NIO Below $5: Investors Seem Way Too Bearish


  • NIO’s Q1 earnings showed improved vehicle margins and a strong forecast for Q2 deliveries, leading to a positive outlook for the firm’s shares.
  • The launch of NIO’s new low-cost EV brand, ONVO, represents an opportunity for the company to attack Tesla in China, but also poses risks to the company’s margin trend.
  • NIO has the second-highest vehicle margins, after Li Auto.
  • The Company has a low price-to-revenue ratio and upside catalysts (profit improvement, ONVO launch, growing vehicle margins).

NIO store at HKRI Taikoo Hui in Shanghai

Robert Way/iStock Editorial via Getty Images

Electric vehicle start-up NIO (NYSE:NIO) submitted a mixed earnings sheet for the first fiscal quarter on Thursday that thankfully showed a continual trend of vehicle margin improvements. NIO’s share price nonetheless dropped 7% after the

Analyst’s Disclosure: I/we have a beneficial long position in the shares of NIO, LI, XPEV either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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