Why Is Nio (NIO) Stock Down Today?


Shares of Nio (NYSE:NIO) are in the red this morning after the company reported a mixed Q4 earnings report. The Chinese electric vehicle (EV) company has had a rough 2022 so far. From delisting concerns to supply chain issues, macroeconomic fears have caused NIO stock to fall by more than 35% year-to-date. Now, let’s jump into the details on the company’s latest earnings.

NIO ES6 electric SUV semi-autonomous car on display near Chinese automobile manufacturer NIO software development office in Silicon Valley
Source: Michael Vi / Shutterstock.com

Did Nio Beat Earnings?

While Nio beat on revenue and deliveries, revenue and delivery guidance for Q1 overshadowed the company’s earnings. For Q4, Nio brought in revenue of $1.55 billion, up 49% year-over-year (YOY) and beating analyst expectations of $1.52 billion. Of the $1.55 billion, $1.44 billion was attributable to vehicle sales. The company also reported a vehicle margin of 20.9%, up from 17.2% YOY.

In addition, deliveries during the quarter came in at 25,034 vehicles, up 44% YOY and beating analyst expectations of 24,945 vehicles. Q4 deliveries also were on the high range of Nio’s internal Q4 guidance of between 23,500 and 25,500 vehicles. Nio’s most popular vehicle during the quarter was the ES6, which sold 12,180 units. In terms of profitability, Nio reported an earnings per share loss of 16 cents, which was in line with analyst estimates. Furthermore, the company reported a loss of $383.7 million, which increased by 162.5% YOY.

However, guidance may be the main reason that shares are trading lower today. The EV company expects to deliver between 25,000 and 26,000 vehicles during Q1. That estimate was below the analyst estimate of 27,958 vehicles. Furthermore, Nio estimates that Q1 revenue will come in between $1.51 billion and $1.57 billion, falling short of the estimate of $1.66 billion.

Nio CEO William Li explained one of the reasons why the company’s Q1 internal guidance missed estimates, “In light of the seasonality and the Chinese New Year holiday, NIO delivered 9,652 vehicles in January and 6,131 vehicles in February, representing a growth of 34% and 10% year-over-year, respectively.”

What’s Next For NIO Stock?

Li expects 2022 to be a “year of reacceleration for NIO.” The EV manufacturer plans on introducing three new products that will utilize the Nio Technology Platform 2.0 this year.

Nio will start delivering its ET7 starting on March 28. Additionally, Nio estimates that deliveries of the ET5 will start this September. Finally, Li stated that Nio will “plan to offer our products and services in more countries and regions in 2022.”

On the date of publication, Eddie Pan did not hold (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.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

Article printed from InvestorPlace Media, https://investorplace.com/2022/03/why-is-nio-nio-stock-down-today-2/.

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