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NIU Tops Consensus Estimates; Street Says Buy

Shares of Niu Technologies fell 5% in early trade on Monday despite the e-scooter manufacturer reporting Q4 and full-year 2020 financial results that beat analysts’ estimates.

Niu (NIU) reported better-than-expected fourth quarter results driven by a 42% year-on-year increase in e-scooter sales. Revenue of $103 million grew 25% compared to a year ago, beating analysts’ forecasts of $95 million.

Earnings of $0.11 per shares beat consensus estimates of $0.09 but fell slightly from Q4 2019 earnings of $0.12. Gross margins fell to 25.2% compared to 26.1% a year ago as sales of cheaper products saw average revenue per e-scooter fall 11.5% year-on-year.

Meanwhile, full year revenues grew almost 18% year-on-year accompanied with an equivalent drop in revenue per e-scooter.

Commenting on the international business, CEO, Dr. Yan Li, said, “Our international markets sales volume increased by 197% year over year. We are very pleased to see the strong sales growth in the international markets despite the rebound of COVID-19.” (See Niu Technologies stock analysis on TipRanks)

Daiwa analyst Andrew Chung initiated a Buy rating on NIU last week and set his price target at $41.50. This implies upside potential of around 24% from current levels.

Chung referred to NIU as “a premium brand for micro-mobility solutions” and sees the company becoming “a leading e-bike brand in the future.” He expects the company to grow revenue and market share in key markets including the US and Europe.

Consensus among Wall Street analysts is a Strong Buy based on 3 unanimous Buy recommendations. The average analyst price target of $45.17 suggests upside potential of around 42% over the next 12 months.

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