(NYSE:NIO) – China’s premium producer of electrical vehicles – announced its results in Q3 2020 on Tuesday with a quarterly loss lower than anticipated, guided by record deliveries and improved margins. While sales rose from 22% to RMB 4.53 billion (approximately $667 million), gross margins increased by about 480 basis points, up to 12.9%, supported by decreased input costs and improved output performance. NIO stock at https://www.webull.com/quote/nyse-nio continues to benefit from high demand for electricity in China, which leads to between 16,500 and 17,00 vehicles being shipped during the fourth quarter. This results in at least 35 percent sequential growth.
Although the performance and outlook for Q4 are better than anticipated, we assume that the Nio stock is overvalued. The stock exceeds 12x annually and trade is expected to rise by approximately 27x 2020. Compared to Tesla, an E-player more advanced, with good software capability and expanded Chinese visibility, trades with estimated revenue of about 13 times. While Nio’s growth rates are definitely higher than Tesla’s, the heavy rivalry of China’s EV markets with hundreds of manufacturers is still more risky.
Ahead of The Buyers
The premium Chinese electricity producer Nio (NYSE:NIO) saw stock rise in stock of about $45 per share last month by 58 percent, led by the high number of October shares and a favourable regulatory climate for electric vehicles in China. Following a 12x rally year to date, Nio is currently better than General Motors (NYSE:GM). Although Nio is without a doubt steadily increasing, the income on its route is doubling this year, for several reasons, the stock is overestimated. First, as Tesla is planning to start a locally made Model Y SUV, Tesla will give Nio a run for money in its home turf.
Chinese EV supplies push
The inventory prices of major U.S. electric vehicle manufacturers (EV) of China rose on Monday after strong shipments for October were announced. NIO stock– one of China’s top EV start-ups, has seen its stock rise by around 9%, as deliveries almost doubled in October to 5,055 cars over the year. Xpeng (NYSE: XPEV), another premium EV player, saw its stock increase by about 7 percent, with 3,040 cars shipped over the month, a 230 percent rise compared to a year ago, led largely by its P7 sedan sales that began earlier this year. Yet exports were somewhat fewer month-over-month.
Li Auto & Xpeng’s Market Summary Of Nio.
Nio was founded in 2014 and offers currently a prize of approximately $50k for three premium electrical SUVs, ES8, ES6 and EC6. In addition, Battery as a Service (BAaS) provides other unique technologies – enabling consumers to subscribe to vehicle batteries, instead of spending up front to purchase it. While production has increased, it hasn’t been threatened, as it recalled some 5,000 vehicles last year after many fires had been identified. You can check the NIO cash flow at https://www.webull.com/cash-flow/nyse-nio before investing.
Disclaimer: The analysis information is for reference only and does not constitute an investment recommendation.