Shares of NIO (NIO) declined in pre-market trading after the company reported a wider-than-expected loss in the third quarter. The Chinese EV major’s losses narrowed to RMB2.14 ($0.31) per American Depositary Share (ADS), compared with a loss of RMB2.28 per ADS in the same period last year. However, this loss was wider than analysts’ expectations of a loss of $0.27 per share.
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Furthermore, the company’s revenues dropped by 2.1% year-over-year to RMB18.67 ($2.66) billion in the third quarter. However, this was above Street estimates of $2.64 billion. Additionally, NIO delivered 20,976 vehicles in October with cumulative deliveries reaching 619,851.
NIO’s Management Comments on Q3 Results
William Bin Li, Founder, Chairman, and CEO of NIO commented, “In the third quarter of 2024, we achieved a record-breaking delivery of 61,855 smart electric vehicles. NIO brand has firmly secured the top position in China’s BEV market for vehicles priced over RMB 300,000, holding more than a 40% market share in the first three quarters of this year.”
The company’s management added that NIO has started the deliveries of ONVO L60, its electric mid-size Sports Utility Vehicle (SUV), and expects its vehicle delivery volume to reach a new high in the fourth quarter.
In addition, in the third quarter, the company’s gross margin expanded to 13.1% in Q3 due to increasing cost efficiencies.
NIO Issues Q4 Guidance
Looking ahead, the company expects its vehicle deliveries to be between 72,000 and 75,000 units in the fourth quarter while revenues are likely to be in the range of RMB19.68 billion ($2.8 billion) to RMB20.38 billion ($2.9 billion). For reference, analysts expect the company to report revenues of $3.18 billion in the fourth quarter.
What Is a Good Target Price for NIO?
Analysts remain cautiously optimistic about NIO stock, with a Moderate Buy consensus rating based on nine Buys, four Holds, and one Sell. Over the past year, NIO has declined by more than 35%, and the average NIO price target of $6.33 implies an upside potential of 36.7% from current levels. These analyst ratings are likely to change following NIO’s results today.
