Smart EV maker NIO Inc. (NIO) has provided an update on its independent internal review of the allegations made by short-seller Grizzly Research in June about the company exaggerating its numbers. In response, NIO had set up an independent committee of its Board of directors to review the allegations. The committee had also roped in an international law firm and a forensic accounting firm to assist in the process.
The review is now “substantially” complete, and the committee has “concluded that these allegations were not substantiated.”
When Do NIO Earnings Come Out?
In another development, NIO is set to report its second-quarter numbers before the market opens on September 7. The Street expects NIO to report a net loss per share of $0.17 for the period.
In the last eight quarters, NIO has failed to surpass consensus estimates only three times. In the comparable year-ago period, it reported a net loss per share of $0.06 versus the analysts’ expectations of a net loss per share of $0.09.
Furthermore, the company is gearing up to hit the Chinese market with its ES7 SUV and the European market with its ET7 electric sedan. The vehicle deliveries in Europe could potentially boost NIO’s numbers in the fourth quarter.
Is NIO Stock a Buy?
Shares of the company are up ~8% over the past five days, and analysts are seeing a further 62.4% upside based on a Strong Buy consensus rating and an average NIO stock price target of $33.04. Deutsche Bank’s Edison Yu is even more optimistic about NIO with a Buy rating and a price target of $45, which points to a massive 120.5% potential upside. The analyst feels the market is yet to fully take cognizance of NIO’s expanding global footprint.
Closing Thoughts – NIO Stock is Starting to Emerging from Challenges
NIO is beginning to emerge from challenges such as the severe COVID-19 lockdown and supply-chain bottlenecks. The findings of the internal review should help shore up investor confidence after the short seller report. All eyes will now be on the quarterly numbers on September 7.
