NIO’s Earning Call is on Monday - Stock Price Up or Down?

NIO will release its 4th quarter 2020 results on Mar 1st, after the the US market closes. The China based electric vehicle makers quarterly results are likely to reflect the favorable impact of rising demand for the ES6 model, the company’s 5 seater high performance SUV, which forms a major part of the companies fleet.

3rd Quarter Highlights

In the 3rd quarter of 2020 quarter, NIO had a loss of 12 cents per share on revenues of $666 million. Cash equivalents totaled $2.8 billion as of Sep 30th. They delivered 12,200 EV’s in the quarter including 8,600 ES6’s, 3,500 ES8’s and 16 EC6’s. Car deliveries skyrocketed 154% year over year. NIO’s revenues generated from vehicle sales amounted to $628 million, representing an upturn of 146% from 2019 Q3.

So What about Q4?

The companies strong vehicle delivery is likely to have driven sales in Q4. NIO delivered 17,300 vehicles in quarter 4, exceeding analysts predictions, surging 110% year over year. Total Q4 2020 deliveries comprised 7,500 ES6’s, 4,800 ES8’s and 4900 EC6’s. Rocketing demand for ES6, ES8 and EC6 models is expected to have buoyed the company’s Q4 revenues. NIO has been dubbed as the Tesla TSLA of China, delivering 7000 vehicles in December alone, which sets a new monthly record. The reported figure reflects a huge rise of 120% over December 2019. However, whilst surging deliveries have helped overall financila performance, escalating research and development costs, sales, advertising costs etc. have hurt operating profits in 2020. Note that the company’s operational inefficiency has been under a lot of pressure, and this doesn’t look likely to improve just yet.

Earnings & Revenue Projections for Q4

Analysts predict a loss of 14 cents a share. A loss of 39 cents per share was incurred in the prior-year quarter so a pretty good improvement overall. Estimates of revenues of $742 million indicates 81% growth year over year.

So in conclusion, we are not expecting a huge surge in the share price in March, especially during the bear market that we’ve been experiencing in recent weeks, but we should expect a stable price of around 47 to 50 dollars throughout the month. Our overall rating is HOLD.