The Market Is Likely Wrong About NIO

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The Market Is Likely Wrong About NIO

seekingalpha2023-06-10

Robert WayElectric vehicle company NIO (NYSE:NIO) just reported earnings for the first-quarter and NIO beat EPS expectations by $0.05 per-share while missing on revenues. NIO also, unfortunately, ...

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iamlrk
·2023-06-10
Not knowing how to slowly turn profitable will be detrimental
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Longs
·2023-06-10
👌🏼🙏🏼
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chinchillx
·2023-06-10
The china govt will prop it up as they announced
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NIO also, unfortunately, ...</p>\n\n<a href=\"https://seekingalpha.com/article/4610614-the-market-is-likely-wrong-about-nio\">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":"EVS.SI","symbol_name":"MSCI China Electric Vehicles and Future Mobility ETF-NikkoAM","start_time":0,"source_url":"https://seekingalpha.com/article/4610614-the-market-is-likely-wrong-about-nio","article_id":"2342533369","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2342533369","pubTimestamp":1686354540,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Robert Way Electric vehicle company NIO (NYSE:NIO) just reported earnings for the first-quarter and NIO beat EPS expectations by $0.05 per-share while missing on revenues. NIO also, unfortunately, exp","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"EVS.SI":"MSCI China Electric Vehicles and Future Mobility ETF-NikkoAM","BK4532":"文艺复兴科技持仓","NIO":"蔚来","09866":"蔚来-SW","BK4531":"中概回港概念","BK4585":"ETF&股票定投概念","BK4534":"瑞士信贷持仓","BK4555":"新能源车","LU0708995583.HKD":"TEMPLETON CHINA \"A\" (HKD) ACC","BK4509":"腾讯概念","XPEV":"小鹏汽车","BK4588":"碎股","BK4526":"热门中概股","BK4574":"无人驾驶","BK4551":"寇图资本持仓","BK4505":"高瓴资本持仓","BK4581":"高盛持仓","NIO.SI":"蔚来","BK4504":"桥水持仓","LU0320764599.SGD":"FTIF - Templeton China A Acc SGD","LU0052750758.USD":"富兰克林中国基金A Acc","BK4099":"汽车制造商","BK4548":"巴美列捷福持仓"},"translate_title":"市场对蔚来的看法可能是错误的","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"XPEV":1,"NIO":1,"NIO.SI":0.6,"EVS.SI":0.6,"09866":0.6},"content_text":"Robert WayElectric vehicle company NIO (NYSE:NIO) just reported earnings for the first-quarter and NIO beat EPS expectations by $0.05 per-share while missing on revenues. NIO also, unfortunately, experienced a slowdown in electric vehicle deliveries in May and saw a continual margin contraction as competition in the sector is ramping up, which has also been reflected in a weak second-quarter delivery forecast. However, NIO is launching new products soon which could reinvigorate the company's delivery and top line growth. I believe fears over a prolonged slowdown in EV production/deliveries and over the possibility of NIO becoming a penny stock are greatly exaggerated!Data by YChartsMixed earnings card for Q1'23, declining vehicle margins are a risk factorNIO reported 10.7B Chinese Yuan ($1.56B) in revenues for the first-quarter, showing an increase of 7.7%. The company's revenue results underperformed expectations by about $80M. Still, NIO is ramping up revenues and the company is set to release new EVs that could help boost NIO's delivery and revenue growth going forward: NIO launched both the ES6 and the new ET7 in May and is getting ready to launch the new ES8 in June.While NIO's revenues kept growing, the same cannot be said for the company's vehicle margins: NIO's margins declined to 5.1% in Q1'23 and were down 1.70 PP compared to Q4'22. Contracting vehicle margins are a reflection of growing competition and pricing pressure in the competitive Chinese EV industry.Source: NIONIO’s delivery accomplishments relative to EV rivalsElectric vehicle start-up NIO delivered 6,155 electric vehicles in the month of May, which marked a 7.6% decrease month over month and a 12.4% decrease year over year. Despite the decline in deliveries in May, NIO was not the worst performer in the industry group, however: XPeng (XPEV)’s May deliveries declined 25.9% year over year. The only bright spot was Li Auto which benefited from a strong sales performance of the Li 7, an all-electric 5-seater sport utility vehicle which saw its second straight month of deliveries exceeding 10 thousand units.DeliveriesMar-23Mar Y/Y GrowthApr-23Apr Y/Y GrowthMay-23May/ Y/Y GrowthNIO10,3783.9%6,65831.2%6,155-12.4%XPEV7,002-54.6%7,079-21.4%7,506-25.9%LI20,82388.7%25,681516.3%28,277146.0%Click to enlarge(Source: Author)NIO's sedan ramp disappointed in MayA key driver of NIO's growth in FY 2022 and in the first few months of FY 2023 has been the ramp of new all-electric sedans which marked a shift away from the company's previous SUV focus. However, due to an overall decline in deliveries in a more challenged market, NIO's sedan ramp also disappointed in May. New product launches and NIO's sedan delivery growth are key