Chinese EV (electric vehicle) manufacturer Nio (NYSE:NIO) will announce its fourth-quarter financial results on Wednesday, March 1. While supply-chain headwinds are expected to weigh on Nio’s Q4 performance, a quarter-over-quarter increase in vehicle deliveries might drive its revenues higher. However, the company could still report losses. Let’s dig deeper.
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Expectations from Nio’s Q4 Earnings
Nio recently announced that it delivered 40,052 vehicles in Q4 2022, up 60% year-over-year. Moreover, it is well above the 31,607 vehicles it delivered in Q3.
It’s worth highlighting that Nio lowered its Q4 delivery guidance in December 2022. The company said supply-chain headwinds and challenges in deliveries and production due to the outbreak of the COVID-19 virus in major Chinese cities took a toll on its operations. Given these challenges, Nio said it could deliver 38,500 to 39,500 vehicles in Q4, down from its earlier outlook of 43,000 to 48,000 vehicles.
Nio surpassed its reduced delivery outlook for Q4. Nonetheless, it could still report losses due to pressure on margins from increased battery cost per unit, increased personnel costs in research and development, and an overall inflationary environment.
Analysts expect Nio to post a loss of $0.27 per share in Q4 compared to $1.07 in the prior year’s quarter. Meanwhile, Wall Street expects Nio to report revenue of $2.15 billion in Q4, higher than the revenue of $1.83 billion in Q3 2022.
Nio has surpassed analysts’ sales forecast in the past 12 months. However, its bottom line fell short of the Street’s estimates in two consecutive quarters.
What is the Prediction for NIO stock?
Nio stock is a Moderate Buy on TipRanks. This consensus rating is based on six Buy and three Hold recommendations. Furthermore, analysts’ average price target of $17.13 implies a solid upside potential of 83.6%.
Bottom Line
The favorable long-term industry outlook, increased EV adoption, geographic expansion, and easing COVID restrictions in China will likely support Nio stock. However, economic uncertainty and industry-wide supply-chain challenges could negatively impact Nio stock in the short term.
