It has been a tough 2024 so far for Nio (NASDAQ:NIO) with shares of the Chinese EV maker shedding 36% since the turn of the year. However, there’s been a bit of relief in the last couple of trading sessions, seeing a 9% uptick, as investors digested the company’s Q4 report.
Taking a closer look at the numbers, Q4 presented a mixed showing. Revenue climbed by 6.5% year-over-year to $2.41 billion, beating the Street’s call by $70 million. The vehicle margin reached 11.9% vs. the 6.8% seen in the same period a year ago and 11% in 3Q23. However, adjusted EPADS of -$0.39 fell short of the consensus estimate by $0.07.
For Q1, the company expects to deliver between 31,000 and 33,000 vehicles. That is some distance below the 50,045 units delivered in Q4, with the downturn partly on account of the Chinese New Year holiday. Yet given the company delivered 10,055 vehicles in January and 8,132 vehicles in February, the figure suggests March deliveries will reach around 14,000. That implies sales are picking up again, and could offer an explanation for the modestly positive reaction.
Moving forward, Morgan Stanley analyst Tim Hsiao thinks the company will need to come good on bringing back volume growth (Nio said it expects returning monthly sales to a run-rate of 20,000 in 2024) for investors to fully get on board again.
“We think it will take more meaningful volume recovery to regain the market’s confidence, especially because the contribution from new models under ALPS won’t kick in till 2H24,” the analyst said. “Rich cash position after recent fund raising should ease market concerns over NIO’s liquidity in the near term, yet we expect investors to still keep a close watch over NIO’s burn rate as well as the potential synergy, if any, across NIO, ALPS (2H24), and Firefly (2025).”
Meanwhile, Hsiao must think Nio can deliver as he keeps a bullish stance, reiterating an Overweight (i.e., Buy) rating backed by a Street-high $13 price target. Investors could be sitting on returns of 89%, should his thesis bear fruit over the next 12 months. (To watch Hsiao’s track record, click here)
Amongst Hsiao’s colleagues, 5 other analysts join him in the bull camp with Buy ratings, 6 recommend to Hold, while 1 says Sell, all coalescing to a Moderate Buy consensus rating. Meanwhile, at $8.04, the average price target makes room for one-year returns of 38%. (See Nio stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
