Is NIO still a buy?

Electric vehicle (EV) manufacturers have seen their stocks demolished over the years Auto/Tyre/Truck Sector. While the hype receded and reality took over. Fisker Inc. New York Stock Exchange: FSR shares fell into penny stock territory at 17 cents. Lucid Group Inc. NASDAQ: LCID is near record lows at $2.70, and Rivian Automotive NASDAQ: RIVN it is also trading near all-time lows at $11.04. Also Tesla Inc. NASDAQ:TSLA shares are oversold, down 34% year to date (YTD).

Chinese electric vehicle manufacturers are also suffering

Chinese electric vehicle manufacturers aren’t doing so well either Xpeng Inc. New York Stock Exchange: XPEV) trades from its lows to $9.73. Li Auto NASDAQ: LI is the exception as it continues to separate itself from the pack by being profitable and producing primarily battery hybrid electric vehicles (BEVs). This leaves the question: what can I say? NIO Inc. NYSE: NIO?

High-end luxury electric vehicles in China

NIO produces high-end electric vehicles that offer elegant design and luxury interiors with advanced technologies such as advanced driver assistance systems (ADAS) and semi-autonomous features. Its EC6 is an intelligent electric coupe SUV equipped with 9 driving modes, which include 5 basic and 4 modes based on weather and terrain scenarios. Sport+ mode accelerates acceleration from 0 to 100 KM/H in 4.4 seconds.

It offers adaptive lighting with a 1.77 meter panoramic glass roof. The ambient lighting offers 256 color options with 10 color themes with rhythmic and soothing effects that project a dynamic atmosphere. The lounge seats feature 3-zone heating with a backrest featuring 18-way adjustments and zero-gravity recline modes.

Dominant market share at 45%

According to NIO, they have a 45% market share in China’s electric vehicle sector. Unfortunately, profitability is another story. The company loses tons of money. It missed recent EPS estimates by more than 47%, despite beating revenue estimates by 1.5%.

Swing and Miss for Nio

On March 5, 2024, NIO reported a loss of 44 cents, missing analysts’ consensus estimates by 15 cents. Revenue rose 6.5% year over year to $2.41 billion, below analysts’ consensus estimates of $2.57 billion. Vehicle deliveries totaled 50,045, including 33,679 premium smart electric SUVs and 16,366 premium smart electric sedans, up 25% year-on-year. Total vehicle deliveries in 2023 were 160,038, up 30.7% year over year. Full-year 2023 revenues were $7.83 billion and full-year deliveries were 160,338 units. Vehicle margin was 11.9% in the fourth quarter of 2023. Gross margin improved to 7.5% in the fourth quarter of 2023 compared to 3.9% in the same period a year ago. NIO reported a net loss of $756 million in the fourth quarter of 2023. January 2024 deliveries were 10,055 vehicles and February 2024 vehicles were $8,132.

Reduced guide for Nio

NIO expects first-quarter 2024 revenue of $1.478 billion to $1.56 billion versus consensus estimates of $2.24 billion. Between 31,000 and 33,000 vehicle deliveries are expected, a decrease of 0.1% and an increase of 6.3% year-over-year.

Nio CEO Insights

NIO co-founder and CEO William Bin Li commented: “In 2023, NIO set a new delivery record of 160,038 vehicles, ranking first in China’s premium BEV market with an average transaction price of over RMB 300,000 “.

Li concluded: “We will soon begin deliveries of the 2024 NIO products equipped with the highest computing power among production vehicles and continuously improve users’ driving and digital experience. Meanwhile, we plan to release Navigate on Pilot Plus (NOP+) for urban roads to all NT2.0 users in the second quarter.”

NIO analyst ratings and price targets I’m on MarketBeat. NIO peers and competitor stocks can be found with MarketBeat Stock Screener.

Daily descending triangle

The daily candlestick chart on NIO illustrates a descending triangle pattern. The descending trendline formed after peaking at $9.57 on December 28, 2023, when the stock fell to the flat-bottomed horizontal trendline at $5.35. The daily market structure low (MSL) trigger has formed at $6.34, which also represents resistance at the descending trendline.

The daily relative strength index (RSI) is stalling at the 44-band. A drop below $5.35 would trigger a breakdown. The pullback support levels are at $5.35, $4.78, $4.21, and $3.52.

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