-Published a stronger-than-expected set of Q1 2021 results, beating market expectations on both revenue growth and adjusted earnings, driven by surging luxury electric vehicle sales and rising margins. Nio delivered a total of 20,060 vehicles over the quarter, marking an increase of 423% year-over-year, helping revenues rise 482% to around RMB 8.0 billion ($1.24 billion). Gross profit margins were particularly strong, coming in at 19.5%, up from negative 12% a year ago, indicating that the company is getting better and more efficient at producing its vehicles. For perspective, the broader global auto industry sees gross margins of under 10%.
-Although Nio had a relatively solid Q1, the near-term outlook appears muted. While Nio says that it continues to see strong demand, it is facing production issues on account of the global semiconductor shortage, which has hurt the automotive industry particularly badly. Nio says that deliveries for Q2 are projected to stand at between 21,000 and 22,000 vehicles, marking a sequential growth of just about 10% on the upper end.
-Nio stock is priced for robust growth, trading at about 10x 2021 forward revenue, and if the supply crunch in the semiconductor market persists through this year, holding back delivery growth, investors will likely re-rate the valuation of the stock lower.
-Currently with the given market condition our target price for Nio is standing at $30.
-Although Nio had a relatively solid Q1, the near-term outlook appears muted. While Nio says that it continues to see strong demand, it is facing production issues on account of the global semiconductor shortage, which has hurt the automotive industry particularly badly. Nio says that deliveries for Q2 are projected to stand at between 21,000 and 22,000 vehicles, marking a sequential growth of just about 10% on the upper end.
-Nio stock is priced for robust growth, trading at about 10x 2021 forward revenue, and if the supply crunch in the semiconductor market persists through this year, holding back delivery growth, investors will likely re-rate the valuation of the stock lower.
-Currently with the given market condition our target price for Nio is standing at $30.