Why NIO Stock is Well-Positioned to Rally Further

TipRanks2022-07-06

Story HighlightsNIO stock has already surged 88% from recent lows. The rally is potentially sustainable – at least in the long term – as Nio is pursuing aggressive growth plans despite market ...

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Comments

Elmo.ek
2022-07-07
Elmo.ek
Good
Mindthink
2022-07-06
Mindthink
Ok
BigEasy
2022-07-06
BigEasy
Great!!
Tanyl
2022-07-06
Tanyl
Nio is a long term invest
ycwoo
2022-07-06
ycwoo
lke
Yappy
2022-07-06
Yappy
Like

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The rally is potentially sustainable – at least in the long term – as Nio is pursuing aggressive growth plans despite market ...</p>\n\n<a href=\"https://www.tipranks.com/news/article/nio-stock-is-well-positioned-to-rally-further/\">Source Link</a>\n\n</div>\n","source":"lsy1606183248679","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Why NIO Stock is Well-Positioned to Rally Further</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWhy NIO Stock is Well-Positioned to Rally Further\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-07-06 14:36 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.tipranks.com/news/article/nio-stock-is-well-positioned-to-rally-further/><strong>TipRanks</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Story HighlightsNIO stock has already surged 88% from recent lows. The rally is potentially sustainable – at least in the long term – as Nio is pursuing aggressive growth plans despite market ...</p>\n\n<a href=\"https://www.tipranks.com/news/article/nio-stock-is-well-positioned-to-rally-further/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"09866","symbol_name":"蔚来-SW","start_time":0,"source_url":"https://www.tipranks.com/news/article/nio-stock-is-well-positioned-to-rally-further/","article_id":"1121519092","we_media_id":null,"thumbnails":[],"rights":{"source":"lsy1606183248679","url":"https://www.tipranks.com/news/article/nio-stock-is-well-positioned-to-rally-further/","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=1121519092","pubTimestamp":1657089394,"sourceInfo":{"source_id":"lsy1606183248679","name":"TipRanks"},"weMediaInfo":null,"summary":"Story HighlightsNIO stock has already surged 88% from recent lows. The rally is potentially sustaina","collect":0,"end_time":0,"defaultTopTitle":"tipranks.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"09866":"蔚来-SW","NIO.SI":"蔚来","NIO":"蔚来"},"translate_title":"为什么蔚来股市处于进一步反弹的有利地位","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"09866":0.9,"NIO":0.9,"NIO.SI":0.9},"content_text":"Story HighlightsNIO stock has already surged 88% from recent lows. The rally is potentially sustainable – at least in the long term – as Nio is pursuing aggressive growth plans despite market headwinds.The electric vehicle industry has faced multiple headwinds in the last 12 months. Be it chip shortage or broader supply chain issues, industry growth has been impacted. Raw material inflation also threatens to impact sales as electric vehicle (EV) companies increase their selling prices.However, beyond these temporary headwinds, the EV industry is poised for growth over the next decade. The correction in EV stocks, therefore, provides a potentially-attractive entry opportunity.Nio (NIO) stock is one name from the Chinese electric vehicle industry that looks attractive. In the recent market meltdown, Nio stock corrected to lows of $11.67. In less than two months, the stock has surged 88% to current levels of $22.1.I am bullish on NIO stock, and I believe the rally will likely sustain. Let’s discuss the industry and company-specific catalysts that will support growth.In terms of favorable policies, there are two factors to note. China’s exemption of the 10% EV-purchase tax will conclude at the end of this year. The policymakers are, however, considering an extension of the exemptions. Also, China is considering an extension of EV subsidies into 2023.It’s very likely that the tax cuts and EV subsidies will be extended. With weak growth in China, favorable policies are needed to boost consumption. Nio is positioned to benefit from these potential extensions.Nio’s Smart Score RatingWorth noting, on TipRanks, NIO receives a Smart Score rating of 8 out of 10, indicating a solid chance for the stock to outperform the broader market.New Models to Boost Delivery GrowthFor the second quarter of 2022, Nio reported a 14.4% delivery growth on a year-over-year basis to 25,059 vehicles. Deliveries growth was impacted due to the renewed surge in COVID-19 cases. However, Nio is positioned for continued acceleration in deliveries once temporary headwinds wane.A key reason to be bullish is the continued launch of new models. Nio commenced delivery of ET7, a premium smart electric sedan, in March 2022. Further, ES7, a mid-large five-seater smart electric SUV, is expected to commence delivery in August 2022. ET5 delivery is also expected to begin in September 2022.Clearly, there is an attractive line-up of new vehicles, and this will boost delivery growth in 2023 and potentially in 2024.Another point to note is that Nio has aggressive international expansion plans. The company already has a presence in Norway. For the current year, Nio plans on expanding in Germany, the Netherlands, Sweden, and Denmark. Nio is also targeting a presence in 25 countries by 2025.Therefore, delivery growth over the next few years will be supported by international expansion. Nio reported cash and short-term investments of $7.8 billion as of March 2022. Therefore, the company has substantial financial flexibility for aggressive growth.Nio