NIO is a relatively young Chinese electric vehicle manufacturing company founded in 2014 in Shanghai. Although it makes well-made electric cars and SUVs, it is not NIO’s vehicles that made headlines in 2020. In fact, it is the stock price, which increased 1000% to $50 a share, due to the $1 billion injection from the Chinese government. As a part of its bid to become a global green superpower, China has promised that 25% of car sales by 2025 will be new energy vehicles and not purely fueled by petrol or diesel, which created a huge potential market for NIO.
NIO’s shares rose 65.2% in November, according to data from S&P Global Market Intelligence. This happened due to rumors of its quick entry to a new geographic market, a strong quarterly report, and gaining momentum for expanding to broader markets.
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On November 3, InsideEVs reported that NIO is on track to enter the European market in 2021. Furthermore, NIO published its third-quarter earnings on November 17 topping the market's expectations. In its report, the company posted a non-GAAP loss per share of $0.12 on revenue of $666.6 million, while the average analyst estimate had targeted a per-share loss of $0.15 on sales of $628 million. Additionally, NIO delivered 12,206 vehicles in the third quarter, which resulted in the dipping of the stock shortly after the earnings release due to a sell-off for the broader market, although it quickly rebounded and set a new lifetime high. Surprisingly enough, NIO’s share price has dipped roughly 5% in December, despite the impressive number of vehicle shipments early in the month.
(Image credits: YCharts)
NIO is aiming to deliver between 16,500 and 17,000 vehicles in the fourth quarter with sales between $921.8 million and $947.9 million. This is ahead of Wall Street's targets with roughly 103% year-over-year at the midpoint of the target. Moreover, NIO is now valued at roughly $58.6 billion and is trading at approximately 24 times the expected sales for this year.
Auto stocks, mainly
stocks of electric vehicle manufacturers, have been some of the top-performing
stocks in the market in 2020. This is despite the industry’s bumpy road this
year. Likewise, analysts declare that NIO's fundamentals are on a positive track.
It is expected that revenue will double to more than $32 billion in 2021. Additionally,
Bank of America has a "buy" rating and $54.70 price target for NIO’s