Nio (NYSE:NIO) will hold a board meeting Feb. 28 to go over quarterly results “among other things.” Investors in NIO stock are speculating on what those things may be. The earnings will be reported March 1.
Nio shares are up nearly 8% so far in 2023 as hopes rise for China’s reopening and for exports of electric cars to Europe. Nio opened Feb. 16 at $10.43 per share with a market capitalization of $17.5 billion.
Growth Track
The recent rise of Tesla (NASDAQ:TSLA), which is up nearly 70% after beating estimates on its most recent quarter, has helped direct Chinese competitors like Nio. A rising Chinese Yuan and a unique system of “battery swaps,” which maintain the cars’ range and take just a half hour, have also helped spur interest.
Tesla is once again valued at 8 times last year’s revenue while Nio is valued at less than 3 times revenue. The difference is Tesla has earnings while Nio, so far, has none. But bulls expect earnings to arrive as Nio scales production, as it has promised to do in 2023.
So far that hasn’t happened. Nio sales were down for January, especially in the crossover and SUV segment where it thrives. The company recently said it delivered 8,506 cars during the month. Nio has promised to deliver three new models in that niche starting in June. Tesla’s price cuts, which succeeded in raising sales but cut into profit margins, may also be impacting the company.
Bulls insist Nio hasn’t been this cheap in years and that, with eight models for sale throughout China by the middle of 2023, it won’t remain cheap much longer. Bears, like our Louis Navellier, question whether Nio can easily sell all the cars it’s expected to produce.
What Happens Next for NIO Stock?
Nio has become a battleground stock, closely contested between buyers and sellers. The March 1 results will be a catalyst for one side or the other.
On the date of publication, Dana Blankenhorn 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.
