NIO: No Need To Buy More Before Q2 Release

(9min)

Summary

  • I'm downgrading NIO to a 'Hold' rating due to a weakening long-term bullish thesis and uncertainty ahead of the September 5th earnings report.
  • NIO's deliveries have declined for two consecutive months, struggling against intense competition in the Chinese auto market, impacting its market share.
  • Despite improved margins and a strong liquidity position, NIO's future profitability remains a concern, with the potential for further investment needed by 2025.
  • Market expectations for NIO's Q2 EPS and sales seem to be too optimistic. I doubt NIO can meet these forecasts given current industry dynamics.
  • Looking for a helping hand in the market? Members of Beyond the Wall Investing get exclusive ideas and guidance to navigate any climate. Learn More »
NIO logo and the Nio"s user center, NIO House

Andy Feng

My Thesis Update

I wrote my 1st article about NIO Inc. (NYSE:NIO) stock in mid-January 2024 and then updated my bullish rating in mid-April and in mid-June. Unfortunately, the stock continued to fall despite a number of

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This article was written by

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Oakoff Investments is a personal portfolio manager and a quantitative research analyst with 5 years helping readers find a reasonable balance between growth and value by sharing proprietary Wall Street information.

He leads the investing group Beyond the Wall Investing with features that include: a fundamentals-based portfolio, weekly analysis on insights from institutional investors, regular alerts for short-term trade ideas based on technical signals, ticker feedback by request from readers, and community chat. Learn more.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.

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