The verdict is in: Chinese electric vehicle (EV) maker Nio (NYSE:NIO) is definitely in turnaround mode. The same thing could be said about NIO stock, which many months ago was at risk of going to zero.
Hardly anyone talks about the share price going to zero nowadays. That’s because NIO has cleared a number of technical hurdles on the way to higher price points.
Yet, it’s also because Nio is doing well as a fast-growing business. Despite the Covid-19 pandemic and a semiconductor shortage, the company continues to impress investors with positive data surprises.
So, could more surprises be in store? Newly planned vehicle releases and recently reported data suggest that Nio may be on the way to bigger and better things.
NIO Stock at a Glance
It feels like ages ago now, but in March of 2020, NIO stock shares could be purchased for less than $5.
Those were dark times for the company and its stakeholders. However, the buyers showed up in full force in late 2020, sending the share price past the $50 level in the winter.
That momentum continued into 2021, but soon NIO stock started to run out of gas. Specifically, the stock hit a resistance point of around $62 twice in January — and then once again in February.
Starting in mid-February, the price action became bearish and choppy. Buyers attempted a rally back to $60 in June, but unfortunately they were rejected.
As of Aug. 30, NIO stock has settled at around $38 or so. In the long term, though, $60 will be a reasonable price target. That’s because buyers have hit that level several times already.
Chances are, the bulls won’t be rejected forever. With that in mind, let’s see what’s new and exciting with NIO stock — and what could be the next catalyst for a run-up in the price.
New Cars for a New Year
If you thought that 2021 was a fascinating year to be invested in NIO stock, well, 2022 could actually leave it in the dust.
Specifically, CEO William Li provided Nio fans with a shot in the arm on Aug. 12 when he revealed that the company plans to deliver not just one but three new car models next year.
We don’t have a lot of specific details about these new vehicle models, unfortunately. But that’s not necessarily a bad thing. The mystery could help to build up anticipation.
In the meantime, what we do know is that Nio will finally deliver its first sedan model — the ET7 — in 2022. It has also been confirmed that Nio is “expanding its production base” in China’s Hefei city. Finally, the automaker has also launched a branch in Norway.
In any case, it’s a big step — and probably a necessary one — for Nio to foray into the EV sedan market with its ET7 model.
Closing the Gap
When it comes to Nio’s earnings losses, that’s a gap which the company undoubtedly wants to narrow and eventually close completely. Thankfully, though, the second-quarter 2021 data shows that it is making progress in this area.
In terms of earnings per share (EPS), the company posted a quarterly loss of 7 cents. That might sound negative, but it’s actually a positive result on a relative basis. In the year-ago quarter, Nio reported a per-share earnings loss of 16 cents.
Moreover, the data only gets better from there. For Q2 2021, Nio posted revenues of $1.31 million, marking a 127% year-over-year (YOY) improvement.
Not only that, but Nio also managed to deliver a total of 21,896 vehicles during the second quarter of 2021. That figure represents a nearly 112% increase on a YOY basis — another huge win for NIO stock.
The Takeaway on NIO Stock
NIO stock investors should hope that the company’s per-share earnings losses will diminish soon. In time, those losses could turn into gains. Looking at the data, though, perhaps it won’t be very long before that happens.
It will also be interesting to see Nio’s three new vehicle models hit the road next year. That will mark yet another achievement for the EV maker.
All told, this company is undeniably in comeback mode.
On the date of publication, Louis Navellier had a long position in NIO. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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