Quick NIO Update – What You Need to Know Before NIO Day
Last time we talked about NIO, the stock was in a very interesting position. There were a bunch of developments during the holiday period and so, with one of our first stock analysis blogs for 2021, I want to have another look at it.
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In a very short time-frame, NIO managed to produce some really impressive numbers. And, if you are a NIO shareholder, this blog is definitely for you. But, if you missed out on getting into the position, don’t worry, because the market is eventually going to present you with an excellent opportunity to buy in. This is the beauty of long-term investing – we are looking at the far future and waiting for good opportunities. Besides, what happened here isn’t 100% unique either. There are going to be other companies that go through similar situations and analysing the pattern is the best way to learn how to recognise the opportunities. You may have an interest in checking other related blogs like “Lets Talk NIO Stock“.
We’re going to talk about:
- The analyst price targets
- The numbers for December (the reason for these price targets)
- What to keep an eye out for
The numbers right now
As of the recording of this blog (05.01.2020), Nio is sitting at the following numbers
- Current Price: $52.72 (today change – 0.77 (1.44%))
- Market Cap: 82.178 B
- EPS: – 44.10
What do the analysts have to say?
Now, as you know, I’m not a huge fan of following what the analysts say. Still, their opinions are kind of important if we look at the bigger picture. Many people out there are going to listen to what they say and are going to make moves, based on their predictions. This can significantly impact the market in general, so we can’t afford to ignore it.
The three price targets for December were:
- $59 from Merrill Lynch
- $59 from Daiwa
- $50 from Deutsche Bank
After showing insane growth during the last year and a half, Nio is going through its consolidation phase. The company went from a couple of dollars per share to fifty dollars in less than two years, and this type of period is expected. It happens to just about every stock that grows this fast. And don’t’ get me wrong – I’m not saying that Nio is 100% going to spend the next few years consolidating. The EV industry is all about incredible growth, and I believe that the company will keep growing.
But, here’s the thing about “expectations” on the stock market – nothing is ever 100% guaranteed. Even though I expect Nio to keep growing steadily, I’m not rushing to buy, because I know that they could also suddenly drop in price. As usual, I am taking my own advice and sitting on my position, looking for opportunities to buy when I feel that the stock is undervalued.
The numbers that I’m talking about came from NIO’s delivery update in December. They released both a fourth quarter and a complete 2020 delivery update, demonstrating some fantastic results. And, if you’ve been keeping an eye on the EV market, you can probably already tell where all of the buzz is coming from. EV investors are all about the delivery numbers. NIO managed to exceed everyone’s expectations in a big way. So, here’s what they managed:
- 7007 (seven thousand and seven) vehicles delivered for December – an increase of 121% year-over-year
- 17, 353 (seventeen thousand three hundred fifty-three) for the last quarter of 2020, an increase of 111% year-over-year
Which makes up to a total of 43 728 (forty-three thousand seven hundred twenty-eight) vehicles for 2020 – an increase of 112.6% (one hundred and twelve point six percent) year-over-year
As of December 31st, their cumulative deliveries of ES8, ES6 and EC6 were at 75 641 (seventy-five thousand six hundred forty-one)
In case you didn’t pick up on it, these are some incredible numbers. They managed all of this, during a worldwide pandemic, with all of its panic, lockdowns and travel delays. Not to mention that EVs aren’t exactly what you can call an “affordable everyday product”.
Just for the sake of comparison, Tesla didn’t manage to hit the internal delivery target. Of course, I still love Tesla, and I’m not saying this to discredit them. I’m a massive believer in Elon Musk’s vision, and I will keep investing in the company. But the fact that NIO managed to outdo even Tesla is just amazing for me.
As I already mentioned, I believe that Nio is a bit overpriced currently, so I’m not rushing to buy right now. But as soon as they drop down a bit (which they will eventually!) I will be more than happy to add more Nio stock to my portfolio.
Nio and the future – What to expect
On the Fourth Nio day, which will happen just a few days from now – on January 9th 2021. Nio is going to unveil their new sedan model and share what they call “the latest developments of autonomous driving”. And, if you are like me and you aren’t a “car person”, I’ll save you the time and tell you that this is a big deal. Up until this point, Nio was pretty much only involved in the SUV game. But guess what – not everyone wants an SUV. There are many people out there, who would never even think about spending money on an SUV. And until now, Nio was essentially missing out on a huge market share by producing only one “type” of vehicle. So, their sedan model will allow them to compete for a global market share that they weren’t even involved before.
So, in summary, I am very optimistic about Nio – both for their situation at the moment and their future growth possibilities. I will definitely be keeping an eye on the prices, and as soon as the stock drops to where I feel like it is undervalued, I’m going to add more Nio stock to my portfolio.
Recommended for further reading:
- Investing QuickStart Guide
- Rich Dad’s Guide to Investing
- The Little Book of Common Sense Investing
- The Barefoot Investor: The Only Money Guide You’ll Ever Need
- Rule #1: The Simple Strategy for Successful Investing in Only 15 Minutes a Week