NIO: Oversold Despite Promising Execution - Speculative Buy
Summary
- NIO continues to report growing deliveries in FQ2'24 and early July 2024, implying that the price cuts have worked as intended in boosting sales.
- With its sales figures almost exceeding TSLA's growth rates and the management already looking to launch mass market models, we believe that we may see 2025 bring forth improved numbers.
- While NIO is likely to remain unprofitable and further dilutive cash raises are likely in the near-term, we believe that the worst may already be behind it.
- The stock remains attractively valued compared to its EV peers given the robust double digit growth rates, offering investors an excellent margin of safety.
- It goes without saying that NIO is likely to remain volatile in the intermediate term, with the stock highly shorted and sentiments surrounding EVs/ Chinese ADRs still mixed.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of TSLA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
The analysis is provided exclusively for informational purposes and should not be considered professional investment advice. Before investing, please conduct personal in-depth research and utmost due diligence, as there are many risks associated with the trade, including capital loss.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.