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50% Sales Growth Prediction Should Galvanize Nio Traders

For folks who bought and held shares of Chinese electric-vehicle (EV) maker Nio (NYSE:NIO), 2020 was amazing, but 2021 was a dud. So, how will the next 12 months look for NIO stock?

A Nio (NIO) sign and logo on a tan concrete building.

Source: Sundry Photography / Shutterstock.com

Opinions vary, of course. As we’ll see, one Wall Street analyst is in a decidedly bullish mood, while a famous TV commentator is quite pessimistic.

The final decision on NIO stock is up to you. At the end of the day, the company’s impressive vehicle delivery data should help you to formulate your strategy.

Just maybe, you’ll discover a prime buy-low, sell-high opportunity here. If you truly believe in the EV revolution, then this could be your chance to take a position before the sentiment shifts to the upside.

A Closer Look at NIO Stock

Did you ever imagine that you’d get to buy NIO stock at late-2020 prices? It just goes to show that being patient and waiting for stock prices to come to you (as opposed to chasing them), can be a terrific strategy.

From a technical standpoint, some traders might be wary because the Nio share price crashed in 2021. Momentum-focused investors may also point out that the stock showed lower highs and lower lows that year.

And so, we have the age-old value-versus-momentum debate. Are you ready to catch the proverbial falling knife with NIO stock after it fell 50% from $64 to $32?

Let’s put this into perspective. The Nio share price has a 52-week range of $27.52 to $64.60. Buying a stock near its 52-week low is only recommended when it represents a company with demonstrated growth.

Does NIO stock fit into that category? That’s the billion-dollar question, so let’s refer to the data and see what a couple of financial experts have to say.

Delivering the Numbers

No matter how you slice it, Nio’s most recently issued vehicle delivery update is absolutely outstanding. In December 2021, the automaker delivered 10,489 vehicles. That figure represents a 49.7% year-over-year increase. Furthermore, in the fourth quarter of 2021, Nio delivered 25,034 vehicles. This is a new record-high quarterly delivery for the company and it denotes an increase of 44.3% year-over-year.

In case all of that isn’t enough to convince you, the company also reported 91,429 total vehicle deliveries in 2021, which signifies a whopping 109.1% year-over-year improvement.

It’s likely that Macquarie analyst Erica Chen had those data points in mind when she recently issued an “outperform” rating on NIO stock, along with a price target of $37.70. Macquarie even went so far as to project that Nio’s sales will grow at roughly 50% for the next couple of years.

He Just Doesn’t Like It

Given the aforementioned data points, including Nio’s astounding vehicle delivery performance in 2021, Macquarie’s projection seems ambitious yet realistic.

On the other hand, not everyone is optimistic about Nio. For example, Mad Money host Jim Cramer apparently isn’t in the bull camp at the moment. When asked about Nio as an investable company, Cramer responded, “Nope. Not recommending that. Not recommending any of the Chinese stocks. In particular, I don’t like that stock.”

Judging from Cramer’s pronouncement, it seems as if he’s avoiding China-based companies altogether. I wonder if he has any particular response to Nio’s delivery numbers, though.

Cramer continued, “I just feel like there are people who want to speculate all the time on China. This is a different kind of China than what we’re used to. It is a communist country that does not seem to favor capitalist development anymore.”

Is he suggesting that investors should eschew an entire region for political reasons?

To that, I’d like to invite open-minded traders to consider a “this, too, shall pass” outlook as concerns over China’s policies may be the reason why NIO stock is so attractively priced right now.

The Bottom Line on NIO Stock

It’s your choice as an informed investor to listen to Cramer or not. I’d hate to see people avoid an entire region, though, when there are specific companies worth looking at.

Regardless of critics like Cramer, Nio’s delivery data – along with Macquarie’s sales-growth projection – should put the company’s shareholders in a good mood.

The next year could be amazing, and it would be a shame to miss out on the potential gains. So, in the final analysis, you don’t have to let a grumpy TV commentator determine your outlook on NIO stock.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarketsFinom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets. 

Article printed from InvestorPlace Media, https://investorplace.com/2022/01/50-sales-growth-prediction-should-galvanize-nio-stock-traders/.

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