US Market Bias To NIO, Non-US EV Maker.
Having monitored EV stocks for a while, I observed that when it comes to EV stocks evaluation, there is biasness exhibited by Wall Street “professionals”.
For an apple-to-apple comparison, I am selecting $Rivian Automotive, Inc.(RIVN)$ and $NIO Inc.(NIO)$.
Between the two EV makers, they have an IPO gap of 3 years.
NIO was listed on 12 Sep 2018.
Rivian was listed on 10 Nov 2021.
Comparison would be based on the followings:
Q1 2023 Top line.
Q1 2023 Bottom line.
Q1 2023 Gross profit.
Q1 2023 Free cash flow.
Q1 2023 EV delivery.
2023 EV annual delivery.
Stock Price.
(1) Q1 2023 Revenue.
Rivian reported a revenue of $661 Million.
Nio reported a revenue of $1.56 Billion.
By comparison, NIO’s reported revenue is 2.36 times more than Rivian’s.
Again, Rivian was valued more favorably by the US analysts than NIO.
(2) Q1 2023 Earnings per share (EPS).
Rivian net loss per share was -$1.25.
Nio fared better. Its net loss per share was -$0.13.
Rate at which Rivian is losing money is 9.62 times more than Nio.
Yet, Rivian was praised for its growth potential and innovation, while NIO was criticized for its low profitability and high competition.
(3) Q1 Gross Profit.
Rivian generated -$535) Million (loss) in Q1 2023; that is a further decline of -6.57% YoY.
Nio did not fare better. It generated a gross profit of $23.6 Million; that is a retreat further of -88.8% YoY.
(4) Q1 2023 Free Cash Flow (FCF).
At end of 31 Mar 2023, Rivian reported a FCF of $11.78 Billion.
Nio reported a FCF of $5.5 Billion; that is 46% less than Rivian’s.
A higher FCF is favoured as company will have more leeway to continue running its business, pay for staff salaries, etc..
(5) EV Delivery.
In Q1 2023, Rivian delivered 9,395 units of its R1T pickup truck and R1S SUV.
NIO delivered 31,041 units of its ES8, ES6, EC6 and ET7 models.
Despite having delivered 3.3 times more than Rivian, NIO received less media attention and recognition in the US market.
(6) Annual EV Delivery.
During Q1 2023 conference, Rivian confirmed that it is still on track to meet a 50,000-vehicle production target for 2023.
NIO, Chief Financial Officer, Mr Steven Feng has mentioned that “Nio was still on target to deliver 250,000 EV by year” end during his Bloomberg television interview on 22 Mar 2023.
Assuming both EV makers are able to fulfill their claims, Nio’s delivery would be 5 times more than Rivian’s.
(7) EV Stock Price on Fri, 21 Jul 2023.
Rivian's stock price closed at $25.27, giving it a market capitalization of $23.74 Billion.
NIO's stock price closed at $10.38, giving it a market capitalization of $16.07 Billion.
Rivian's stock price is 143.45% higher than NIO's, despite having overall “Lower”:
Revenue.
Net income or EPS.
Gross profit.
EV deliveries.
Rivian's stock price is driven by its hype & optimism.
Observed the sudden spike in stock price after 26 Jun 2023 (see above chart).
While NIO's stock price is weighed down by its skepticism & pessimism.
Summarizing My Thoughts:
Please find a summary of the comparisons (see above), based on
Q1 2023 earnings.
EV delivery metrics.
Overall, Nio edges out Rivian in every factor except for Free cash flow.
Non-tangible factors have not been considered: (for instance)
Customer experience: in charging battery vs swapping battery.
Technology EV has to offer: Nio will be switching to semi-solid state batteries from end July 2023 onwards.
With RSI at “71”, Rivian is definitely overvalued & overhyped.
With RSI at “59”, NIO, is undervalued & underappreciated.
Overall, the US market is unfair and prejudiced, when it comes to evaluating EV companies from countries other than US.
Do you think US analysts are biased towards non-US EV makers?
Do you think NIO is a better company and stock than Rivian?
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For your information, and after the release of profit and loss reports in Rivian, expectations for the month of October indicate that Rivian is facing severe and very severe losses.
From an operational perspective, NIO has also recently recorded some very respectable successes: NIO reported its second-highest monthly delivery volume of FY 2023 (only behind February) and regained the significant 10,000 EV delivery threshold in June for the first time since March.
The anticipated negative reports for Rivian could potentially impact investor confidence in the company, leading to a decline in its stock price.
Yes, this unfairness shows subjective bias in the marketplace. I hope that the American media will stop guiding the direction and deceiving investors.
Rather sad that after 18 months of pummeling they still feel the need to drive it down even after a good report.
Still holding, last time I gave up and sold at 15. Hope it pays off this time
Hi Readers, I am Re-posting my article on$NIO Inc.(NIO)$
This post is being buried by my latest post on US market on 25 Jul 2023. It makes me sad that it is not getting the airtime it deserves.
Hence this Re-post. Hopefully it will be able to get it more attention and a new lease of life and a whole new group of audience.
Thanks for reading in advance,
JC888
Would you consider "Follow me" to get firsthand read of my daily new posts? Thanks!
This is also my latest from today. See if you like it too. Give a "Like" or "Share" or "Re-post" - thanks!
Retailers are in a frenzy , institutions will come in and pick up cheap. Stay the course.
this is an unprofitable company and it's stock market not charity so wake up
The shorts are trying to get people to dump. We've seen this show before.
Still in the buy zone…if you can’t see it, you don’t deserve it😂
the stock will move quickly when it is revealed.