By many reports, Nio (NYSE:NIO) had a fine 2020, which was a feat in and of itself given just what 2020 looked like. The latest delivery reports out of the company suggest that 2020 was not a one-shot event for Nio, and that the company may yet have some room to grow. As it turns out, 2021 is starting to look as good for Nio as 2020 did, on the strength of plenty of new deliveries.
One Big Percentage Gain
Nio, according to its delivery reports, delivered 7,225 vehicles for the month of January. That may not sound like much objectively, but on a percentage basis, it's enough to represent a huge leap forward for the company.
Back in January 2020—before the coronavirus mess even really got started---the company posted less than a third that number, as the 7,225 delivered in January 2020 represented a 352.1% increase for the company. That lent a likewise huge boost to the company's cumulative delivery totals, which as of January 31 represented 82,866 vehicles delivered in the ES8, ES6, and EC6 product lines.
Breaking down the product lines individually, meanwhile, seems to show that consumers preferred the smaller versions of Nio electric vehicles. Out of the 7,225 delivered, 1,660 were the ES8 model, which represent the company's larger six-seat and seven-seat flagship models. Meanwhile, the company shipped 2,720 ES6 models, the five-seat high-performance model, as well as 2,845 EC6 models, which are five-seat coupes.
Analysts Skeptical For Further Gains
The broader analyst pool—based on our latest research—is a bit more hesitant about taking on further shares in Nio, and potentially with good reason. The company is currently rated a “hold” as it has been for the last six months, and in the most recent updates, the sentiment is starting to turn bearish.
Six months ago, Nio had two “sell” ratings, four “hold” and two “buy” to its credit, a perfect “hold” ratio setup. That improved substantially as figures from three months ago shifted to two “sell”, four “hold” and six “buy”. Further improvement arrived a month ago as the ratios shifted again to one “sell”, four “hold” and seven “buy.” Now, we're at one “sell”, seven “hold” and nine “buy.” So you can see a slight turn toward bearish sentiment between last month and this month.
The price target, however, has been steadily climbing in that same period. Just six months ago, the consensus price target stood at $5.01. Three months ago, it jumped to $18.81. A month ago it stood at $30.91, and now today, it sits at $46.48, which is still slightly under the current share price of $58 even as of this writing.
Too Much Gain Too Soon?
The hesitation surrounding buying in on Nio seems to be less connected to the company's fundamentals than it is to the company's current share price. It's not that buying Nio is a bad idea. Far from it; the company has already demonstrated its ability to not only deliver a quality product, but also a fairly decent quantity of it. Admittedly, by comparison, Nio is barely scratching the surface of a company like Ford (NYSE:F), who sold 149,931 units in November 2020, and that represented a 21% drop.
The problem, however, is that Nio stock has been run up quite a bit. While Ford is selling better than 20 cars for every one Nio delivers, Ford's share price is down around $10.64 as of this writing. A company with 20 times the sales, not to mention longevity in the field and massive worldwide name recognition is only worth about a fifth as much in share prices?
Nio share prices have also been seen slipping in the last several days; the company was up around $63 not so long ago, before sliding back to current levels. That's likely the biggest point that has the analyst pool shifting to hold; it's not that the company is flawed, somehow, but rather that it's been subject to substantial run-up and is starting to peel away.
Nio occupied an unusual place in the market. For a while, it was seen not so much as an electric vehicle maker, but rather as Tesla's (NASDAQ:TSLA) first significant competition. That likely led to some getting in because they were looking for a similarly meteoric rise. Since that rise hasn't materialized as yet, there's likely to be some profit-taking, and some further backsliding on Nio's share price. By all means, consider picking up some Nio stock. It is still one of the biggest names in electric vehicles around outside of Tesla itself; the delivery numbers make that clear. However, consider waiting before picking up your shares as the share price appears to be settling toward its natural level
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