Electric vehicle (EV) stocks have taken a breather in the last year after generating outsized gains in 2020. For example, shares of China-based EV company Nio (NYSE: NIO) surged from $3.20 at the start of 2020 to a record high of $62 last January. It is currently trading at $19.65, valuing the company at $32.8 billion by market cap.
Despite the volatility, NIO stock has almost doubled investor returns after listing on the NYSE in September 2018. The next major catalyst of its stock price will be the upcoming earnings report, and let's see what you can expect from the electric vehicle giant in Q1.
Nio is scheduled to report its earnings for Q1 of 2022 on Thursday, June 9th at 8:am Eastern Time.
To listen to the call and access the earnings transcript, as well as the shareholder's letter and the company's financial statements for the quarter, all you need to do is go to Nio's investor relations page.
Nio is one of the largest electric vehicle manufacturers in the world. Founded in 2014, Nio designs, develops, manufactures, and sells premium EVs. Its flagship vehicle is the ES8, a seven-seater battery-powered SUV launched in Q4 of 2017. Over the years, the company has introduced several other vehicles, successfully widening its product portfolio and driving revenue growth higher.
Nio has increased sales from $740 million in 2018 to $5.41 billion in 2021. In Q1 of 2022, analysts expect Nio sales to increase by 21% year-over-year to $1.49 billion, while its loss per share is forecast to narrow to $0.13, compared to $0.49 in the year-ago period.
Nio and other manufacturers in China have been impacted by lockdown restrictions imposed in several Chinese provinces in 2022, which has resulted in lower production volumes in Q1. In the first five months of 2022, Nio's vehicle deliveries increased by just 11.8% year-over-year to 37,866 units. Nio confirmed vehicle production is recovering gradually after deliveries were constrained year-to-date.
Nio aims to ramp up production capacity and is closely working with supply chain partners to accelerate vehicle deliveries starting from June. While revenue growth estimates are comparatively lower in Q1, analysts expect sales to rise by 73% to $9.53 billion in 2022. The robust expansion in the top line will allow Nio to narrow losses to $0.54 per share in 2022, compared to losses of $1.02 per share in 2021.
While Nio remains unprofitable, the stock is valued at less than 4x forward sales, which is reasonable for a growth stock part of a rapidly expanding market. China is also the largest EV market globally, and the increase in the purchasing power of the country's workforce will act as tailwinds for Nio in the upcoming decade.
Due to its depressed valuation, NIO stock is trading at a discount of 100% to average analyst price target estimates.
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