Nio Reports Mixed 4Q Results; Shares Drop 5.9% Pre-Market

Shares of Nio Inc dropped 5.9% in pre-market trading as the Chinese electric vehicle (EV) maker reported a larger 4Q loss than analysts had forecasted and monthly EV deliveries fell in February on a month-on-month basis.

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Nio (NIO) incurred an adjusted loss per share of $0.14, wider than analysts’ estimates of a loss per share of $0.07. Revenues in 4Q surged 133.2% to $1.02 billion year-on-year and above the Street consensus of $1.01 billion.

Nio CEO William Bin Li said, “NIO concluded a transformational 2020 with a new quarterly delivery record of 17,353 vehicles in the fourth quarter of 2020. The strong momentum has continued in 2021 as we achieved a historic monthly delivery of 7,225 vehicles in January and a resilient delivery of 5,578 vehicles in February, representing strong 352% and 689% year-over-year growth, respectively.”

“Supported by competitive product offerings, outstanding services and innovative business models, we have won increasing recognition from our users and expect to deliver 20,000 to 20,500 vehicles in the first quarter of 2021,” Li added.

The rise in revenues was driven by more product offerings by NIO and the expansion of its sales network last year. The company delivered 17,353 EVs in 4Q more than double the 8,224 EVs handed over during the same quarter last year.

In the first quarter of FY21, NIO expects total revenues to range between $1.13 billion to $1.16 billion. (See Nio stock analysis on TipRanks)

HSBC analyst Yuqian Ding raised the price target from $44.70 to $54 but reiterated a Hold rating on the stock.

In a note to investors, Ding said that EV sales in China rose 8% last year while the analyst was expecting the EV market to shrink, indicating that “clearly EV adoption is happening faster than we thought.”

Ding has raised the forecast for EV demand by 19% for this year and the next and accordingly also lifted the earnings forecast for NIO to account for its “strong volumes.” However, the analyst noted that despite NIO’s “strong brand and product traction,” NIO is facing tough competition from its competitors through “better quality models and aggressive pricing.”

The rest of the Street is cautiously optimistic on the stock with a Moderate Buy consensus rating based on 7 Buys and 3 Holds. The average analyst price target of $68.76 implies around 38.2% upside potential to current levels.