis
When writing, NIO stock was trading at $8.51, dropping 3.19%. Previous close and open were at $8.79 and $8.78, respectively. The fifty-two-week change was negative 39.65%. The market cap is $14.524 billion. Revenue increased by 62.25% to $16.06 billion. Operating expenses grew by 77.53% to $7.36 billion. The company’s net income was negative 5.85 billion after dropping by 168.31%.
Earnings per Share dropped by a massive 185.92% to negative $3.07, revenue per share was just $30.10, while quarterly revenue growth seemed positive at 62.20%. NIO reported earnings on March 1, 2023, where estimated revenue was $2.486 billion, and reporter revenue was $2.328 billion, with a drop of 6.33% and a surprise of negative 157.478 million. Still, the estimated price is $18.98, with an upside of 123.1%.
NIO Inc. (NIO) – Chart Analysis
A negative earnings report, coupled with a loss in net income, dropped EPS considerably. The price currently is in the demand zone, which also is a strong support zone for the price action. Chances of further southward movement are rare unless a very negative news update is seen.
The price might increase and consolidate between the demand zone and the $10.63 mark. This mark can be considered as immediate resistance to the current point. If the price passes this barrier, it could consolidate further upward toward the supply zone.
Disclaimer:
The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/03/12/nio-inc-nio-stock-can-high-ev-sales-counter-lavish-spending/