Nio (NIO) missed Q4 estimates on the bottom line but edged past top line forecasts, after Chinese electric-vehicle rival Li Auto (LI) reported a surprise profit last week. Nio stock fell late.
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Nio Earnings
Estimates: Late Monday Nio, known as the Tesla (TSLA) of China, was seen narrowing its net loss to 7 cents per ADS from 39 cents a year ago as revenue soared 148% to $1.01 billion.
Results: Per-share loss of 14 cents on revenue of $1.02 billion. Nio has already disclosed that Q4 2020 deliveries leapt 111% to 17,353 vehicles, growing for the third straight quarter after the pandemic hit in early 2020. Its new, sporty and youth-oriented EC6 luxury electric crossover outsold two older electric SUVs — the ES8 and ES6 — in December.
Sales momentum slowed to 5,578 vehicles in February from 7,225 vehicles in January, though both were up triple digits year over year. Last month, the ES6 sales led with 2,216 deliveries vs 2,035 for the EC6 and 1,327 for the ES8.
The EC6 competes against the slightly cheaper made-in-China Tesla Model Y, which began deliveries in January. Two versions of the much-cheaper Volkswagen (VWAGY) ID.4 are due to begin China deliveries by the end of March.
Meanwhile, Nio in January announced the ET7 electric sedan, a Tesla Model 3 rival due next year, and it plans to expand into Europe in 2021. As Nio expands, Wall Street will watch the impact on margins and production costs. Gross margin improved to 17.2% in Q4 from -8.9% a year ago and 12.9% in Q3. Vehicle margin improved t0 17.2% from -6% a year ago and 14.5% in Q3.
Nio’s cash balance climbed to $6.5 billion at the end of the quarter vs.$3.3 billion in Q3.
Outlook: Nio sees Q1 deliveries of 20,000-20,500 vehicles, up 421%-434% from a year ago and up 15%-18% from Q4. Revenue is seen at $1.13 billion-$1.16 billion, up about 438%-451% from a year ago and up 11%-14% from Q4.
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Nio Stock
Shares dropped nearly 6% late after closing up 8.7% at 49.76 in Monday stock market trading. Nio stock remains under the 50-day line after a failed breakout past a 57.30 buy point, according to MarketSmith chart analysis. The relative strength line, which compares a stock’s performance vs. the S&P 500, for Nio stock bolted higher in 2019 and 2020 but is now below January 2021 highs.
Among other EV stocks, Li Auto gained 1.9% Monday and Xpeng Motors (XPEV), which reports March 8, rose 4.1%. Tesla added 6.4%.
Workhorse Group (WKHS) reversed sharply higher to finish up 7.2% despite a far wider-than-expected quarterly loss of 78 cents a share. The earnings miss added to woes after the EV-truck maker lost a key contract to make a new generation of USPS mail delivery trucks.
Subsidy cuts and rising competition from tech and legacy auto giants in China are also weighing on Nio stock and its EV peers. Tesla cut the price of its made-in-China Model Y, a rival to Nio’s new EC6 electric crossover. Meanwhile, the global chip shortage could also weight on EV stocks.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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