After losing about 71% of its value from the 52-week high of $16.18 and declining over the past month, Nio (NYSE:NIO) stock got a new life on April 9. Shares of the Chinese EV (electric vehicle) maker closed about 7.8% higher. However, it will be too soon to judge whether the stock will continue to rise, especially as the electric vehicle (EV) market is witnessing soft demand and heightened competition.
Notably, Nio delivered 11,866 vehicles in March 2024, up 14.3% year-over-year. However, it delivered 30,053 vehicles in Q1, down about 3.2% year-over-year. This year-over-year decline shows weakness in demand across the sector. Notably, EV titan Tesla (NASDAQ:TSLA) also announced weaker-than-expected Q1 delivery numbers. Given the underperformance, TSLA is among the top losers in the S&P 500 (SPX).
Analyst’s Opinion
Dampening sentiments, Barclays analyst Jiong Shao downgraded Nio stock to Sell from Hold on April 2. Shao also revised the price target downward from $5 to $4. The analyst expressed concerns regarding the sluggish sales of Nio’s latest models. Shao noted that Nio is facing difficulties in selling the 2024 models launched in March, which could impact the company’s ability to meet consensus estimates for the year. Additionally, Shao highlighted the limited upcoming product launches for the remainder of 2024, posing further challenges.
Is Nio a Buy or Sell?
Nio stock is trading in penny-stock (learn more about penny stocks here) territory. A slowdown in demand and increased competition could restrict the rebound in NIO stock.
It has seven Buy, seven Hold, and two Sell recommendations for a Moderate Buy consensus rating. Analysts’ average price target on NIO stock is $6.92, implying an upside potential of 46.92% from current levels.
