Nio's price sits at the $39 support after a decline yesterday from earnings release. I believe this is an unwarranted selloff as the companies' fundamentals remain strong and its growth still largely unhindered by the shortage of chips in the semiconductor industry. It only narrowly missed analyst expectations even after having to halt production at one of its plants for 5 days in late March.
Next strong support is at the $34-35 area, where we could see a strong rebound back to $50 in the later half of the year.
Here are the key metrics from the earnings release:
Nio Inc. late Thursday reported quarterly results and sales that were above Wall Street expectations.
NIO's vehicle deliveries rose 422.7% compared to the year-ago quarter, marking the fastest pace of growth since Q2 FY 2019.4 Vehicle sales for the quarter were 7.4 billion yuan ($1.1 billion), up 489.8% from the same three-month period a year ago. The company attributed the higher vehicle sales to higher deliveries and higher average selling prices.
Vehicle margin, a measure of profitability, rose to 21.2% in the first quarter, up from 17.2% the prior quarter. The increase was due mostly to consumers buying Nio’s driving assistance software and upgrading to a more expensive battery subscription plan. NIO's vehicle deliveries, which were reported earlier this month, came in at 20,060 for the quarter, narrowly missing what analysts had expected.
NIO expects to deliver between 21,000 and 22,000 vehicles in Q2 FY 2021. It also expects total revenues for the second quarter to be between 8.1 billion yuan ($1.2 billion) and 8.5 billion yuan ($1.3 billion), representing a year-over-year (YOY) increase of between 119.0% and 128.7%.