Nio stock price has remained under pressure this year and is underperforming other Chinese EV companies like Li Auto and Xpeng. It has dropped by 17.4% this year and by 23.7% in the last 12 months. Nio has plunged by over 34% from its highest point this year.
Wall Street sees a 33% Nio stock price surge
Wall Street analysts have a mixed opinion about Nio share price. Barclays maintains an underweight outlook, while Mizuho and JPMorgan have a neutral forecast. In a note, Nick Lai, a JPMorgan analyst, lowered his estimate for the stock from $7 to $4.70, citing its challenges in meeting targets.
Macquarie analysts downgraded the stock from outperform to neutral, while Citigroup has a buy rating. The average Nio stock price forecast is $4.78, up by 33% from the current level.
Nio attracts a mixed outlook because of the growing competition in China’s EV industry and its soaring losses. They have also cited its inability to meet targets, substantial losses, and the fact that its business model may be disrupted by the new faster charging batteries.
Read more: Here’s why the Nio stock price dropped in Hong Kong
Growth continues, but losses remain
Nio stock price has crashed despite its results showing that its business was growing. The most recent numbers showed that its first quarter deliveries rose to 42,094, up from 30,053 in the same period last year. These deliveries were much lower than the 72,690 it sold in the fourth quarter because of seasonality.
The results showed that vehicle sales jumped by 18.6% YoY to $1.36 billion, while its gross margin was 10.2%. This margin improved from 9.2% in the first quarter last year, but it was a disappointment from 13.1% in Q4.
Including other businesses, Nio’s total sales rose by 21% to $1.65 billion. As it has done in the past, the company’s loss from operations stood at over $884 million, a 19% increase from the same period last year. The net loss jumped by 30%.
These numbers mean that the company may be forced to raise more money either this year or in 2025. It raised HK4 billion by selling its shares, a move that diluted existing shareholders.
Data shows that Nio’s outstanding shares jumped to 1.942 billion, up from 1.5 billion in 2023. This increase means that Nio investors have continued to make less money per share. The annual EPS dropped to minus $1.532 from minus $0.68.
Nio stock is facing other challenges, with the main one being the ongoing price wars in China. BYD has slashed prices this year as it seeks to gain market share. This, in turn, may push Nio and other companies to slash prices, which may affect its margins.
Nio stock price technical analysis
Nio stock chart | Source: TradingView
The weekly chart shows that the Nio share price has remained in a tight range in the past few months. On the positive side, the stock has formed a falling wedge pattern, characterized by two descending and converging trendlines. The two lines are about to converge with each other.
The MACD indicator is about to cross the neutral level. Also, the Relative Strength Index has formed a bullish divergence pattern.
Therefore, the stock may bounce back, and possibly reach a high of $5, up by about 30% from the current level. A move below the support at $2.70 will invalidate the bullish view.
Read more: Nio stock price could enter beast mode, thanks to these catalysts
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