Should you buy Nio stock? (June 2023)
- 7 months ago
Nio stock analysis. NIO stock.
Discover under-the-radar stocks: https://www.overlookedalpha.com
Electric vehicle maker Nio has a market cap of 14.7 billion dollars. With 4.8 billion of cash and 3.7 billion of debt, the enterprise value is 13.6 billion. The company has delivered 127,000 vehicles over the last 12 months and generated 7.3 billion dollars of revenue. However, Nio is not profitable. The company lost 2.5 billion dollars over the past 12 months with an average gross margin of 7.8%.
Nio makes good cars but before we go any further we have to discuss Nio’s first quarter earnings. As you can see, first quarter revenue at Nio was up 7.7% to 1.6 billion and the company delivered just over 31000 vehicles.
But this number was below target and revenue was in fact down a third from the previous quarter.
More importantly, Nio barely made any profit in the first quarter. Gross profit in Q1 collapsed 89% and the company lost 744 million dollars. That's a 133% increase year over year. The gross margin was only 1.5% versus almost 15% year over year.
So what’s going on? Well, Nio’s production costs have increased but the company isn’t selling enough cars. And the company can no longer rely on government subsidies.
The ET5 is arguably Nio’s most important car but according to the Electric Viking, preorder times for the ET5 have gone from 3 months to just two weeks. That suggests decreasing demand.
Meanwhile, the company has been burning cash on battery swapping stations and implementing its auto driving stack.
Despite this bad news, Nio stock is actually up 18% since it reported earnings. And that’s because Nio has finally recognised the trouble it’s in. Management is cutting back on R and D and its cutting prices on its cars. Its ending its free battery-swapping service and it will soon be selling its cars across Europe and later the US.
And Nio really needs to do this. Because at the current burn rate, the company could run out of cash within the next two years.
#niostockanalysis #niostockanalysistoday #stocks #investing
Discover under-the-radar stocks: https://www.overlookedalpha.com
Electric vehicle maker Nio has a market cap of 14.7 billion dollars. With 4.8 billion of cash and 3.7 billion of debt, the enterprise value is 13.6 billion. The company has delivered 127,000 vehicles over the last 12 months and generated 7.3 billion dollars of revenue. However, Nio is not profitable. The company lost 2.5 billion dollars over the past 12 months with an average gross margin of 7.8%.
Nio makes good cars but before we go any further we have to discuss Nio’s first quarter earnings. As you can see, first quarter revenue at Nio was up 7.7% to 1.6 billion and the company delivered just over 31000 vehicles.
But this number was below target and revenue was in fact down a third from the previous quarter.
More importantly, Nio barely made any profit in the first quarter. Gross profit in Q1 collapsed 89% and the company lost 744 million dollars. That's a 133% increase year over year. The gross margin was only 1.5% versus almost 15% year over year.
So what’s going on? Well, Nio’s production costs have increased but the company isn’t selling enough cars. And the company can no longer rely on government subsidies.
The ET5 is arguably Nio’s most important car but according to the Electric Viking, preorder times for the ET5 have gone from 3 months to just two weeks. That suggests decreasing demand.
Meanwhile, the company has been burning cash on battery swapping stations and implementing its auto driving stack.
Despite this bad news, Nio stock is actually up 18% since it reported earnings. And that’s because Nio has finally recognised the trouble it’s in. Management is cutting back on R and D and its cutting prices on its cars. Its ending its free battery-swapping service and it will soon be selling its cars across Europe and later the US.
And Nio really needs to do this. Because at the current burn rate, the company could run out of cash within the next two years.
#niostockanalysis #niostockanalysistoday #stocks #investing