In just a few hours, investors all over the world will be closely watching Nio (NYSE:NIO). Why? Well, the red-hot Chinese electric vehicle company is about to report its third-quarter earnings. After weeks of rallies, big headlines and stock market enthusiasm, a lot is on the line. So what is the potential for NIO stock? And why should investors be excited about the upcoming Q3 report?
Before we dive into the specifics, investors should know that Nio will share its results at 7:00 p.m. Eastern. InvestorPlace will also be going to live to interpret the facts and figures in real time.
For now though, these are 10 reasons you should be excited about NIO stock ahead of earnings.
- NIO stock has already had an amazing year, posting year-to-date gains that exceed 1,000%.
- Importantly, these gains have come from growth, delivery improvements and new investor enthusiasm. That could continue tonight.
- Li Auto (NASDAQ:LI) and Xpeng (NYSE:XPEV) have already reported their Q3 numbers. Both stocks rallied in the wake of the results.
- Similarly, all three companies have reported October delivery numbers.
- Nio reported 5,055 deliveries in October, which set a new monthly record.
- Additionally, the company has been making some big advancements on the battery front. It has ramped up its battery-as-a-service offerings and battery-swapping initiatives.
- On that note, Nio also hosted a 100 kWh shareholder event earlier in November. There, the company unveiled a new 100 kilowatt hour battery system.
- Because of these advancements, Wall Street has been increasingly bullish on NIO stock.
- Deutsche Bank analyst Edison Yu said he expects record revenue and profitability tonight. Because of this, he will consider adjusting his $34 price target after the event.
- Many investors are also eyeing NIO stock in the wake of a short-seller report from Citron Research.
The Pressure Is On for NIO Stock
Chinese electric vehicle stocks have simply been hot in recent weeks. Investors know that China is the largest automotive market, and therefore industry leaders like Nio have big potential there. Importantly, Nio is showing it can capitalize on that, such as through reporting record monthly deliveries. There have also been additional catalysts such as its 100 kWh battery and its battery-swapping initiatives.
However, the stakes are rather high tonight. The average 12-month price target on shares comes in at $31.74, which implies more than 30% downside. Additionally, the Citron Research report makes bold claims. After Citron set its $25 price target last week, investors have been hoping that the Q3 report will prove Andrew Left wrong. Can Nio deliver on that tonight?
There is one more thing to watch. Citron Research claims that one of the reasons Nio is headed to $25 is due to the presence and competitive pricing of Tesla (NASDAQ:TSLA) in China. To be fair, Tesla is ramping up its presence in the Chinese market thanks to its Gigafactory in Shanghai. Will Tesla outperform Nio in its home market? And will investor enthusiasm over Tesla now that it is joining the S&P 500 overshadow Nio? Those are all things for investors to watch tonight.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer for InvestorPlace.com.