Nio Misses Q4 Expectations on Supply Woes; Shares Fall

Chinese premium smart electric vehicle (EV) manufacturer Nio Inc. (NIO) reported mixed fourth-quarter results, with revenue beating and earnings missing estimates. Following the news, shares dropped 2% during the extended trading session on March 24.

Nio reported a Q4 loss of RMB 1.07 per share on revenues of RMB 9.9 billion, while the consensus estimate had pegged a loss of RMB 1 per share on revenues of RMB 9.7 billion. What’s worse, even the Q1 revenue estimate of RMB 9.8 billion fell short of the consensus estimate of RMB 10.5 billion.

The EV maker is battling pandemic-triggered raw material and supply chain issues, forcing it to dull its production, an industry-wide challenge.

Results in Detail

In Q4, Nio posted total revenues of $1.55 billion, of which vehicle sales contributed the majority of $1.45 billion.

Notably, Q4 adjusted net loss attributable to NIO’s ordinary shareholders stood at $269.2 million, reflecting $0.16 per ADS.

Vehicle margins improved both sequentially and year-over-year basis to 20.9%. This was achieved by higher average selling prices coupled with a higher take rate for the 100 kWh battery.

For FY21, Nio reported total revenues of $5.67 billion, of which vehicle sales were $5.21 billion.

Furthermore, FY21 adjusted net loss attributable to NIO’s ordinary shareholders came in at $471.8 million, representing $0.29 per ADS.

Nio Deliveries Update

In Q4, Nio delivered a total of 25,034 EVs comprising 5,683 ES8s, 12,180 ES6s, and 7,171 EC6s. The deliveries rose both sequentially (2.4%) and year-over-year (44.3%).

For full year fiscal 2021, Nio delivered a total of 91,429 EVs, reflecting a whopping 109.1% growth over FY20.

In January and February 2022, Nio delivered 9,652 and 6,131 EVs, respectively, reflecting an increase of 34% and 10% year-over-year, respectively.

Moreover, Nio stated that it is expected to launch its first ET7 deliveries on March 28, 2022, and the ET5 models in September 2022.

Executive Comments

Founder, Chairman, and CEO of Nio, William Bin Li, said, “2022 will be a year of reacceleration for NIO. We will deliver three new products based on NIO Technology Platform 2.0 this year. In March, we kicked off the test drive of ET7 and will start its delivery on March 28, 2022. After the launch of ET5 in December 2021, we have received great feedback from prospective users, and expect to start its delivery in September 2022. In addition, we plan to offer our products and services in more countries and regions in 2022 to further expand our global user community.”

Q1FY22 Outlook

Based on current business momentum and the economic environment, Nio expects total revenues to fall in the range of $1.51 billion to $1.57 billion, much lower than consensus estimates of $1.66 billion.

On the EV delivery front, Nio expects to deliver between 25,000 and 26,000 EVs in Q1, also below consensus estimates of around 28,000 deliveries.

Analysts’ Take

Responding to Nio’s financial performance, Mizuho Securities analyst Vijay Rakesh reiterated a Buy rating on the NIO stock with a price target of $65, which implies a whopping 195.7% upside potential to current levels.

Rakesh is encouraged by Nio’s EU expansion plans of entering Germany, Denmark, Sweden, and the Netherlands in 2022. The analyst’s $65 price target is based on 9.2 times the FY22 (estimated) Price/Sales multiple.

“We see NIO’s value leadership in the premium EV segment with solid battery technology and ADAS roadmaps as drivers of growth. Its core business, focused in domestic China, is another advantage with regulatory support and market familiarity. Global expansion is in the works, and we believe will become a meaningful contributor to future growth,” Rakesh said.

With 13 Buys and Two Holds, the NIO stock commands a Strong Buy consensus rating. The average Nio price target of $46.21 implies 110.2% upside potential to current levels. Notably, its shares have lost 34.3% year-to-date.

Blogger Opinions

TipRanks data shows that financial blogger opinions are 81% Bullish on NIO, compared to a sector average of 68%.

Download the TipRanks mobile app now

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Related News:
Spotify Strikes Billing Deal with Google, Stock Up 3%
Phunware Falls 11% on Mixed Preliminary 2021 Financial Results
GameStop Jumps 14.5% on Cohen’s Stake Increase