I’ve been a fan of Nio (NYSE:NIO) stock for quite some time.
In fact, the first time I said it was a buy was on July 23, 2020, as it traded around $12 a share. From there, the EV stock would hit a high of $63.23 before pulling back to just under $25.
It was butchered. However, I wouldn’t write the stock off just yet.
For me, I’m still just as bullish as I was in July 2020.
We have to remember that governments all over the world want millions of electric vehicles on the roads. President Joe Biden, for example, wants electric vehicles to make up about 50% of all new vehicle sales over the next decade, as I noted on Oct. 18.
Consumer demand for electric vehicles is accelerating. In fact, according to an article on Axios, “Global sales of electric passenger vehicles are projected to surpass 10.5 million this year, about 4 million above 2021 levels, as the tech grows more mainstream, the research firm BloombergNEF said in a new report.”
Major auto companies are racing to develop new EV fleets, such as General Motors (NYSE:GM), Ford Motor Company (NYSE:F), Toyota (NYSE:TM) and Honda Motor Co. (NYSE:HMC) to name a few.
Plus, EV companies like Nio are still seeing strong deliveries, earnings, and catalysts. It also doesn’t hurt that analysts love the Nio stock.
Yes, sure, the NIO stock is down in the dumps at the moment. However, don’t write it off just yet. With the EV boom only set to accelerate, the stock could challenge $30, even $35 again in the near term.
Nio Deliveries Are Still Impressive
The company also has a good history of EV deliveries and earnings.
In January, it delivered another 9,652 vehicles – 33.6% growth from a year ago. In December, deliveries were up 49.7% to 10,489. For the fourth quarter, deliveries soared 44.3% from last year to 25,034. That’s not bad at all.
Then, for the full year, Nio deliveries were up just over 109% to 91,429. Even more impressive, that number quadrupled since 2019.
I only expect for numbers to improve as we get into 2022.
As noted in a company news release, “In 2022, NIO will begin delivering three vehicle models developed on the NT2.0. NIO’s second factory which is located in the NeoPark will be put into operation from the third quarter. Worldwide, NIO will bring its products and comprehensive service experience to Germany, the Netherlands, Sweden and Denmark.”
Analysts Still Love the Electric Vehicle Stock
Macquarie analyst Erica Chen just initiated coverage of Nio with an outperform rating. She also has a price target of $37.70 a share, and forecast 52% annual revenue growth for Nio through 2024, as noted by TheFly.
Better, Deutsche Bank analyst Edison Yu believes the Nio stock can double for a few reasons.
One, he expects for deliveries of the company’s ET7 sedan will being in March 2022. He also believes the sedan could see 30,000 deliveries in 2022, and potentially double that by 2023, as highlighted by TipRanks. In addition, the analyst says Nio could unveil its sixth model this year.
Based on those catalysts, Edison Yu has a buy rating on the stock with a price target of $70.
The Bottom Line on Nio Stock
What’s not to like about Nio?
It’s oversold. Delivery numbers and earnings growth continues to impress. Global leaders want millions of EVs on the roads. Major automakers are shifting to all-electric vehicles. Consumer demand for electric vehicles is on the rise. We also have to consider that electric vehicles will be a major part of a greener future.
At current prices, I’d use weakness in Nio as an opportunity. I’d buy it, forget about it, and check back on it in a few months.
On the date of publication, Ian Cooper 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.
Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.
