- NIO grew deliveries by leaps and bounds in the third quarter on rising SUV sales.
- Job openings declined in October, while the November ISM Services PMI showed expansion.
- Nio bests consensus on earnings but misses revenue expectations for Q3.
- Chinese EV maker guides for deliveries between 47K and 49K in Q4.
Nio (NIO) stock jumped 5.5% on Tuesday morning to $7.72 after the Chinese electric vehicle (EV) manufacturer released third-quarter earnings that showed sales of higher margin SUVs surged 258% from the most recent quarter and 64% from a year ago.
The broader market is mixed as the Dow Jones sells off about 30 basis points, while the NASDAQ Composite has risen 0.4%. The ISM Services PMI was released a half hour into the regular session, and it showed rising expansion in the US service sector. The survey of service sector executives rose to 52.7 in November, above the previous month’s 51.8 reading. The JOLTS Job Opening data for October additionally showed job openings falling from the previous reading of 9.35 million to 8.773 million. This is viewed as more evidence for a soft landing in the economy that should make the Federal Reserve more open to cutting rates as it can see its tight monetary policy working to soften a once tight labor market.
ADP Employment Change arrives on Wednesday, Initial Jobless Claims follow on Thursday, before November US Nonfarm Payrolls arrive on Friday.
Nio stock and earnings news
Nio beat earnings expectations but missed the average revenue forecast for the third quarter. Earnings Per Average Dilute Share or EPADS was $-0.31, five cents better than the Wall Street forecast. Revenue of $2.61 billion rose almost 47% from a year ago but missed consensus by $50 million.
“According to the retail sales data from China Automotive Technology & Research Center, NIO ranked first in the battery electric vehicle market segment priced over RMB300,000 in China, with a market share of 45% in the third quarter of 2023,” boasted CEO William Li.
Vehicle margin rose to 11% in the third quarter, better than the 6.2% seen in Q2 2023 but down from 16.4% seen in the year-ago quarter. The rise in margin was a product of much higher vehicle volumes. Nio delivered 55,432 in Q3, better than the 31,607 deliveries in Q3 2022 and the 23,520 delivered one quarter earlier.
Nio’s electric sedan division reported deliveries that rose 104% from a year ago and 37% from Q2. Altogether, total deliveries from SUVs and sedans jumped 75% from a year ago.
Based on the fourth-quarter outlook, Nio management expects 47K to 49K in total deliveries, a rise of about 20% YoY. Revenue, however, is forecast to arrive between flat to up 4% YoY.
Price competition appears to be minimizing revenue growth one year into an EV price war launched by Tesla (TSLA). The leader of the global EV industry, albeit with heavy competition from hybrid powerhouse BYD (BYDDY) in China, Tesla is back in the news this week after a Danish union announced it would refuse to deliver the company’s vehicles via Danish ports and roads due to the company’s ongoing fight with a Swedish union. The action is called a “sympathy strike”.
Nasdaq FAQs
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Nio stock forecast
Nio stock has been slipping sideways below support at $7.30 recently after a series of lower highs. After announcing a $1.5 billion convertible bond back in September, the possibility of dilution has been scaring away would-be investors.
The only saving grace for bulls is to take advantage of the third quarter’s fairly successful result. If bulls can push above the November 6 high at $8.51, then Nio stock may witness an influx of buyers. This would allow a rally above the $9.20 resistance level that makes the bearish impulse obsolete.
However, NIO stock is trading beneath its 200-day Simple Moving Average (SMA), which is trending down just above the $9.20 resistance level. This means that the trend is down, and most of the market will not have confidence in NIO until the stock breaks above that SMA. Buyers beware for now.
NIO daily chart
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