A stock forecast provides you insight into different analysts’ sentiments. It offers diverse perspectives about how the stock may perform and enables you to see the reasoning for the forecasts.
A stock forecast serves as a guide about how well the stock may perform, helping you decide market positioning. According to 26 analysts, a 12-month forecast for Nio Inc. (NYSE: NIO) is a low of $33.02 and a high of $87.51. The median forecast is $55.18.
What is NIO?
NIO is a Chinese electric automobile manufacturer. The company designs and develops high-performance electric vehicles (EVs) that incorporate autonomous driving and artificial intelligence.
Headquartered in Beijing, NIO has expanded its operations to Silicon Valley, Oslo, Munich and Oxford, U.K. The company is currently developing an NIO ecosystem for European users in Oslo, Norway.
NIO’s commitment to an environmentally friendly future doesn’t mean abandoning the conveniences and features of gas cars. It offers comprehensive and innovative charging solutions. And it has focused on designing attractive and high-performance vehicles.
Its introduction of the supercar EP9 in 2016 helped position the company as a premium brand. NIO launched the ES8, its first volume car and seven-seater, aluminum-alloy body SUV, in 2017. Since then, the company has manufactured four other models.
NIO’s stride for pioneership in automotive connectivity resulted in the development of NOMI, an AI voice-activated assistant that personalizes the driver’s experience.
Besides offering convenient charging solutions, NIO Houses and mobile applications allow user interactions to develop brand loyalty. NIO owners enjoy free lifetime quality assurance, roadside assistance and connectivity.
NIO competed in the Formula E championships since 2014 and won the Driver’s Championship in 2015. The company plans to start selling vehicles in Germany, The Netherlands, Sweden and Denmark in 2022.
Analyst Ratings for NIO
NIO investors watched the stock price surge from $1.20 in October 2019 to $67.12 in January 2021. That’s just over a 5,500% increase. The stock has been on a downtrend since reaching the all-time high. In January 2022, Nio’s stock price dropped to $19.31.
NIO’s most recent analyst rating: Of the 27 polled analysts, most of them were bullish on NIO. The recommendation ratings were:
- Buy - 23
- Outperform - 2
- Hold - 2
None of the analysts’ sentiments were to sell the stock or that it would underperform.
What is NIO’s price target?: Twenty-six analysts participated in NIO’s 12-month forecast. The lowest forecast was $33.02 with a high of $87.51. The median forecast was $55.18. The price reaching the median would mean an increase of 128% from the current price, $24.12. On Feb. 8, 2022, Barclays reported its target price is $34.
When is NIO’s next rating due?: The last rating was on Feb. 8, 2022. Analysts usually provide four annual ratings per company. The next rating is likely to come out after the Q1 earnings in March or April 2022.
What is NIO’s most recent guidance?: On Nov. 9, 2021, NIO announced its estimated revenue of $1.74 billion for Q4 2021. The minimum revenue that the company expected was $1.46 billion.
Key Statistics for NIO
Source: Benzinga Pro
Investors analyze certain key earnings to determine if a stock is a buy. Benzinga looked at NIO’s yield and the costs it incurred to deliver vehicles.
Earning yield: An earning yield is the earnings per share (EPS) for the recent 12 months divided by the current price per share. In NIO’s case, it’s -4.16%. Its negative yield means that it has lost money and has failed to keep up with inflation.
Gross margin: A company’s gross margin is the net sales minus the cost of goods sold. NIO has a gross margin of 20.33%. The average gross margin for an automobile manufacturer is between 13% and 21%. NIO’s gross margin is on the higher end of that range. Tesla’s gross margin was 28.8% in Q3 2021, but that is exceptional.
Net margin: NIO’s net margin is -29.16%. Net margin is the net profit as a percentage of revenue. NIO’s negative margin means that it incurred a loss. Its negative margin is significantly less than the industry’s average of 7.5%.
Operating Margin: The operating margin is the profit a company makes on a dollar of sales after paying variable production costs. That’s -10.12% for NIO. Its negative operating margin indicates it has spent too much money to produce cars. Its research and development (R&D) costs have steadily increased in the last few years. NIO’s general expenses are also high.
Where to Buy NIO
Related Stocks in the EV Sector
Some EV stocks have dropped more than 30% since reaching an all-time high. Whether now is a good time to invest in the EV sector is debatable, but some stocks have long-term potential.
LiAuto Inc. (NASDAQ: LI): This Chinese company trades in American depository receipts. It has a 57 EPS rating and manufacturers the Li One SUV — hoarding a gasoline engine to charge the battery, extending the travel range. Although a startup, Li Auto has sold more than 136,000 units since its May 2021 debut. Li Auto almost tripled its 2021 sales and plans to expand its product line with a wider range of vehicles. It has managed to increase quarterly revenue with triple digits. But its profits aren’t consistent.
BYD (OTCMKTS: BYDD): BYD is profitable and has an EPS rating of 24. The Chinese manufacturer more than tripled EV sales in 2021. Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK) backs BYD, which started selling the Tang electric SUV in Norway. BYD’s stock rose more than 900% from April 2020 to November 2021. The company plans to increase exports to Australia and Europe during 2022.
Tesla Inc. (NASDAQ: TSLA): Investors who bought Tesla stock in March 2020 watched it surge by more than 1,500% until November 2021. Tesla delivered more than 936,000 vehicles in 2021. That’s almost twice the number of its 2020 deliveries. With the expected release of the Cybertruck in 2023 and the anticipated debut of its Pi phone, Tesla’s revenue trajectory is up. Remember, however, that Elon Musk’s failed purchase of Twitter could become a problem as the company wishes to build larger facilities, yet seems to be prepared to cut back on jobs and hiring.
Frequently Asked Questions
Is NIO a good stock to buy now?
Most analysts polled believe that NIO’s stock price has significant upside potential in the coming 12 months. Some have predicted that it will go as high as $87. Investors who bought into the stock in May 2020 had profited almost 2,000% by January 2021. That represents a significant surge for any market, especially equities.
Since reaching its all-time high, NIO’s stock has fallen 71% to $19.31. To make matters worse, NIO’s net margin is almost -30%. It’s spending large amounts to produce vehicles. NIO’s R&D expenses have significantly increased in the last few years and so have the general expenses.
The R&D expense could be offset in the future when the company’s sales increase as it ventures into new markets and attracts new customers in present ones.
Will NIO come to the U.S.?
NIO’s North American headquarters is in Silicon Valley. Its U.S. headquarters functions primarily as a remove and install center for advanced technology.
NIO used LinkedIn to advertise 46 job posts, targeting specialists in the U.S. Most of the vacancies were for San Jose, California. But one post was for a Seattle position. NIO’s U.S. vacancies included a complete team of software development executives.
Although expanding its U.S. footing, NIO has set its sights first on Europe. It plans to expand vehicle sales to Germany, The Netherlands, Denmark and Sweden.