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$NIO Q3 Earnings May Add To Its TroubleBefore NIO Inc. (NYSE: NIO) reported its Q2 earnings, we expected the EV maker to miss revenue estimates while posting an EPS in line with estimates. As the company missed both estimates, it is not surprising that its stock is down more than 45% since then. That being said, Nio is expected to post its Q3 earnings later this month where analysts expect it to report an EPS of -$0.43. Although the company reported impressive delivery numbers in Q3, our model forecasts it to report a wider loss than analysts’ estimate. It is for this reason that investors may find it lucrative to go short on Nio stock. NIO Fundamentals Q3 Forecast In Q3, Nio delivered 55,432 vehicles, a record quarterly figure. While this could mean that the company may report record earnings, that may not be the case in its upcoming Q3 earnings report. Nio has been suffering from declining vehicle revenue per delivery since Q4 2022 as it dropped significantly from $53,426.94 in Q4 2022 to $43,271.45 and it further declined in Q2 to $42,129.51. There are 2 reasons behind the drop in the company’s vehicle revenue per delivery. The first is that many of its deliveries are of the ET5 model and 75-kilowatt standard-range battery pack models, as stated by management in the Q2 earnings report. The second reason is the company cutting the prices of its EVs in the wake of the price war Tesla (NASDAQ: TSLA) started. All of these factors have major implications for Nio’s revenues and gross margins. In terms of revenues, the lower average selling price means that Nio generates less revenue than it could from its deliveries. By using the average vehicle revenue of the last 2 quarters, the projected vehicle revenue for Q3 is $42,700.48. This means that Nio’s projected vehicle revenue in Q3 is more than $2.3 billion by multiplying the projected vehicle revenue per delivery by its Q3 deliveries. Quarter Vehicle Sales Deliveries Revenue/Delivery Q1 21 $1,130,344,000 20,060 $56,348.16 Q2 21 $1,225,384,000 21,896 $55,963.83 Q3 21 $1,340,405,000 24,439 $54,846.97 Q4 21 $1,446,093,000 25,034 $57,765.16 Q1 22 $1,458,207,000 25,768 $56,589.84 Q2 22 $1,428,889,000 25,059 $57,020.99 Q3 22 $1,677,474,000 31,607 $53,072.86 Q4 22 $2,139,856,000 40,052 $53,426.94 Q1 23 $1,343,189,000 31,041 $43,271.45 Q2 23 $990,886,000 23,520 $42,129.51 Q3 23 $2,366,972,848 55,432 $42,700.48 As such, Nio’s gross margins would be impacted. In the Q2 earnings call, management reiterated its target of double-digit vehicle gross margin in Q3 and 15% in Q4. These targets seem unrealistic since the company is still in the same position in Q1 and Q2 as the majority of its deliveries are from the cheaper ET5 and 75-kilowatt standard-range battery pack models. In fact, its margins should deteriorate further since all of the Q3 deliveries were after the $4,200 price cut on all of its vehicles. Based on this, using the average gross margin of the last 3 quarters to forecast its Q3 vehicle margin makes sense since the margins of these 3 quarters are all within the same level Nio is expected to have in Q3 due to the aforementioned reasons. This means that the EV maker’s gross margin would be 6.04% or a gross profit of $142.9 million. In this way, we can forecast Nio’s Q3 cost of vehicle revenue to be around $2.2 billion. Quarter Vehicle Cost of Sales Vehicle Gross Profit Vehicle Gross Margin Q1 21 $891,197,000 $239,147,000 21.16% Q2 21 $976,985,000 $248,399,000 20.27% Q3 21 $1,098,516,000 $241,889,000 18.05% Q4 21 $1,144,199,000 $301,894,000 20.88% Q1 22 $1,193,752,000 $264,455,000 18.14% Q2 22 $1,190,879,000 $238,010,000 16.66% Q3 22 $1,402,722,000 $274,752,000 16.38% Q4 22 $1,993,471,000 $146,385,000 6.84% Q1 23 $1,275,177,000 $68,012,000 5.06% Q2 23 $929,260,000 $61,626,000 6.22% Q3 23 $2,223,979,004 $142,993,844 6.04% As for other revenues, they are projected to be $215.1 million which is the average of the first 2 quarters of the year since there were no material changes that would affect that item. In addition, other revenues had an average gross margin of -21.84% over Q1 and Q2 which can help us project its other revenues cost of sales to come in the region of $262 million. Quarter Other Cost of Sales Other Gross Profit Other Gross Margin Q1 21 $89,836,000 -$1,838,000 -2.09% Q2 21 $87,682,000 -$4,630,000 -5.57% Q3 21 $113,909,000 $67,445,000 37.19% Q4 21 $142,748,000 -$35,199,000 -32.73% Q1 22 $141,372,000 -$36,223,000 -34.45% Q2 22 $145,629,000 -$37,909,000 -35.19% Q3 22 $181,168,000 -$30,836,000 -20.51% Q4 22 $245,374,000 -$56,240,000 -29.74% Q1 23 $255,806,000 -$44,380,000 -20.99% Q2 23 $268,426,000 -$49,635,000 -22.69% Q3 23 $262,084,786 -$46,976,286 -21.84% By adding all of these projections, we can reach a total revenue estimate of $2.5 billion and a total cost of revenue estimate of $2.4 billion. This would represent a sequential improvement in gross margin to 3.72% compared to almost 1%. With the topline covered, it’s time to forecast Nio’s expenses and EPS. In terms of R&D expenses, management expects it to be at the same levels as Q1 and Q2 until the end of 2024. Therefore, we can project Q3 R&D expenses to be $454.5 million based on the average of Q1 and Q2. This would represent 17.6% of its projected revenues which would be a sequential improvement from 38.13%. Quarter R&D R&D as % of Revenue Q1 21 $104,788,000 8.60% Q2 21 $136,862,000 10.46% Q3 21 $185,170,000 12.17% Q4 21 $286,934,000 18.47% Q1 22 $277,899,000 17.78% Q2 22 $320,909,000 20.88% Q3 22 $413,934,000 22.65% Q4 22 $577,130,000 24.78% Q1 23 $447,844,000 28.81% Q2 23 $461,238,000 38.13% Q3 23 $454,541,000 17.60% In terms of SG&A expenses, management expects it to increase due to more marketing activities in tandem with the launch of the new NT2 models, while representing a smaller percentage of revenue compared to the first half of the year. With that in mind, SGA expenses average around 23.47% of revenue since Q1 2022. Therefore, using this figure leads us to project Q3’s SG&A expenses to be around $605.9 million. Quarter SG&A SG&A as % of Revenue Q1 21 $182,736,000 15.00% Q2 21 $231,973,000 17.73% Q3 21 $283,216,000 18.61% Q4 21 $370,061,000 23.82% Q1 22 $317,828,000 20.33% Q2 22 $340,762,000 22.18% Q3 22 $381,315,000 20.86% Q4 22 $511,421,000 21.96% Q1 23 $356,155,000 22.91% Q2 23 $393,944,000 32.57% Q3 23 $605,939,103 23.47% Another part of Nio’s operating expenses is other operating income. This expense has averaged around 0.96% since Q1 2022 which is why it can be used to project the company’s Q3 other operating income. This means that this expense would amount to $24.8 million. Quarter Other Operating Income/Loss Other Income as % of Revenue Q1 21 $5,047,000 0.41% Q2 21 $6,843,000 0.52% Q3 21 $5,108,000 0.34% Q4 21 $6,605,000 0.43% Q1 22 $22,240,000 1.42% Q2 22 $36,738,000 2.39% Q3 22 $7,255,000 0.40% Q4 22 $21,756,000 0.93% Q1 23 $36,025,000 2.32% Q2 23 $5,531,000 0.46% Q3 23 $24,832,012 0.96% Based on these projections, Nio is forecasted to report an operating loss of $939.6 million in Q3. Revenue $2,582,081,348 Cost of Sales $2,486,063,790 Gross Profit $96,017,557 R&D $454,541,000 SG&A $605,939,103 Other Income $24,832,012 Operating Loss -$939,630,534 For the rest of Nio’s income statement, we can use the average of the last 2 quarters as follows to forecast them since no material changes impacting these items occurred in Q3. Quarter Interest Income Interest Expense Shares of Equity Investees Other Income/Loss Loss Before Tax Income Tax Q1 21 $18,257,000 -$64,678,000 $15,765,000 $7,583,000 -$68,241,000 -$604,000 Q2 21 $29,897,000 -$9,374,000 -$534,000 $7,575,000 -$90,659,000 -$280,000 Q3 21 $37,266,000 -$11,980,000 -$5,530,000 $5,055,000 -$129,133,000 -$504,000 Q4 21 $56,344,000 -$11,916,000 -$266,000 $8,399,000 -$331,134,000 -$5,217,000 Q1 22 $63,207,000 -$12,200,000 $4,138,000 $13,706,000 -$276,404,000 -$4,805,000 Q2 22 $43,723,000 -$9,661,000 $7,174,000 -$28,360,000 -$411,956,000 $267,000 Q3 22 $44,030,000 -$14,137,000 $7,318,000 -$69,668,000 -$576,535,000 -$1,355,000 Q4 22 $51,029,000 -$10,246,000 $36,455,000 $45,772,000 -$836,474,000 -$2,435,000 Q1 23 $44,668,000 -$9,998,000 $1,980,000 $18,680,000 -$689,012,000 -$1,117,000 Q2 23 $34,088,000 -$11,369,000 $1,467,000 -$19,079,000 -$832,553,000 -$2,575,000 Q3 23 $39,378,000 -$10,683,500 $1,723,500 -$199,500 -$909,412,034 -$1,846,000 Adding all of these projections together we reach a net loss projection of $911.2 million or an EPS of -$0.6 at its last reported outstanding shares count of 1.5 billion. This would be a wider loss than analysts’ estimate of -$0.43 which could see the stock sink to new lows. Revenue $2,582,081,348 Cost of Sales $2,486,063,790 Gross Profit $96,017,557 R&D $454,541,000 SG&A $605,939,103 Other Income $24,832,012 Operating Loss -$939,630,534 Interest Income $39,378,000 Interest Expense -$10,683,500 Shares of Equity Investees $1,723,500 Other Income/Loss -$199,500 Loss Before Tax -$909,412,034 Income Tax -$1,846,000 Net Loss -$911,258,034 OS 1,520,452,081 EPS -$0.60 Valuation Even after its 45% drop since our last article covering it, NIO stock