Nio Q2 earnings on deck: What to expect

Electric vehicle maker Nio (NYSE:NIO) is scheduled to report second-quarter earnings on Thursday before markets open.

Wall Street expects the company to post EPS of -$0.30, while revenue is expected to be $2.44 billion. Over the last two years, NIO has beaten both EPS and revenue estimates 38% of the time.

Nio faces intense competition in the Chinese EV market, with the company’s delivery number declining in August and July. The Shanghai-based company also saw its CFO Steven Wei Feng resigning from his position.

Seeking Alpha analysts and Seeking Alpha’s Quant ratings are cautious and rated the stock a Hold, while Wall Street analysts consider it a Buy.

“While robust revenue growth is expected, substantial operating losses are likely to continue, too. The outlook for Q3 2024 can be subdued as well,” pointed out a recent Seeking Alpha analysis by Long Term Tips, adding that even longer-term promise, in the likes of battery swaps, can take time to impact profitability.

However, Morgan Stanley analyst Tim Hsiao noted with improving mix/scale and reduction in promotions for certain models, the brokerage “expects 2Q GPM to meet the company’s guidance of double digits.”

Earlier in August, the company unveiled its ambitious plans to extend charging stations across China to increase the adoption of electric vehicles.

Still, the stock continues to struggle and fell 54% so far this year, compared to the nearly 16% rise in the broader S&P500 Index.

Over the last three months, EPS estimates have seen three upward revisions compared to no downward revisions. Revenue estimates have seen four upward revisions versus no downward moves.