Chinese EV manufacturer Nio (NYSE:NIO) is scheduled to release its fourth quarter Fiscal 2023 earnings results on March 5, before the market opens. Despite the slowdown in EV demand, the company reported increased deliveries during the fourth quarter, which might have supported its top-line growth.
Nio delivered 50,045 vehicles in the fourth quarter, surpassing the upper end of its guidance range of 47,000 to 49,000 units. Furthermore, deliveries increased 25% year-over-year. However, Nio’s move to increase the number of battery-swapping stations and price-cutting pressures may have negatively impacted its margins during the quarter.
NIO – Q4 Expectations
Wall Street expects Nio to report sales of $2.52 billion in Q4, up 8% year-over-year. Higher vehicle deliveries are expected to have aided its revenue growth in the fourth quarter.
Turning to earnings expectations, Wall Street analysts expect the company to post a loss of $0.33 a share, compared with a loss of $0.43 in the year-ago quarter.
Analysts’ Opinions
Ahead of the Q4 results, J.P. Morgan analyst Nick Lai downgraded Nio stock’s rating to Sell from Hold and lowered his price target to $5 from $8.50. The analyst remains concerned regarding the potential for sluggish sales growth in the near term due to a lack of sufficient new model launches by the company.
On the other hand, analyst Ji Shi from CMB International Securities reiterated a Buy rating on NIO stock, with a price target of $6.80. The analyst expects the company’s less aggressive discount strategy and lower battery costs to support the expansion of gross margin in the quarters ahead. Importantly, Shi projects a narrower loss in Q4 compared to past quarters.
What Is the Future Price of NIO Stock?
Overall, Wall Street is cautiously optimistic about NIO. The stock has a Moderate Buy consensus rating based on six Buys, three Holds, and one Sell rating assigned in the past three months. The average Nio stock price target of $10.03 implies a 73.53% upside potential. The stock is down 47% over the past six months.
Insights from Options Trading Activity
Options traders are pricing in a +/- 14.01% move on earnings, much greater than the previous quarter’s earnings-related move of 1.5%.
The anticipated earnings move is determined by computing the at-the-money straddle of the options closest to the expiration after the earnings announcement.
Learn more about TipRanks’ Options tool here.
Concluding Thoughts
Nio’s plans to enter the lower-cost vehicle market and expand battery-swapping stations bode well for its long-term growth. However, the impact of macro headwinds on consumer spending and increased competition remain key concerns.
