Nio Share Price Forecast March 2022 – Time to Buy NIO?
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Shares of Chinese multinational automobile manufacturer NIO (NYSE: NIO) are in the red today, after closing at $20.26 as of March 21st (19:59 EDT). The company is set to release its fourth quarter and full year numbers on Thursday, which is one of the most anticipated reports of the season in the electric vehicle (EV) industry. Momentum for NIO shares was building until last week, after which they plunged.
Nio – Technical Analysis
According to the financial statement released by Nio, the company’s market cap is at $34.215 billion with total assets worth $10.679 billion. Revenue for 2020 was at $2.36 billion with a profit margin of -34.51% compared to $1.13 billion in 2019.
Moving averages such as Exponential Moving Average (10)(18.83), Simple Moving Average (10)(17.97), Exponential Moving Average (20)(19.68) and Simple Moving Average (20)(19.36) are indicating a buy action. Oscillators such as Relative Strength Index (14)(49.36), Stochastic %K (14, 3, 3)(70.33), Commodity Channel Index (20)(32.73), Average Directional Index (14)(26.62) and Awesome Oscillator(−3.46) are neutral.
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Recent Developments
Nio was one of the most hyped companies to debut in the US stock market last year. However, the company soon ran into several negative catalysts. It started with a decrease in deliveries last October, followed by a cut in Chinese government subsidies on new energy vehicles at the beginning of 2022. Lastly, the threat of Chinese companies getting delisted from US stock markets also weighed in heavily on investor sentiment.
Nio delivered 25,043 vehicles in Q4. But this number can decrease for the next quarter, as it has only delivered 15,783 EVs in January and February combined. Nio is still on track to initiate deliveries of the flagship ET7 sedan on March 28. It is taking reservations for its ET5 sedan as well. The company has future plans to launch a new model and start expansion into at least three new European countries this year.
Nio stock got listed in Hong Kong on March 10th, which reflects management’s agility in the face of the SEC’s new rule. The company’s deliveries increased by 9.9% year over year, compared to 33.6% year over year growth in the month before. Nio’s local rival XPeng opened its first store in the Netherlands and started taking reservations for its P5 sedan.
There is also a rumour about Nio partnering with BYD. Reports indicated that BYD Chairman Wang Chuanfu was reportedly spotted with Nio’s CEO William Li.
Should You Buy NIO Shares?
Investors should expect positive metrics from the upcoming results. The company could see decreased gross margins and wider losses. This is due to intense ongoing cost pressures on auto manufacturers as the prices of raw materials like nickel and key parts like batteries have risen. The company has confirmed that it will not increase its prices.
However, Nio can take the decision to raise the price of its battery-as-a-service (BaaS) subscription. This will allow customers to purchase a Nio vehicle without batteries at a lower price. They can also charge or rapidly swap out batteries on demand for a monthly fee. Investors should thus keep an ear out for any updates regarding the upcoming earnings conference call.
Nio’s financial condition is improving after liquidity and debt fears decreased NIO shares. It has significantly delivered huge top-line gains while parring losses. With Nio shares at their lowest levels in more than a year, it can serve as a good entry point for interested investors.
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