There are metrics which make Nio look like a terrible investment. Its shares' price-sales ratio is higher than all but 3.5% of automotive stocks. Much more important is the fact that Nio delivered another record month of sales in January, as its vehicle deliveries jumped 352% year-over-year to 7,225.
While NIO's future growth prospects have remained strong or even got better (solid delivery numbers, unveiling of a sedan), its multiple has declined by 23 percent from December. While not undervalued, the multiple has come more in line with its fundamentals.
Author | Broadcaster | Journalist | Commentator | Speaker. Investors in iconic electric vehicle company Tesla TSLA +0.1% should take heed: The stock is overvalued. And its not just a little pricey.
Investors in NIO have reason to be optimistic about the company's future. NIO reported a 352% increase in January 2021 deliveries compared to the prior-year period. But that still only totaled 7,225 electric cars. For the full year 2020, NIO delivered almost 44,000 vehicles, representing 113% growth over 2019.
Higher interest rates, which make financing growth more expensive and reduce the value of future cash flows, hurt EV stocks. So has the chip shortage. NIO stock, for instance, dropped after it cut delivery guidance because of a lack of chips.
Sales
| Calendar year | ES6 | Total |
|---|
| 2019 | 11,433 | 20,565 |
| 2020 | 27,945 | 43,728 |
| 2021 | 11,251 | 27,162 |
| Total | 50,629* | 102,803* |
Chinese government support for electric vehiclesLast year, the government supported Nio by offering it a RMB7 billion (US$1b) bailout last year, providing the company some much needed financial support (the company's cash was down to RMB863m at the end of 2019 from RMB3.
As Tesla has 959.95 million shares outstanding as of Feb. 1 (according to its 10-K filed on Feb. 10), the market cap for TSLA stock is $783.3 billion. Therefore, in 10 years, the price-to-sales ratio for TSLA stock today is just 1.77 times (i.e., $783 billion divided by $441 billion sales in 2030).
| Stocks with the Most Momentum |
|---|
| Carvana Co. ( CVNA) | 274.17 | 665.8 |
| Tesla Inc. ( TSLA) | 662.16 | 662.3 |
| Etsy Inc. ( ETSY) | 219.67 | 565.1 |
| Russell 1000 | N/A | 83.1 |
Gainers
| Company | Price | % Change |
|---|
| DVN Devon Energy Corp | 24.03 | +8.54% |
| HES Hess Corp | 75.94 | +7.79% |
| MRO Marathon Oil Corp | 11.75 | +6.43% |
| SYF Synchrony Financial | 43.03 | +5.65% |
Stock Price ForecastThe 19 analysts offering 12-month price forecasts for NIO Inc have a median target of 58.98, with a high estimate of 87.98 and a low estimate of 20.99. The median estimate represents a +56.41% increase from the last price of 37.71.
Shares of the Chinese electric vehicle maker Nio (NYSE:NIO) had a remarkable performance in the past year, returning around than 1,350%. Given the increased volatility in the markets in earnings seasons, Nio stock could decline further in April.
The Chinese electric-vehicle maker NIO is one of the hottest EV stocks traded on U.S. exchanges, but it doesn't sell any products in the U.S. That could change sooner than investors might expect.
The enterprise value of Tesla at $826 billion is currently more than 10 times its March 2020 trough. At the same time, the enterprise value of NIO at $85 billion presently is higher than what Tesla was valued at in the March 2020 trough.
