What Could Affect NIO Inc. Stock in Short-Term

Chinese automotive company Nio Inc. (NYSE: NIO) has raised more than $5 billion in investor capital so far, and its stock is one of the most searched on Zacks.com. Despite these positive moves, Nio shares had a -20.1% return during the past four weeks compared to the +1.6% gain seen by the Zacks S&P 500 Composite. The Zacks Automotive–Foreign industry category where the company’s shares are listed also saw a 1.2% gain over the same period.

Although it didn’t pioneer the idea of battery swapping as an alternative to charging battery electric vehicles (BEVs), Chinese electric vehicle company Nio was the first major company to roll out battery swapping stations alongside regular charging stations. With more than 2,300 installed battery swap stations and plans to roll out 1,000 more, the EV company currently has the largest battery swap network on the globe. As battery swapping essentially grants EV drivers the same speed and convenience as refueling a petrol or diesel-powered vehicle, Nio soon attracted significant investor attention.

So, why are Nio shares performing at their current level, and how will they fare in the near- and medium-term future? According to an analysis by Zacks.com, Nio will suffer a loss of $0.31 per share this quarter, a +26.2% change compared to the company’s performance in the same quarter last year.

The Zacks Consensus Estimate has also seen a -75% change over the past month. Zacks says that Nio’s -$1.26 consensus earnings estimate for the ongoing fiscal year indicates a +28% change from last year with the estimate changing by -10% over the past 30 days. Furthermore, Zacks notes that the Chinese automaker’s -$0.83 consensus earnings estimate pointed to a +34% change compared to expected reports with a +35% change in the past month.

The Zacks Rank, a proprietary stock tool used by Zacks.com to offer more conclusive predictions of stock price directions, rates Nio shares at no. 4 (sell) thanks to the size of the recent consensus estimate change.

Nio’s $1.48 billion consensus sales estimate for the ongoing quarter points to a -4.7% year-over-year change while $9.21 billion and $15.36 billion consensus sales estimates for the current fiscal year and the next fiscal year point to +18.3% and +66.8% changes respectively. Nio’s reported revenue for the last quarter also reached $2.41 billion, 3.4% more than the same quarter last year while its EPS was at -$0.45 compared to -$0.51 compared to the previous year.

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