The road to success for electric vehicle (EV) makers is paved with obstacles, but few have faced as many potholes in 2024 as Nio (NYSE:NIO). The company’s stock has nosedived a whopping 56% this year, making it one of the most battered names in the industry.
While deliveries have been increasing, the EV maker’s financial position has become more precarious with losses increasing from $859.5 million in 2020 to $3 billion in the past year.
Adding to the woes is the harsh geopolitical climate, highlighted by the EU’s recent decision to impose steep countervailing duties on Chinese EV makers, which could reach as high as 37.6%.
However, while many investors are jumping ship, Stone Fox Capital investor argues that this might be a mistake.
“All signs point to NIO reporting a banner year in 2025,” writes SFC, pointing to ambitious sales targets of $13.5 billion, reflecting a 40% growth.
The investor cites a number of reasons for optimism. For one, July marked the third consecutive month in which NIO reported over 20,000 vehicles delivered. Before May 2024, the last time the company hit this figure was in July 2023. In fact, NIO has set a new quarterly record with 57,373 vehicles delivered.
Another promising development, according to SFC, is the anticipated September release of the ONVO sub-brand. ONVO, or “Path to Happiness,” will debut with the L60, a family-sized SUV that has already garnered 60,000 orders. Priced at $30,000, the L60 is expected to generate around $4,500 in profit per vehicle.
All in all, SFC is bullish on NIO’s future prospects, suggesting that the current decline in share prices could present a compelling buying opportunity.
“Investors should use the current weakness in the stock to continue building a position,” concludes the investor, who writes that “the key investor takeaway is that NIO has slipped below $4 despite some promising developments.”
To this end, SFC confidently rates NIO shares a Strong Buy. (To watch Stone Fox Capital’s track record, click here)
So, that’s SFC’s view, how does Wall Street see the next 12 months panning out for NIO? Based on 5 Buys, 4 Holds and a single Sell, the analyst consensus rates the stock a Moderate Buy. Meanwhile, according to the $6.52 average price target, the Street expects NIO shares to climb 68% from current levels. (See Nio stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
