NIO: High Growth And A Bit Of A Bargain

Summary

• NIO's Q3 2024 revenues increased by 7% QoQ to $2.6B, with a gross profit rise of 31.8% YoY, despite a 38% stock price drop.
• Q4 delivery numbers are promising, with a 72.9% YoY increase in December, aligning with management's guidance and countering bearish arguments.
• NIO ranks 3rd in the Chinese EV market, benefiting from government subsidies, and aims for long-term profitability through brand positioning and efficiency gains.
• Valuation suggests potential growth, with a projected EV of $20.88B by 2026, implying a 2.15x increase from current levels, with further upside possible.

Richard Drury

Introduction

NIO Inc. (NIO) is one of the leaders in the smart electric vehicle market, with the mission statement "Blue Sky Incoming". They operate under the NIO brand (smart electric vehicles) and under the family-oriented smart electric vehicle brand—ONVO.

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.