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NIO Inc. Faces Bearish Pressure with Negative Profit Indicators, Analysts Recommend Hold

StockInvest.us, 1 month ago

NIO Fundamental Stock Analysis of NIO Inc.

NIO Inc., an NYSE listed Electric Vehicle (EV) company, closed at $8.44 on October 12, 2023, suffering a change of -0.53, which is a decrease of 5.91% from its previous closing price. The company's year-to-date performance showed a high of $16.18 and a low of $7. A glance at the market capitalization shows that the company is valued at $15.01 billion.

The earnings per share (EPS) stands at a negative $1.69. This negative EPS is typically not a good sign as it shows the company is not currently profitable. The price-to-earnings (PE) ratio, a helpful metric used to evaluate a company's relative value, is also negative at -4.99. This further emphasizes the company's lack of profitability.

Looking at the average volume, it stands at 57.73 million shares, but the last trading day saw only 36.51 million shares change hands. This represents a lower activity compared to its usual trading days. The outstanding number of shares stands at approximately 1.78 billion. The reported DCF is at $20.59.

On the earnings front, the next announcement is expected on 11/08/2023. Judging from the analysts’ consensus, the stock has a consensus Buy rating. Out of 20, 16 analysts have rated it as Buy and 4 as Hold, with none rating it Sell or Strong Sell, and the average target price is $35.15 per share.

Recent News and its Implications

NIO Overall, recent news highlights the strong competition within the EV industry and reveals a growing focus on tech ecosystem development. There is praise for NIO's improving setup and strong rebound in production volumes; its delivery momentum reportedly grew 43.8% in September mainly due to their SUVs. A recent capital raise of $1.0 billion via convertible notes offerings has addressed cash burn concerns. However, the rising competition and pricing pressures within the EV industry may present notable challenges for NIO going forward.

Technical analysis

The Relative Strength Index (RSI14) for NIO stands at 49, which indicates neutrality. The 50-day moving average at $10.60 and the 200-day moving average at $9.90 are both higher than the current price, which could be a concern as the moving averages are often considered to be resistance levels. A negative 3-month MACD (-0.75839) indicates a bearish stance with selling pressure being more dominant. The average true range (ATR) indicates a volatility figure of $6.07, which could suggest large intraday price movements are possible. In terms of support and resistance levels, the stock has found a support level at $8.41 and a resistance level at $8.55, indicating a narrow range.

Next Day and Week Prediction and Final Evaluation

Given the neutral RSI, the negative MACD and the current price lying below the 50-day and 200-day moving averages, the price might face resistance to move upwards in the next trading day, October 13, 2023, and the upcoming week. The stock has support at $8.41 but considering the bearish momentum, there might be a risk of breaking this level.

In conclusion, NIO's stock presents a mixed picture. While the stock is facing some bearish pressure and negative profit indicators in the short term, the long-term forecast seems promising with a Buy consensus rating from analysts and a DCF valuation considerably above current prices. Additionally, the company has been making strides in improving its operation and competitiveness with strong volumes and a successful capital raise.

Given these circumstances, it might be prudent to adopt a "Hold" stance on NIO Inc. The bearish short-term indicators could call for caution, and investors might want to wait and see if the company can navigate the competitive pressures in the EV industry and continue its momentum, as indicated by its recent news.

Check full NIO forecast and analysis here.