2024-06-07 06:45:53 ET
Summary
- NIO's Q1 earnings showed improved vehicle margins and a strong forecast for Q2 deliveries, leading to a positive outlook for the firm's shares.
- The launch of NIO's new low-cost EV brand, ONVO, represents an opportunity for the company to attack Tesla in China, but also poses risks to the company's margin trend.
- NIO has the second-highest vehicle margins, after Li Auto.
- The Company has a low price-to-revenue ratio and upside catalysts (profit improvement, ONVO launch, growing vehicle margins).
Electric vehicle start-up NIO ( NIO ) submitted a mixed earnings sheet for the first fiscal quarter on Thursday that thankfully showed a continual trend of vehicle margin improvements. NIO's share price nonetheless dropped 7% after the Q1'24 earnings report, largely due to persistently high losses. NIO also announced the launch of a new, low-cost electric vehicle brand recently in a bid to attack the low-cost EV market segment and challenge Tesla's ( TSLA ) Model Y. I believe NIO still deserves the benefit of the doubt and since deliveries are roaring back in the second-quarter, the risk profile remains skewed to the upside, especially with the kind of valuation that NIO now offers EV investors....
Read the full article on Seeking Alpha
For further details see:
NIO Below $5: Investors Seem Way Too Bearish