NIO Stock Alert: Why Did Nio Just Hit a New 52-Week Low?
One month into 2022, the electric vehicle (EV) race is off to a slow start. Industry leader Tesla (NASDAQ:TSLA) has spent the month battling turbulence, but for some, the outlook is worse. Chinese EV producer Nio (NYSE:NIO) began last year on an extremely high note, with prices in January 2021 close to $60 per share. Today, NIO stock has shed almost two-thirds of its value. As of this writing, it is trading at just over $23. For a company that was hailed as a breakout stock for most of 2021, these types of declines raise some questions. Let’s take a look at how this company has fallen so far.
What’s Happening With NIO Stock
Today represents the lowest price that NIO stock has hit since October 2020, when share prices dipped to $21. Three months later, they would reach an all-time high of $62.84. As MarketWatch reports, this three-day losing streak has cost NIO more than 19% so far. On a worse note, the company’s American Depository Receipts (ADRs) have fallen 62% from the stock’s all-time high closing price.
The good news is that NIO stock has only fallen 0.25% so far today. That loss isn’t too severe on its own, but NIO has already fallen more than 19% for the week and almost 21% for the month. However, the past six months illustrate just how NIO stock has fallen. This former EV race contender has lost 45% since July 2021.
Why It Matters
Things have been fairly mixed for Chinese EV stocks today. Nio’s two primary peers are trading differently. XPeng (NYSE:XPEV) has fallen by 0.25% today in a pattern that closely mimics what we’ve seen from Nio. Li Auto (NASDAQ:LI), on the other hand, is up 0.16%. Meanwhile, in the U.S., Rivian (NASDAQ:RIVN) has also shaken its tough month and is back in the green today. It seems to be moving in solidarity with Tesla stock, which is riding high on the momentum generated by its pre-earnings call buzz.
“With the S&P 500 and Nasdaq 100 both down more than 3% today, Nio has not been able to escape the carnage,” InvestorPlace’s Eddie Pan reported yesterday. His assessment is certainly correct. Investor confidence in NIO stock has been low since the year began. Even the announcement of an expansion into European markets hasn’t helped bolster the stock. As Pan also reports, though, NIO stock price predictions remain generally bullish, with analysts maintaining fairly high price targets.
These analysts aren’t the only ones remaining optimistic. InvestorPlace’s Vandita Jadeja recently touted NIO’s declines as a buy-the-dip opportunity. Fellow contributor Ian Cooper took a similar position, citing positive delivery statistics and potential for earnings momentum as likely stock-boosting catalysts for the year ahead. To his way of thinking, NIO could easily reach $44.27 if this type of momentum takes hold.
Why It Matters
NIO stock’s recent performance is clearly a good news/bad news type of scenario. The recent numbers have been disappointing. But as Cooper reminds us, it’s important to focus on the road ahead. Nio will have plenty of chances to regain the momentum it lost in recent months. The primary question is, how long will it take?
In any event, the catalysts of which Cooper speaks shouldn’t be ignored. EV demand is still growing, and Nio is working to gain a foothold in a new international market. There’s plenty of reason to believe that NIO stock could once again take off in 2022.
On the date of publication, Samuel O’Brient 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.