How to Trade NIO After Fiscal Q4 2023 Performance

April 15, 2024 11:52 am

Headquartered in Shanghai, NIO is a Chinese electric vehicle (EV) maker. On top of creating EVs, it also develops battery-swapping stations. Before the boom in AI-related companies, there had  been much hype regarding the growth of the EV market. Learn more about NIO’s most recent earnings report and what analysts are forecasting for the stock.

Stock: NIO Inc
Symbol for Invest.MT5 Account: NIO
Date of Idea: 12 March 2024
Time Line: 1 – 6 months
Entry Level: $6.50
Target Level: $10.40
Position Size for Invest.MT5 Account: Max 5%
Risk: High
  • The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.

All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose, as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing. 

NIO Fiscal Q4 2023 Performance

Here are some of the key highlights from the latest fiscal fourth-quarter 2023 earnings report from NIO: 

  • Total quarterly revenue of $2.41 billion, lower than analyst forecasts and lower than the same time last year 
  • Gross profit of $180 million, an increase of 105.7% from the fourth quarter of 2022 but a 16.0% decrease from the third quarter of 2023 
  • Annual net loss of $2.9 billion 
  • Cash reserves of $8.1 billion 
  • 50,045 vehicle deliveries in fourth quarter 2023 
  • 160,038 vehicle deliveries for 2023, up 30.7% from 2022 

NIO’s earnings report missed analyst expectations on most metrics but has seen some areas of growth year on year. Overall sales grew 4.6% year-over-year and the company shrank its net loss. It also beat its own sales projection for the fourth quarter of 2023.  

However, while the annual net loss has shrunk, NIO chief financial officer Steven Feng said the focus is now to “optimize cost management.” No new major product launches have been announced by NIO for this year, unlike its rivals such as Xpeng and Li Auto.  

Currently, NIO’s stock is primarily made up of premium sport utility vehicles. It is expected to launch a new mass-market vehicle brand that can compete with Tesla’s Chinese-built models. Deliveries are not expected until the fourth quarter of 2024.  

Even though NIO cut 10% of its workforce and has spun off some non-core business entities, it signed a deal with CYVN Holdings – an entity controlled by the Abu Dhabi government – for a cash injection of $2.2 billion for a 20.1% stake.  

In the broader picture, the Chinese EV market has slowed down significantly. The slowdown has been attributed to deep price cuts led by market leader BYD. While sales have increased in the sector, margins are now significantly lower.  

There are also larger looming issues for Chinese EV makers. Authorities in Europe have launched an investigation on whether or not Chinese EV makers unfairly benefitted from state subsidies, while the US has begun a probe into whether Chinese vehicles could be used to spy on US citizens.   

These issues are why analyst forecasts on the stock is mixed, as seen below.

NIO Stock Forecast – What do the Analysts Say?

According to analysts polled by TipRanks for a NIO stock forecast in the past 3 months, there are currently 5 buy, 6 hold and 1 sell ratings on the stock. The highest price level for a NIO stock forecast is $10.40 with the lowest price target at $4.80. 

The average price target for a NIO stock forecast is $7.02.

Source: TipRanks, 12 March 2024

An Example Trading Idea for the NIO Stock Price

An example trading idea for the NIO share price could be as follows:  

  1. Buy the stock on a break above the post-earnings high at $6.50 to allow for volatility. 
  2. Target just below the highest analyst price target of $10.40. 
  3. Keep your risk small at a maximum of 5% of your total account.   
  4. Time Line = 1 – 6 months  
  5. If you buy 10 NIO shares:  
    1. If target is reached = $39.00 potential profit [($10.40 – $6.50) * 10 shares].

Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering the stock is still down around 90% from its all-time high.

Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.

With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. This means buying 10 shares in NIO stock would result in a commission of $0.20 ($0.02 * 10 shares) for executing a per-side transaction.

There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall! 

How to Buy NIO Stock in 4 Steps  

With Admirals, you can buy shares with a low commission of just $0.02 per share and a low minimum commission of just $1 on US-listed stocks. 

  1. Open an account with Admirals to access the dashboard.   
  2. Click on Trade on one of your live or demo accounts to open the web platform.   
  3. Search for your stock in the search window at the top right to view the live price chart. 
  4. Click Create New Order from the bottom of the screen to open the trading ticket. 
Source: Admirals MetaTrader 5. NIO. Monthly. Date: January 2017 to March 2024, captured on 12 March 2024. Past performance is not a reliable indicator of future results or future performance.

Click on the banner below to trade NIO stock today ▼▼▼ 

Do You See the NIO Stock Price Moving Differently?   

Remember that all analytics and trading ideas are based on the personal view and experience of the author.

If you believe there is a higher chance NIO share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.

The Trade.MT5 and Trade.MT4 account allows you to speculate on the price direction of stocks and shares using CFDs.

This means you can trade long and short to potentially profit from rising and falling stock prices.

INFORMATION ABOUT ANALYTICAL MATERIALS:   

The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals’ investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following:   

  • This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.    
  • Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content. 
  • With a view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for the prevention and management of conflicts of interest. 
  • The Analysis is prepared by an independent analyst, Jitanchandra Solanki (analyst), (hereinafter “Author”) based on their personal estimations.    
  • Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.    
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