NIO: Growth At All Costs May Not Last

Summary:

  • NIO’s stock rallied significantly yesterday after inspiring Q2 delivery numbers, which more than doubled.
  • The company’s financial performance suggests that management prioritizes growth at all costs, which is unsustainable and harmful to shareholders in the long term.
  • Valuation analysis suggests NIO’s stock is overvalued, fair share price estimated at $1.36.

NIO EVE Concept Беспилотный электромобиль выгружается из фургона для размещения в автосалоне NIO во Франкфурте

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Introduction

I remain bearish about NIO (NYSE:NIO) and want to reiterate my ‘Strong Sell’ rating for the stock. The stock declined by 2.4% since my previous thesis. My previous thesis could have


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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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