may still be overvalued at its current valuation. As is, the EV maker has a book value of $2.5 billion which means that its book value per share is $1.67. Taking this into consideration, Nio is trading at a 4.55 P/B ratio which could indicate that the stock is still overvalued given that a suitable P/B ratio is usually less than 3. Based on this, we can reach a $5 price target on NIO stock which means that there’s around 31% downside from the current share price. Total Assets $12,050,105,000 Total Liabilities $9,518,072,000 Book Value $2,532,033,000 OS 1,520,452,081 BVPS $1.67 Share Price $7.58 P/B Ratio 4.55 Upside Risks Despite this, there is a risk to the bearish thesis on NIO stock that investors should consider. Battery costs have been declining with the global weighted average price for lithium-ion cell prices dropping below $100 per kilowatt-hour for the first time in 2 years last August due to raw material prices declining, according to energy analytics firm Benchmark Mineral Intelligence. This could lead EV makers including Nio to witness better margins since batteries represent 30% of an EV’s manufacturing cost, according to a Goldman Sachs report. Technical Analysis On the hourly chart, NIO stock is in a neutral trend as it is trading in a sideways channel between $7.2 and $8.08. Looking at the indicators, the stock is below the 200, 50, and 21 MAs which is a bearish signal. However, the RSI is approaching oversold at 32 and the MACD recently turned bullish. As for the fundamentals, Nio’s upcoming Q3 earnings have the potential to be make or break for the stock. If the company fails to reach the double-digit gross margin target as the model above expects, there might be substantial downside pressure on the stock price. With the stock trading near support, investors could wait for a break of the $7.2 to enter a short position in the stock. With that in mind, a break of this support could signal a drop near $5.84, which would be a multi-year low. NIO Forecast To conclude, NIO stock’s forecast could be bearish. While the EV maker’s deliveries increased substantially in Q3, it remains to be seen whether this increase was fueled by its price cuts. Since the company is already operating at poor margins, the price cuts may further compress margins, which makes management’s target of reaching double-digit margins in Q3 potentially unrealistic. Meanwhile, our model forecasts the company to post a wider loss than analysts’ estimates. Considering Nio’s history of overpromising and underdelivering, its stock could continue its free fall if it fails to meet expectations once again in Q3 which could see it reach the $5 price target.
NYSE:NIO
by Penny_Stocks_Today
1
Macd rami//Created by user ChrisMoody updated 4-10-2014 //Regular MACD Indicator with Histogram that plots 4 Colors Based on Direction Above and Below the Zero Line //Update allows Check Box Options, Show MacD & Signal Line, Show Change In color of MacD Line based on cross of Signal Line. //Show Dots at Cross of MacD and Signal Line, Histogram can show 4 colors or 1, Turn on and off Histogram. //Special Thanks to that incredible person in Tech Support whoem I won't say you r name so you don't get bombarded with emails //Note the feature Tech Support showed me on how to set the default timeframe of the indicator to the chart Timeframe, but also allow you to choose a different timeframe. //By the way I fully disclose that I completely STOLE the Dots at the MAcd Cross from "TheLark" study(title="CM_MacD_Ult_MTF", shorttitle="CM_Ult_MacD_MTF") source = close useCurrentRes = input(true, title="Use Current Chart Resolution?") resCustom = input(title="Use Different Timeframe? Uncheck Box Above", type=resolution, defval="60") smd = input(true, title="Show MacD & Signal Line? Also Turn Off Dots Below") sd = input(true, title="Show Dots When MacD Crosses Signal Line?") sh = input(true, title="Show Histogram?") macd_colorChange = input(true,title="Change MacD Line Color-Signal Line Cross?") hist_colorChange = input(true,title="MacD Histogram 4 Colors?") res = useCurrentRes ? period : resCustom fastLength = input(12, minval=1), slowLength=input(26,minval=1) signalLength=input(9,minval=1) fastMA = ema(source, fastLength) slowMA = ema(source, slowLength) macd = fastMA - slowMA signal = sma(macd, signalLength) hist = macd - signal outMacD = security(tickerid, res, macd) outSignal = security(tickerid, res, signal) outHist = security(tickerid, res, hist) histA_IsUp = outHist > outHist and outHist > 0 histA_IsDown = outHist < outHist and outHist > 0 histB_IsDown = outHist < outHist and outHist <= 0 histB_IsUp = outHist > outHist and outHist <= 0 //MacD Color Definitions macd_IsAbove = outMacD >= outSignal macd_IsBelow = outMacD < outSignal plot_color = hist_colorChange ? histA_IsUp ? aqua : histA_IsDown ? blue : histB_IsDown ? red : histB_IsUp ? maroon :yellow :gray macd_color = macd_colorChange ? macd_IsAbove ? lime : red : red signal_color = macd_colorChange ? macd_IsAbove ? yellow : yellow : lime circleYPosition = outSignal plot(smd and outMacD ? outMacD : na, title="MACD", color=macd_color, linewidth=4) plot(smd and outSignal ? outSignal : na, title="Signal Line", color=signal_color, style=line ,linewidth=2) plot(sh and outHist ? outHist : na, title="Histogram", color=plot_color, style=histogram, linewidth=4) plot(sd and cross(outMacD, outSignal) ? circleYPosition : na, title="Cross", style=circles, linewidth=4, color=macd_color) hline(0, '0 Line', linestyle=solid, linewidth=2, color=white)
NYSE:NIO
by alamaken888
NIO is looking for a 100% retracement into $16 areaWe are looking at NIO right now. We have a valid break of structure on the weekly timeframe. Price has retraced back into the demand zone just below the low made after the Change of Character. We are seeing a reaction from the GAP right below the CHoCH low. We have zoomed into the 1hr timeframe, and seeing a bullish structural setup being created. We are waiting for the BOS (Break of Structure to happen, to confirm bullish sentiment. Followed by a retracement back into the low of the CHoCH and reaction to the order block below it. If these structural elements are confirmed, there is a solid chance that NIO is looking for a push to the upside at $16. I would definitely keep an eye out for NIO maybe a 2-3 month expiration call option play with a strike around $15 to give you that ITM premium once price pushes above it. Keep your eyes on NIO in the short term.
NYSE:NIOLong
by Zulu_Kilo
3
NIO CHANGED MY LIFE EV is the future and im going all in on the future always that said yay for Chinese Tesla my strategy is always root for the underdog Technical Analysis I am expecting price to react to my supply zone driving itself lower from there to either one of my resistances where I will seek out increasing bullish momentum among the candle sticks to indicate price going higher and from there im expecting sweet stonks stonks stonks as price breaks my supply zone Fundamental Despite the transitory slowdown, NIO remains a solid growth company with significant expansion potential and substantial EPS growth prospects, As NIO's revenues continue expanding, its profitability should improve, leading to multiple expansions and a much higher stock price in future years. Source: Seekingalpha NYSE:NIO is a sleeping giant and im rooting for her 100%
NYSE:NIOLong
by carinatrades
21
💰5 Reasons To Use The ''Rocket Booster'' Strategy📈💹Why you should only buy below $10 stocks --- #1 - These stocks are more volatile #2 - You will gain at least 2% profit or loss #3 - This is a better risk management #4 - And you won't get to use margin #5 - This reduces your risk levels --- Disclaimer: -- This is not financial advise do not buy or sell any stock or anything i recommend to you -- Do your own research before you trade -- Show me some support for giving you this FREE Knowledge and rocket boost this content
NYSE:NIOEducation
by lubosi
$NIO - $4.60 Price Target with cracked flag, WEEKLY Death Cross I have been posting ever since the weekly flag has been setting up, the stock has finally cracked below the flag. If you have shorted on the crack, kudos to you. Potential downside is to $4.60. Remember the length of the flag pole equals to the potential measured downside which normally equates to about same length of the original bearish flag pole. We also see a bearish death cross on the weekly MACD and the squeeze mod is also curling over in a bearish downturn.
NYSE:NIOShort
by TheTradingStar
Nio to $20And then onwards and upwards. ** Investment opportunity ** On the above 12 day chart price action has corrected since a sell signal printed at $57 back in January 2021. A number of reasons now exist to be long. They include: 1) Price action and RSI resistance breakouts. 2) Price action confirms support on past resistance. Look left. 3) Price action is on the Golden Ratio. 4) No stock splits. Is it possible price action corrects further? Sure. Is it probable? No. Ww Type: Investment Risk: 6-10% Timeframe: A long position between now and end of October 2023. Return: 1st target $20. 2nd target, will say elsewhere.
NYSE:NIOLong
by without_worries