Nio stock price has gone parabolic this week as investors bought the dip ahead of its closely watched earnings. The stock surged to a high of $5.35 on Tuesday, its highest level since December 9, and 32% above its lowest level this year. So, what’s next for the Nio share price after the recent surge?
Nio stock jumps ahead of earnings
Nio, the Chinese Tesla rival, has done well in the past few days. This rebound happened after it was reported that it was implementing another round of layoffs in a bid to boost its profits. Reports show that the firm trimmed layoffs by about 10%.
These layoffs came as the company prepares to report its financial results next week. The data will provide more information about its business and a guidance on what to expect.
Analysts are upbeat about these numbers even as the mass market ONVO brand missed expectations. The most recent delivery numbers showed that Nio delivered 13,192 vehicles in February, with ONVO delivering 4,092 vehicles.
The company’s guidance was that it would deliver 15,000 vehicles in January and February, 20,000 in March, and 30,000 in March. Missing these targets mean that Alan Ai, may exit the company since he has not been seen in public for a while. He had previously promised to resign if the brand failed to hit its target.
The most recent quarterly data shows that Nio delivered 72,689 vehicles in the fourth quarter, a 45.2% annualized increase. That surge brought its cumulative deliveries to about 671,564.
The delivery numbers meant that the company’s business is still seeing strong demand even as the EV industry becomes saturated. Most notably, the surge in deliveries is happening at a time when Tesla’s deliveries have started to fall.
Analysts are optimistic about Nio earnings
Wall Street analysts are upbeat about Nio’s business now that its vehicle deliveries have continued rising.
The average estimate is that the company’s revenue rose by 18% in the fourth quarter to 20.19 billion CNY, a 18% increase from what it made a year earlier. This is a good performance considering that Tesla recorded a modest growth during the quarter.
The numbers will bring the annual revenue to 68.4 billion CNY. Analysts expect Nio’s business to explode this year, with the annual revenue jumping to 97.65 billion CNY, a 42.68% increase. ONVO and the upcoming Firefly brand will help to supercharge this growth.
Most importantly, Nio has continued to grow its margins, a trend that may go on this year after the 10% layoffs.
Also, the loss per share trend is expected to improve significantly. The fourth quarter loss per share is expected to come in at $2.36, an improvement from the $2.81 it lost in the same period a year earlier. The annual loss per share will be $9.47, followed by $7.61 next year.
Nio stock price analysis
The Nio share price has rebounded in the past few days, as we predicted here, here, and here. It bottomed at $4.02, where it formed a double-bottom pattern.
Nio stock has moved above the 50-day Exponential Moving Average (EMA) and the 61.8% Fibonacci Retracement point. The MACD indicator has moved above the zero line, while the Relative Strength Index (RSI) has moved nearly the overbought point.
The stock has formed a cup-and-handle pattern, a popular continuation sign. Therefore, the stock will likely keep rising as bulls target the $6.15, the 38.20% retracement level.
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