Nio To Report Earnings After Short Seller Targets Stock
Nio (NIO) tees as much as report third-quarter outcomes late Tuesday, after Tesla‘s (TSLA) rising Chinese nemesis turned the goal of a brief vendor. Nio inventory rose.
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The report comes after EV rivals Li Auto (LI) and Xpeng Motors (XPEV) both reported mixed results and bullish guidance.
But Chinese electric-car shares bought off after short seller Citron Research targeted Nio stock, advising traders to rotate out and guide earnings.
Nio Earnings Report
Estimates: Wall Street expects the electric-SUV maker to lose 15 cents a share vs. a internet lack of 33 cents per share a yr in the past. Revenue is seen leaping 144% to $628 million.
Results: Check again after the shut.
Nio has already disclosed that Q3 deliveries surged 154% to 12,206 autos, surpassing the excessive finish of its personal steering. October deliveries additionally greater than doubled yr over yr.
Also in Q3, Nio started deliveries of the brand new, extra inexpensive EC6 electrical crossover and launched its automobile “battery-as-a-service” enterprise.
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Nio Stock
Shares rallied 3.4% to 47.11 in Tuesday stock market trading. The relative strength line for Nio inventory has come off highs after bolting up since October, in response to MarketSmith chart analysis. It’s the blue line within the chart proven. Earlier this yr, Nio inventory vaulted on an enhancing monetary image and robust word-of-mouth for its electrical SUVs.
Among different electrical automobile shares, Li Auto climbed 4% and Xpeng rose 4.1%. On Monday, Citi analysts upgraded Li Auto inventory to purchase with a value goal of 45.60 and hiked their Xpeng value goal to 57.71 from 34.70. Tesla, which is becoming a member of the S&P 500 index, jumped 12%.
Nio Vs. Tesla
Nio has emerged as a much bigger menace to Tesla in China. It plans to broaden into Europe in 2021, following Tesla’s latest transfer to export Chinese-made Model 3s to the area.
Meanwhile, Nio’s new EC6 electrical crossover launched in late September and reportedly generated a robust backlog of orders. The sporty, youth-oriented “electric coupe SUV” is seen as a rival to the upcoming Model Y in China. Even extra, traders will search for updates on a brand new electrical sedan set to launch subsequent yr, difficult the Model 3.
Both autos push Nio into the extra inexpensive section of electrical automobiles. Founded in November 2014, Nio started promoting the premium seven-seater ES8 electrical SUV in June 2018 and the five-seater ES6 in June 2019. Nio inventory backers embrace Chinese gaming and social media big Tencent (TECHY).
Along with earnings, traders will watch how effectively Nio managed prices as manufacturing and deliveries elevated. They will seemingly need to understand how Nio’s brand-new battery subscription enterprise, underpinned by a brand new battery firm, is doing. Nio launched the battery initiatives in August, aiming to ease ache factors tied to proudly owning an electrical car.
Not least, Nio’s margins and money stability will probably be watched, as measures of operational effectivity. At the tip of June, Nio had $1.6 billion in money. Gross margin improved from destructive 12.2% in Q1 to optimistic 8.4% in Q2.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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