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NIO Prepares To Report Fourth Quarter Results As Stocks Retreat From Recent Highs
In the electric vehicle (EV) industry, profitability has often trumped future expectations. So when Chinese electric vehicle maker NIO Inc (NYSE: NIO) opens the hood next week, investors will likely be more interested in its prospects for revenue and vehicle deliveries than the losses the company has lost over the course of the year. of the quarter. unless there is a huge misfire or a big surprise, of course. Earlier this year, NIO said it delivered a record 17,353 vehicles in the fourth quarter. While this is small compared to Tesla Inc’s (NASDAQ: TSLA) 180,570 deliveries in the quarter, the NIO count represents a 111% year-over-year increase and beat the end of its forecast of 16,500 to 17,000 vehicles for the quarter. Speculative and Fundamental Drivers While increasing deliveries are encouraging for NIO bulls, the company has been in the red. In other sectors, you can expect modest stock price action for a losing company with negative price-to-earnings ratios. This is not the case for NIO. The stock’s gains accelerated last year and early this year, hitting a record high of around $ 67 in January. The stock started 2020 around $ 4 (see Figure 1). FIGURE 1: HIGH VOLTAGE. As a percentage, shares of Chinese electric vehicle maker NIO (NIO – candlestick) have given Tesla (TSLA – purple line) a run for its money in the past year. NIO and TSLA have lost some of their juice in recent days, however. Data sources: Nasdaq, NYSE. Source of the graphic: the thinkorswim® platform. For illustrative purposes only. Past performance is no guarantee of future results. Part of that astonishing gain likely came from general market dynamics amid low interest rates, accommodating central banks, real and anticipated coronavirus stimulus, and anticipation of a post-vaccination recovery. There may also have been an element of investors chasing momentum in a hot stock. Securing $ 1 billion in funding from Chinese state-owned enterprises also helped. It can also be argued that there could be more fundamental tailwinds helping the NIO stockpile to hit the accelerator in 2020. The demand for electric vehicles has increased as the battery life lengthens, as the costs decrease, more charging stations are built and environmental concerns grow more. public awareness. But when it comes to EVs, investor optimism about manufacturers’ potential can make companies appear larger than life. Call it the Tesla Effect because investor optimism has helped make this company the most valuable automaker on the planet in terms of market capitalization. Yet like the vehicles it manufactures, NIO stocks cannot accelerate indefinitely. After hitting the record high in January, stocks fell sharply. Some of it may be profit taking and fresher buds before its results are released. There may also be some caution regarding the tariff relationship between the United States and China, the world’s two largest economies. NIO earnings and options activity When NIO reports results after the close on Monday, March 1, it is expected to report a loss of $ 0.07 per share, according to estimates from third-party consensus analysts. Revenue is projected at $ 1.01 billion, up 148% from a year ago. Note: Consensus should perhaps be marked with an asterisk, as only a handful of analysts cover the business. The options market has integrated an expected evolution of the share price of around 11.5% in both directions around the publication of the results. Implied volatility is at the 25th percentile as of Friday morning. Looking at the options expiration on March 5, selling activity was the highest in both the 35 and 40 strikes. But more activity was seen on the rise, particularly in the 50 and 60 hit calls. Note: Call options represent the right, but not the obligation, to buy the underlying security at a predetermined price over a specified period of time. Put options represent the right, but not the obligation, to sell the underlying security at a predetermined price over a specified period of time. Investors Plug In In addition to earnings data, next week investors may be looking for new directions from the company. Top of the list: They’ll likely be tuned in for an update on NIO’s battery tech. Batteries are the backbone of the electric vehicle market, as more efficient batteries that can store more energy mean vehicles can last longer without being recharged, giving drivers more peace of mind. In January, NIO unveiled its first sedan, called the ET7, which boasts a range of over 500, 700 or 1,000 kilometers depending on the battery. Investors will likely want to know how pre-orders are going for this vehicle, with deliveries expected to begin next year. Investors are probably also eyeing the competition. The field of the electric vehicle market has become increasingly crowded, with new interest not only from legacy auto companies and electric vehicle startups, as well as from big tech players such as Apple Inc (NASDAQ: AAPL) and Amazon.com, Inc. (NASDAQ: AMZN). Room for everyone? However, despite the increasingly bulky field, the cake is quite big (and should get bigger). Even though NIO has never ventured outside of China, the world’s largest electric vehicle market is a pretty big playing field. In a recent report, technology market analysis firm Canalys forecast that 1.9 million electric vehicles will be sold in China this year, up from 1.3 million in 2020. As a Canalys executive noted in the comments accompanying the report: “With a share of only 6.3% of all passenger cars sold in China in 2020, electric vehicles have many years of growth ahead. TD Ameritrade® reviews for educational purposes only. SIPC member. Options involve risk and are not suitable for all investors. Please read the features and risks of standardized options. Photo by Vlad Tchompalov on Unsplash See more BenzingaClick here for options trading from BenzingaTesla, Apple has been pounding since late January, but energy and finances show LifeYield sign Flashing: cash surge 10 years above 1.5% of the Spooks market during the Thursday sale © 2021 Benzinga .com. Benzinga does not provide investment advice. All rights reserved.
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