Sign InNIO Stock Analysis: Buy NIO Shares Despite Bearish Trend, Analysts Predict Long-Term Potential
Summary
Based on fundamental and technical analysis, along with market sentiment, it is suggested to buy NIO stock as it has long-term potential and has received a consensus rating of Buy from analysts, despite near-term bearish indicators and uncertainty around earnings. (Analysis conducted on October 24, 2023)
Fundamental Analysis
NIO Inc., traded on NYSE with ticker "NIO", ended the last trading session of October 23, 2023, at $7.59, a slight increase of $0.01 (0.13%) compared to the previous session. The shares moved within a relatively narrow range during the day, with a low and high price of $7.31 and $7.7 respectively. Across the previous year, NIO stock has seen a lowest price point of $7.0 and a maximum value of $16.18.
With a market capitalization of $13.50 billion, the current EPS stands at -1.6. As the stock is currently not making a profit, a negative price-to-earnings ratio of -4.74 has been calculated. The company has 1.78 billion shares outstanding.
Turning to the average volume data, NIO posted a trading volume of 33.14 million in the last session, which is lower than its average volume of 56.09 million. Looking at the analyst recommendation data, NIO earns a consensus rating of "Buy" with 16 analysts suggesting 'Buy', 4 suggesting 'Hold', and none advocating 'Sell'.
The next earnings announcement is scheduled for November 8, 2023. It's important to know that the latest news points towards mixed sentiment. A huge Bank (DNB Asset Management) has significantly raised its investment in NIO. However, a Morgan Stanley strategist has already labeled the third-quarter earnings season a disappointment.
Technical Analysis
Looking at the technical side, the 50-day moving average for NIO stock is $9.73, with the 200-day moving average reading $9.83. This indicates a mildly bearish trend in recent months, as the current price is below both these averages.
The MACD (Moving Average Convergence Divergence) for the past three months stands at -0.34, indicating a downward trend further. The RSI (Relative Strength Index) value is 33, suggesting the stock is nearing the oversold territory.
The ATR (Average True Range) is 6.14, indicating a high volatility level for the stock. Currently, there is support around the $7.58 level, with resistance at $8.55.
The discounted cash flow (DCF) is currently at $19.74, which is significantly higher than the current trading price, hinting at undervaluation.
Stock Price Prediction
Based on the presented data, a certain level of price fluctuation can be expected in the next trading day (October 24, 2023) due to high volatility (as suggested by the ATR). The analysts' target prices range suggests a long-term potential for the stock, with a high target of $83 and a median target of $31.3.
Final Evaluation
Weighing both fundamentals and technicals, along with the prevailing market sentiment, the current suggestion would be to Buy NIO stock. The consensus among experts also tilts towards a 'Buy'. While the near-term technical indicators exhibit a bearish trend, analyst targets and DCF analysis suggest significant long-term potential. Moreover, the recent investment move by DNB Asset Management serves as a positive signal. However, given the uncertainty around earnings, investors are encouraged to maintain a balanced portfolio.