is already ramping up its manufacturing capabilities. Last year, Nio announced that it would work on doubling the capacity in its China assembly plant to 240,000 vehicles annually. There are also speculations that Nio is planning a manufacturing facility in the United States. This will help the company avoid a 25% import duty on cars.With ambitious growth plans, Nio stock looks attractive after a correction of 56% in the last 12 months.Vehicle Margins Can ImproveFor context, in the first quarter of 2022, Tesla (TSLA) reported $4 billion in operating cash flows. As electric vehicle companies scale up in terms of deliveries, there is the potential to generate robust cash flows.For Q1 2022, Nio reported a vehicle margin of 18.1% compared to 21.2% in Q1 2021. The margin was impacted in the near term due to higher investments and inflationary factors.However, in the next few years, the vehicle margin is likely to expand as delivery growth sustains. Also, if Nio plans factories in multiple locations (similar to Tesla), logistics costs should decline. Overall, Nio is positioned for strong cash flows in the next few years.On the flip-side, Nio is expanding aggressively into multiple countries. This will translate into higher marketing expenses. Cash burn is likely to sustain in the coming quarters.Having said that, the markets are likely to focus on delivery growth. With operating leverage, its EBITDA margin should also improve.Wall Street’s Take on NIO StockTurning to Wall Street, Nio has a Strong Buy consensus rating based on 10 Buy ratings assigned in the past three months. The average NIO stock price forecast of $33.66 implies 52.1% upside potential.Concluding Views – An Attractive EV StockThe global adoption of EVs is still at an early stage. However, as Europe looks to reduce dependence on Russia for energy, EV adoption is likely to accelerate.Nio will be positioned to benefit as it aggressively expands in Europe. Nio also has robust financial flexibility, and further equity dilution seems unlikely, even with aggressive growth plans.In terms of risks, a global recession can impact growth in 2023. However, it seems that this factor is largely discounted in the stock. Intensifying competition is also a potential risk.It’s worth noting that Nio reported a research and development expense of $277.9 million for Q1 2022. On a year-over-year basis, R&D expenses increased 156.6%. With a focus on innovation, Nio can gain market share even as competition intensifies.Overall, Nio stock looks attractive among EV stocks. Even after the recent rally, the stock is worth considering from a long-term perspective.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9079234513,"gmtCreate":1657202559533,"gmtModify":1676535968510,"author":{"id":"4098882746619960","authorId":"4098882746619960","name":"Elmo.ek","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":2,"crmLevelSwitch":0},"htmlText":"Good","listText":"Good","text":"Good","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9079234513","repostId":1121519092,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9079069972,"gmtCreate":1657121822096,"gmtModify":1676535953473,"author":{"id":"4102837759709900","authorId":"4102837759709900","name":"Mindthink","avatar":"https://community-static.tradeup.com/news/89b965229f7209196369426d161728ee","vip":1,"crmLevel":2,"crmLevelSwitch":1},"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9079069972","repostId":1121519092,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9079009853,"gmtCreate":1657116408372,"gmtModify":1676535952085,"author":{"id":"4115872329393252","authorId":"4115872329393252","name":"BigEasy","avatar":"https://community-static.tradeup.com/news/c1625a86661451cb235b95a4f1efa727","vip":1,"crmLevel":3,"crmLevelSwitch":0},"htmlText":"Great!!","listText":"Great!!","text":"Great!!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9079009853","repostId":1121519092,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9070770776,"gmtCreate":1657115538495,"gmtModify":1676535951828,"author":{"id":"4087109808120260","authorId":"4087109808120260","name":"Tanyl","avatar":"https://static.tigerbbs.com/174329973340cf0f5b68791ee5b08afd","vip":1,"crmLevel":9,"crmLevelSwitch":1},"htmlText":"Nio is a long term invest","listText":"Nio is a long term invest","text":"Nio is a long term invest","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9070770776","repostId":1121519092,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9070447410,"gmtCreate":1657098279930,"gmtModify":1676535949015,"author":{"id":"3565146699964497","authorId":"3565146699964497","name":"ycwoo","avatar":"https://community-static.tradeup.com/news/2f48b4bbc66c0bf509f7199142c1a2f2","vip":1,"hat":"https://static.tigerbbs.com/b073a07f77dbe6b3bec6b12311fde6bd","crmLevel":2,"crmLevelSwitch":1},"htmlText":"lke","listText":"lke","text":"lke","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9070447410","repostId":1121519092,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9070424178,"gmtCreate":1657094462394,"gmtModify":1676535948427,"author":{"id":"3572077804076143","authorId":"3572077804076143","name":"Yappy","avatar":"https://static.tigerbbs.com/ab4d89913ade03f15c782b99132ba22f","vip":1,"crmLevel":7,"crmLevelSwitch":0},"htmlText":"Like","listText":"Like","text":"Like","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9070424178","repostId":1121519092,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":112,"commentSize":12,"repostSize":0,"favoriteSize":2,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.24.2","shortVersion":"4.24.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/1121519092"}