NIO-EV Stock Going Downhill to Avoid Right Now

Electric vehicle (EV) demand is expected to expand manifold in the coming years. According to a new report by BloombergNEF, annual spending on passenger EVs hit $388 billion in 2022,up 53% year-over-year. Moreover, the total value of EVs sold to date in the passenger vehicle segment has now crossed $1 trillion.

However,logistic hindrances remain a matter of concern for EV production. Global geopolitical conflicts, insufficient EV charging infrastructure, and scarcity of critical raw materials such as lithium, cobalt, and nickel could hamper the optimal productivity of the EV industry.

According to J.D. Power’s Electric Vehicle Experience Public Charging Study, the number offailed charging attempts rose from 15%in the first quarter of 2021 to more than 21% by the third quarter of 2022.

Furthermore, affordability remains abarrier to adoption. According to a study, only 8% of Americans actively consider an EV as their subsequent daily transport.

Given the backdrop, fundamentally weak EV stock NIO$NIO Inc.(NIO)$ $NIO Inc.(NIO.SI)$ $NIO-SW(09866)$ , which has been declining in price, might be best avoided now.

Headquartered in Shanghai, China, NIO designs, develops, manufactures, and sells intelligent electric vehicles in China. It offers five, six, and seven-seater electric SUVs and smart electric sedans.

NIO’s forward EV/Sales of 2.00x is 62% higher than the industry average of 1.24x. Its forward Price/Sales of 2.27x is 137.3% higher than the industry average of 0.96x.

NIO’s trailing-12-month gross profit margin of 14.43% is 59.2% lower than the industry average of 35.33%. Its trailing-12-month negative net income margin of 25.27% is lower than the industry average of 4.81%.

NIO’s loss from operations came in at $544.08 million for the quarter that ended September 30, 2022, up 290.2% year-over-year. Its comprehensive loss increased 30.9% year-over-year to $522.44 million.

NIO’s EPS is expected to decline 26% year-over-year to negative $0.27 for the yet-to-be-reported quarter ending December 2022. Over the past year, the stock has lost 56.8% to close the last trading session at $10.03.

It has an overall grade of F, which indicates a Strong Sell.