reasons why I believe NIO still retains a lot of upside potential.In the last month, NIO delivered 3,759 electric vehicles that are part of the company's sedan category -- namely its key ET5 and ET7 models. Because of the drop in deliveries, NIO's sedan share also dropped from 74.3% in April to 61.1% in May. However, I continue to believe that NIO is still very much in the early stages of its sedan ramp and new product releases should drive NIO's delivery and top line growth going forward.NIO ET7/ET5 MetricsJan-23Feb-23Mar-23Apr-23May-23Total Deliveries8,50612,15710,3786,6586,155NIO Sedan Deliveries6,3167,1207,1754,9453,759M/M Growth-29.6%12.7%0.8%-31.1%-24.0%Sedan Delivery Share74.3%58.6%69.1%74.3%61.1%Click to enlarge(Source: Author)Second-quarter delivery outlookNIO has guided for Q2'23 delivery volume of 23,000 and 25,000 electric vehicles, which shows a potential decrease of up 8.2% over the year-earlier volume. While the outlook isn't great, investors have to consider that NIO has just launched (or is in the process of launching) three new EV models (the ES6, the ET7 and the ES8).NIO's valuation, penny stock fearsNIO's shares declined after the company released earnings for the first-quarter. In my opinion, NIO represents deep value right now and fears over shares potentially trading down to the penny stock range ($5 or less) are greatly exaggerated. NIO is still expected to see dramatic growth in its revenue base in the next five years: NIO is expected to grow its revenues from $11.65B in FY 2023 to $41.19B in FY 2028, implying an average annual revenue growth rate of 29%.Additionally, shares of NIO represent deep value for long term investors, in my opinion. NIO's revenue potential is valued at less than 1.0X forward revenues while both XPeng and Li Auto are selling at much higher multiplier factors.Data by YChartsRisks with NIOThe biggest risk for NIO, as I see, is a potential slowdown in sedan deliveries which have been instrumental in pushing NIO's delivery volume above 10,000 monthly units in February and March. Any disappointments down the road regarding the ramp of sedan products, which are offsetting slowing growth in the SUV market, would likely be a negative for NIO's shares. What would change my mind about NIO is if the company continued to see a slowdown in its sedan ramp and a deteriorating EPS revision trend.Final thoughtsNIO's earnings card for the first-quarter was mixed and the company has seen a growth slowdown in May. NIO's vehicle margins also contracted in the first-quarter while revenue growth also (expectedly) slowed. However, NIO is still on track to produce close to 8,000 EVs a month during the second-quarter (based on NIO's mid-point guidance). While there is also a risk regarding vehicle margins in the short term, NIO is still expected to generate near-30% annual top line growth between FY 2023 and FY 2028. NIO is still very much at the beginning of its EV ramp in my opinion, and patient long term investors are likely going to be rewarded by betting on the EV company!","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":185758771953792,"gmtCreate":1686390545210,"gmtModify":1686390548938,"author":{"id":"3576760012402347","authorId":"3576760012402347","name":"iamlrk","avatar":"https://static.tigerbbs.com/2f2f0ea78b8f42153ba6eca68c3600aa","vip":1,"crmLevel":4,"crmLevelSwitch":0},"htmlText":"Not knowing how to slowly turn profitable will be detrimental&nbsp;","listText":"Not knowing how to slowly turn profitable will be detrimental&nbsp;","text":"Not knowing how to slowly turn profitable will be detrimental","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/185758771953792","repostId":2342533369,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":185755775553648,"gmtCreate":1686389998057,"gmtModify":1686390008972,"author":{"id":"4115290449563752","authorId":"4115290449563752","name":"Longs","avatar":"https://community-static.tradeup.com/news/824b5073731ab909a8d4e129caa8d995","vip":1,"crmLevel":6,"crmLevelSwitch":0},"htmlText":"👌🏼🙏🏼","listText":"👌🏼🙏🏼","text":"👌🏼🙏🏼","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/185755775553648","repostId":2342533369,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":185749882032144,"gmtCreate":1686388632228,"gmtModify":1686388639400,"author":{"id":"3575764142275716","authorId":"3575764142275716","name":"chinchillx","avatar":"https://static.tigerbbs.com/8fe1632cb6b0562a7b74cfbbbad35b14","vip":1,"crmLevel":2,"crmLevelSwitch":0},"htmlText":"The china govt will prop it up as they announced","listText":"The china govt will prop it up as they announced","text":"The china govt will prop it up as they announced","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":6,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/185749882032144","repostId":2342533369,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":150,"commentSize":3,"repostSize":3,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}