Nio (NIO) Stock Slumps 5.5% on Lower Q1 Guidance, What’s Next?

Trade NIO Stock Your Capital Is At Risk
Ollie Martin
Updated: 25 Mar 2022

Key points:

  • NIO stock sunk 7% premarket on Q1 projections that fell slightly short of expectations
  • Nio reported an adjusted loss of $0.16, revenue of $1.55B and deliveries totalling 25,034
  • Vehicle delivieres have still increased 109.1% year-over-year

Once known as the ‘Chinese Tesla’, Nio has been a favorite EV manufacturer since China really began to pick up the pace of its production. Since then, the company’s growth has stammered in the face of rising competition and supply chain disruptions weighing on production deadlines. The company released Q4 earnings on Thursday, and although Nio beat Wall Street expectations for revenue and deliveries, shares dropped around 5% postmarket as Nio announced slightly lower projections that were expected by analysts. 

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The company reported an adjusted loss of $0.16, hitting expectations of $0.16. Revenue came in just above predictions at $1.55B over $1.52B, and total vehicle deliveries came in at 25,034, narrowly beating the Wall Street expectation of 24,945. However, future projections normally carry more insight for investors.

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Outlook is critical for maintaining bullish faith, especially at such a time of economic uncertainty. Nio forecasted a Q122 revenue of between $1.51B and $1.57B, short of the expected $1.66B. Similarly, the company’s delivery guidance fell short of the 27,958 expected, forecasting between 25,000 and 26,000.

Despite the small miss on outlook, Nio founder and CEO William Bin Li stands by the company’s achievements in the face of unprecedented logistical difficulty:

“We concluded the year of 2021 on a strong note with an annual delivery of 91,429 vehicles in total, representing an increase of 109.1% year-over-year, despite all the challenges including the supply chain volatilities in particular” 

Shares of Nio stock are currently trading 7% lower than Thursday’s closing price. The projection miss isn’t a serious problem for Nio; we are used to seeing much stronger volatility off even less news, meaning that maybe Nio is starting to cement itself as a reputable investment rather than a speculative EV play. Earlier this week Deutsche Bank analyst Stephen Yu argued that Nio’s ET5 and ET7 might be the most desired car in China this year. It’s all to play for in 2022, and Nio still looks very well positioned. 

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