- Nio (NIO) stock has solid fundamentals.
- The dip is a buying opportunity.
- Delisting worries are short term for NIO stock.
Shares of Chinese electric vehicle maker Nio (NYSE:NIO) have been moving in reverse gear since the beginning of 2022. NIO stock has lost more than 60% of its value and is suffering from supply-chain issues and major sell-off pressure. We have also seen a dip in the deliveries due to the China lockdown and it will have an impact on the revenue numbers when the company reports the first-quarter results.
With the stock significantly down from its 52-week high, I believe now is the time to charge. Let’s take a look at three reasons to add NIO stock to your portfolio.
| NIO | Nio | $15.83 |
Singapore Listing for NIO Stock
NIO stock has been under pressure due to the delisting fears but the company did not waste any time and provided some relief there. It reported that it will list the shares on the Singapore Exchange (SGX) from May 20. These shares will be equivalent to American Depositary Shares (ADSs) and this gives investors an alternative to trade shares even if they are delisted from the NYSE and U.S. stock markets.
A Mass-Market Sub-Brand
A solid reason to look forward to Nio is the company’s upcoming mass-market vehicle. Reports have come out that the company will soon launch the much-awaited mass-market vehicle. It will be a sub-brand and will be manufactured at the Hefei manufacturing plant and the production could begin in 2024. The company hasn’t made an official announcement yet but looking at the expansion plans of the Hefei plant, it could soon be a reality.
Once the company makes an official announcement, NIO stock could pick up.
Optimism Around First Quarter Results
For the previous quarter, the company gave mixed earnings. It beat estimates but missed the revenue guidance. However, the earnings were better than expected. For the first quarter, Nio expects revenue to come between $1.51 billion and $1.52 billion and the deliveries for the quarter between 25,000 and 26,000 vehicles. For the first quarter, the company reported deliveries of 25,768 despite the supply-chain issues. The delivery numbers are in line with the projection and as long as these numbers continue to grow, Nio will thrive.
That said, the company also hit 500 total deliveries in Norway, which is a huge milestone. The company entered Norway in May last year and despite it not being a huge market, it did make a mark with deliveries.
What Should You Do With NIO Stock?
NIO stock is a long-term EV play and should be a part of your portfolio. The stock has suffered due to the dip in deliveries and delisting concerns but it has been punished more than it deserved to be.
Nio stock has a solid potential to double in the coming months and every dip is a chance to buy. Even if you do not consider the European market, the stock has a lot of growth potential. If the company beats expectations and reports strong top-line and bottom-line numbers, we will see the stock moving. It should also be noted that the stock has suffered due to the lockdowns in China and supply-chain issues.
If the company delivers strong numbers and issues a positive guideline for the quarter, NIO stock will move higher.
On the date of publication, Vandita Jadeja 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.
