NIO Faces Bearish Trends Amid Weak Earnings and Technical Struggles, Analysts Recommend Caution

Technical Analysis

NIO closed at $3.53 on June 3, 2025, marginally up by 0.28%. The stock trades near its 52-week low of $3.02, far below the recent year high of $7.71. Key technical indicators highlight a bearish trend: the RSI at 16 signals an oversold condition, while the MACD remains negative at -0.04, denoting sustained downward momentum. The price is below both the 50-day ($3.86) and 200-day ($4.56) moving averages, reinforcing the bearish technical outlook. Immediate support is noted at $3.52, with resistance at $3.75. Given the low RSI, short-term relief rallies may occur, but bearish pressure dominates.

For the next trading day (June 4, 2025), the stock is likely to hold near current levels or test support slightly lower due to market reaction to disappointing Q1 results. Over the next week, a potential range-bound movement between $3.35 and $3.75 is expected, but breakthrough above $3.75 resistance is required to confirm any meaningful recovery.

Fundamental Analysis

NIO’s Q1 2025 earnings reflect widening losses, with a negative EPS of -$1.63 and a negative P/E ratio (-2.17), indicating unprofitability. Revenue growth lagged despite a 40% increase in deliveries, primarily driven by lower ASPs tied to the new Onvo sub-brand. The firm’s Q2 guidance disappointed market expectations, intensifying concerns over achieving profitable scale within 2025. A 211-basis-point quarter-over-quarter margin compression and shrinking margins raise execution risk. Management optimism about sales acceleration in the second half is noted but unproven. Operating and margin challenges suggest ongoing volatility ahead.

Consensus analyst target price at $4.20 implies potential upside of roughly 19% from current prices, but this is tempered by continued operational headwinds. The consensus rating is “Hold” with 8 buys, 10 holds, and 2 sells, reflecting investor uncertainty amid fundamental weaknesses and structural challenges.

Intrinsic Value & Long-Term Investment Potential

Intrinsic valuation is impaired by persistent losses, negative profitability metrics, and margin contractions. Despite the company’s position in a growing EV market and attempts to expand product portfolio and lower prices for volume gains, execution risk remains elevated. Long-term investment potential hinges on NIO’s ability to restore margin expansion and ramp profitable volume, which is unproven as of mid-2025. Volatility and dilution risks persist given extended unprofitability and the need for ongoing investment. The current price does reflect considerable pessimism, potentially providing a margin of safety for longer-term investors with high risk tolerance, assuming operational turnarounds materialize.

Overall Evaluation

NIO exhibits weak technical momentum and deteriorating fundamental metrics. Short-term trading may experience volatility and range-bound price action without clear catalysts for reversal. The stretched valuation and Q1 earnings setbacks constrain the near-term upside. Market reluctance is evident in subdued volume and technical underperformance below moving averages.

This stock, at current levels near $3.53, classifies as a Hold candidate. While significant downside appears limited near established supports and analyst targets offer modest upside, fundamental risks and uncertain profit trajectories advise caution against aggressive accumulation. For long-term horizons, the stock remains a speculative play dependent on successful execution of growth and margin strategies.