Can Nio Deliver In Q3 Amid Investors Expectations For an Inflection Higher - NIO (NYSE:NIO)

Chinese EV startup Nio, Inc.'s NIO September quarter performance was mixed, at least from the deliveries perspective. As the company rolls up its sleeves to release its quarterly scorecard, here is a look at what can be expected.

Nio's Earnings Date: The company is scheduled to report its fiscal-year third-quarter results Tuesday, after the market close. This will be followed by the earnings call, which is scheduled for 8 pm.

A webcast of the earnings call can be accessed by clicking here.

Q3 Expectations For Nio: Analysts, on average, expect the company to report a non-GAAP loss of 9 cents per share, narrower than the year-ago loss of 15 cents per share and the previous quarter's loss of 11 cents per share.

Revenues are estimated at $1.46 billion, up 109% from the year-ago revenues of $696.03 million. In the second-quarter, the company reported revenues of $1.3084 billion.

The company's guidance issued in mid-August calls for revenues of $1.3804 billion to $1.4917 billion.

Nio delivered 24,439 vehicles during the third quarter compared to 21,896 vehicles in the second quarter. Vehicle sales accounted for roughly 94% of the total sales in the second quarter.

Chip Shortage Hurts Sales: Nio started the quarter with fairly strong deliveries for July. The company's deliveries more than doubled year-over-year to 7,931 vehicles in July. Deliveries dipped to 5,880 vehicles in August, with the company attributing the softness to supply chain disruptions. Nio also trimmed its deliveries forecast for the quarter from a range of 23,000-25,000 units to a range of 22,500-23,500 units, calling the updated forecast a more prudent one.

The company came back up with a bang in September and delivered 10,628 vehicles, representing a 125.7% year-over-year increase.

Other Key Focus Points: Apart from the headline numbers, investors may be interested in checking out if vehicle margin and overall margins are on an upward trajectory. Vehicle margin was at 20.3% in the second quarter.

The company's cash reserves may also attract attention, as it increases investment toward overseas expansion and adds to its product models.

Nio ended the second-quarter with cash, cash equivalents, restricted cash and short-term investments of $7.5 billion. In early September, the company announced an at-the-market equity offering of $2 billion ADSs, each representing one Class A common stock.

On the earnings call, Nio is expected to shed light on how its Norwegian expansion is coming along. The company has already begun delivering its ES8s in the country.

Investors may be keen to know from CEO William Li whether the company is contemplating to expand into other European countries, especially Germany and the U.K.

The timeline for a Hong Kong listing, Nio Day 2021 announcements, and the ET7 launch schedule could also be of interest to investors.

Nio Stock Is Stuck: Nio shares have underperformed EV giant Tesla, Inc. TSLA, one of its key competitors in the Chinese market.

Year-to-date, Nio shares are down about 12%, while Tesla is up about 73%. In comparison, domestic peers XPeng, Inc. XPEV and Li Auto, Inc. LI are up 8.3% and 7.5%, respectively.

Deutsche Bank analyst Edison Yu said in a recent note that be expects two or three upcoming catalysts that can change the narrative on Nio stock.

The fourth-quarter deliveries guidance is expected to show a "large-step" improvement in delivery recovery for November and December, Yu said. The analyst also expects the Nio Day 2021, scheduled to be held on Dec. 18, to serve as a potent catalyst, given expectations the company will announce new models and technologies at the event.

Yu recently raised his price target for Nio shares from $60 to $70, while reiterating a Buy rating.

Nio closed Friday's session down 1.92% at $42.29.

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