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Nio stock tanks 15% on Q4 earnings: buy the dip or sell the rip?

admin by admin
March 21, 2025
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Nio stock tanks 15% on Q4 earnings: buy the dip or sell the rip?
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Nio Inc (NYSE: NIO) tanked as much as 15% in premarket on Friday after the EV maker reported disappointing earnings for its fourth quarter.

The company based out of Shanghai, China generated RMB19.7 billion ($2.7 billion) in revenue in its recently concluded quarter on RMB3.17 of per-share loss.

Analysts, in comparison, were at RMB20.81 billion and RMB2.12 a share, respectively. Including today’s decline, Nio stock is now trading well below the price at which it started 2025.

Nio stock tanks on downbeat future guidance

Nio saw weakness in its Q4 primarily due to higher operational costs amidst a focus on growing its battery-swapping network and introducing new vehicles in its key markets.

Investors are punishing the EV stock this morning also because its management’s guidance for the future failed to impress them as well.

Nio expects its revenue to fall between RMB12.37 billion and RMB12.86 billion in the fiscal first quarter – well below RMB16.73 billion that experts had called for.

Additionally, the EV maker forecasts up to 43,000 deliveries in Q1, also massively below analysts’ estimates of a tad above 65,000.

Note that Nio shares do not currently pay a dividend to remain attractive for investors amidst the ongoing weakness either.

Nio has been gaining market share in China

For Q4, the Chinese electric vehicle manufacturer reported a 45% annualised growth in deliveries to a record 72,689. However, analysts had called for an even better 73,207 instead.

Nio did improve its vehicle margin in the recently concluded quarter as well from 11.9% to 13.1% – but that also missed (marginally) experts’ forecast of 13.2%. Still, William Bin Li, the company’s chief executive told investors today:

Throughout the year, Nio brand maintained its position as the leader in China’s BEV market for vehicles priced over RMB0.3 million, capturing a 40% market share.

Nio’s affordable, family-oriented EV, the Onvo L60, has steadily improved its market share to land a spot on the list of China’s top 3 BEV sports utility vehicles (SUV) priced under RMB0.3 million, he added.

But none of it has helped Nio stock of late, given that it’s down more than 35% versus its 52-week high at the time of writing.

Is it worth buying Nio shares on the pullback?

Nio’s earnings arrive only days after the Chinese electric vehicle maker announced a strategic team up with CATL in pursuit of expanding its battery swapping network.

Still, Eunice Lee – a Bernstein analyst remains cautious on Nio shares.  

Lee reiterated her “hold” rating on the EV stock this week. The analyst’s $4.50 price target suggests investors shouldn’t count on a swift recovery in Nio stock following the post-earnings decline.

Some of the weakness in NIO is also related to Trump tariffs and the possibility of a full-blown trade war in response ahead.

The post Nio stock tanks 15% on Q4 earnings: buy the dip or sell the rip? appeared first on Invezz

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