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Nio (NYSE: NIO), one of the leading electric vehicle (EV) makers in China, posted a messy third-quarter earnings report on Nov. 20. Its revenue dipped 2% year over year to 18.67 billion yuan ($2.66 billion) and missed analysts' estimates by 0.47 billion yuan. Its net loss widened from 3.95 billion yuan to 5.06 billion yuan ($721 million), or 2.14 yuan ($0.31) per American depositary receipt (ADR) -- which also missed the consensus forecast by 0.22 yuan.
Those headline numbers were disappointing, but Nio's stock barely budged after the report. That might be because its stock already sank nearly 50% this year and remains more than 25% below its initial public offering (IPO) price. So should you buy, sell, or hold Nio's stock today?
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What sets Nio apart from its competitors?
Nio sells a wide range of electric sedans and SUVs. It sells most of its vehicles in China, but it's been gradually expanding into Europe. It stands out from the competition because its batteries can be quickly swapped out at its battery-swapping stations.
Nio's namesake ET, ES, and EC-series vehicles target the premium market. Its Onvo sub-brand sells cheaper smart vehicles, and its new Firefly sub-brand will roll out its first plug-in hybrid electric vehicles (PHEVs) for overseas markets in 2026.
How fast is Nio growing?
Nio started delivering its first vehicles in 2018. It attracted a lot of attention when its deliveries more than doubled in 2020 and 2021, but it lost its momentum in 2021 and 2022 as China's EV market cooled off. Macro headwinds, weather-related disruptions, and intense competition exacerbated its slowdown.
| Metric | 2019 | 2020 | 2021 | 2022 | 2023 | 9M 2024 |
|---|---|---|---|---|---|---|
| Deliveries | 20,565 | 43,728 | 91,429 | 122,486 | 160,038 | 149,281 |
| Growth (YOY) | 81% | 113% | 109% | 34% | 31% | 36% |
Data source: Nio. YOY = Year over year.
But in the first nine months of 2024, Nio's deliveries accelerated again. That acceleration was driven by its strong sales of ET-series sedans and Onvo smart vehicles in China, as well as its expansion into Europe. By the end of October, its year-to-date deliveries had risen 35% year over year to 170,257 vehicles.
Nio expects to deliver 72,000 to 75,000 vehicles in the fourth quarter of 2024, which implies its full-year deliveries will grow 51% to 53% from 2023. Analysts expect its revenue to grow 25% for the full year and rise 42% in 2024. Based on those expectations, Nio's stock looks dirt cheap at a price-to-sales ratio of less than 1. By comparison, Tesla trades at 9 times next year's sales.