Let's talk about nio! This stock has
dropped like a rock over the past year
but hasn't gone too far in this video i
will look at the pros and cons of
investing in nio stock and find true value.
First of all I am bullish on nio in the
long run but I do have concerns too and
in this video I will discuss recent
developments and I will analyze the real
possibilities that exist for this
company going forward I will look at the
reasons for the stock dropping as well
as reasons why and more importantly when
it will go back up and by how much in
both the short term and the medium term
if this is something that you like a
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company then please smash the like
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if you've invested in nio stock what
price did you buy it or what price are
you looking to buy in at
now let's get into it
why nio is a contender and not a
pretender. #nio
This article discusses why you can
safely ignore those that compare NIO to
x-ping and leotto the company is getting
positioned for a potentially significant
2022 run
and its production capacity could reach
600 000 by the end of the year
first of all something that is commonly
suggested is that nio is a direct
competitor with x-ping and li auto this is
simply not true other than the fact that
they are all tvs now i've spoken about
this in a previous video each company
targets a different demographic
nio competes in the high end of the
market and therefore deliver less cars
than lower priced ev companies
now this is not just relevant to the ev
sector think of traditional legacy ice
brands for example
who do you think has greater sales
numbers the likes of ferrarI or
lamborghinI compared to ford or toyota
in 2021 toyota overtook forward as the
leading care brand in the united states
based on vehicle sales delivering around
1.9 million units to u.s customers that
is just the united states and not even
the rest of the world compare this then
to ferrari
who sell about 8,400 vehicles worldwide
each year but this logic applies to
every industry for example who do you
think sells more wrist watches in a year
the likes of a budget brand such as
casio or a luxury brand like rolex
comparing these is of no value so why do
people insist on comparing nio to the
brands that are operating in different
market segments
NIO is operating in the luxury brand
segment in 2021 nio sold its vehicles at
an average price of sixty eight thousand
dollars while x-ping sold in a range of
twenty-five to thirty five thousand
instead of comparing nio to these
companies nio should be compared to its
real competitors which are the luxury
brands such as bmw mercedes or audI and
i've spoken about this in other videos
so i'm not going to go over it again
when the time comes that these ice
brands focus more on the ev sector then
these will become
the real comparison companies guys if
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do you think that nio should be compared
to other ev manufacturers or to other
luxury manufacturers such as bmw or audi
and if you want to support my work check
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opportunities
although nio's figures for january of
9600
was a year-over-year increase of 33 it
was actually down compared to december
and there is a number of reasons for
this first of all while it might appear
that the company is slowing down what's
happening is it has been revamping its
production facilities in preparation for
growth and demand for its existing
vehicles as it gets ready to launch two
new vehicles in 2022
add to that that it's building out its
battery as a service infrastructure and
you have a temporary situation that will
drive extraordinary growth in the coming
months ahead
another reason that has been suggested
is the chinese consumers have been
rushing to book their new evs before the
next round of reduction in china ev
subsidiaries from january
china's ev subsidies were reduced by
another 30 percent
in 2022 before being completely phased
out in 2023 it means that new evs
will have become far more expensive this
year nio said the buyers who would pay
the deposit on or before december 31st
and are taking delivery of their
purchases before march 31st can still
enjoy the subsidies under the 2021 plan
and I would assume that this will be the
same for leoto and xping because NIO
targets the premium segment the impact
on sales should be less pronounced but i
think that this could be a big factor in
the huge growth figures of the two
budget brands in q4 and in january by
june 2022 the company should be able to
produce 300 000 vehicles while by the
end of the year that should rise to
close to 600 000 compare that to the
current 10 000 per month we are going to
see huge increases
and with nio set to release
a lower cost model later in 2022 when
all of this comes together nio is going
to be a significant force to be reckoned
with
of course it wouldn't be fair
to not speak of some of the risks at the
moment eevee stocks in general are
taking a bashing right now with nio
recently hitting its 52-week low
of only 19 last week and that could
easily happen again I would look closer
at this in the technical analysis in a
minute so stick around for that
there is the hope that the chip
shortages that have dogged the past 12
to 18 months will end in 2022 but if
this was to continue then it would cause
huge production issues
in general across a broad range of
industries
then there are the issues that everyone
is talking about time and time again
such as china stocks the fed de-listings
interest rates are a stock market crash
the market right now is affecting the
big boys for the first time
facebook amazon
netflix
and paypal
dropping in the past weeks
for any investor outside of the top 10
or 20 biggest stocks in the market then
this crash has been going on for the
past 11 or 12 months this is not new
looking at market beat we can see that
nio is near the bottom of both its
50-day and 52-week range
average trading volume
is 57 million
but today is less than 2 million this is
not correct today's trading volume so
far
is 41 million making nio one of the
highest traded stocks on the market
today and yesterday's volume was over 55
million
as we can see the consensus price target
is 57
while the most recent price targets were
set within the past three weeks of
54.37
significantly
86 research have upgraded nio stock from
a cell to a boy
NIO is said to report its q4 and full
year 2021 earnings in march but looking
at the most recent financial statements
we can see that nio has assets of 10.7
billion
liabilities of 6.4 billion which is
about 1.6 to 1
so the nio balance sheet is very strong
and has total equity of 3.8 billion for
the latest three months nio had revenue
of 1.5 billion
and about 3.5 billion so far this year
given that the company's current market
capitalization is about 38 billion
dollars this gives nio a price to sales
ratio of about seven to one which is
quite good
NIO is expected to generate
about 10 billion dollars in revenues
this year and 15 billion in revenues the
following year
but this could be viewed as a low
estimate given the level of growth
expected expansion into europe and the
overall huge increase in production
levels in total the current market cap
of 38 billion
nio has a future price to sales of only
3.6 and 2.4 for the following year which
is very low
keep an eye on nio's earning report
which is due
on the 7th of march where revenue is
expected to be 1.53 billion and an eps
of minus 14 cents I feel that due to
october's very low deliveries
where october seen the lowest deliveries
of any month in 2021 we might see nio
fail to meet the expectations and this
could see the price drop even further
but that would put nio even further into
deep value
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looking at trading view over the past
year we can see that nio stock has gone
from the highs of 60s
right down to just 19 last week
this is a price that I did not see nio
dropping to so early in the year but as
we know the market is crazy right now
in my opinion I think that nio is
undervalued at the current price but
unless the market makes a sudden
recovery then I think that it is
unlikely that nio will return to
anywhere near january 2021 highs anytime
soon
going by the current market trend I feel
that nio is about to gain somewhere
between 20 and 30 in the coming weeks
but if the market remains overall
bearish the NIO will probably drop down
again as the year progresses
although I feel that at 24 right now nio
does represent great value I do think
that nio will drop more before the
overall market begins to recover which i
predict won't happen until q2 at a
minimum
in my opinion anything between
17 and 20 dollars should be seen as
incredible value to get into nio shares
and honestly I don't see any way that
nio drops below this range unless
something incredibly disastrous happens
on a global scale
so guys that brings us to the end of the
video if you appreciate this type of
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help me grow this channel
as I said a moment ago I think that this
is a great entry price into NIO and
looking at the chats I feel that we are
about to see a nice gain in the coming
weeks but overall market sentiment could
pull this stock down lower as the year
progresses there is a lot of fear in the
market right now and two of my favorite
investment quotes come to mind from
warren buffett
be fearful when others are greedy and
greedy when others are fearful and from
baron rothschild the time to buy is when
there's blood in the streets even if
that blood is your own
and there is certainly a lot of blood in
the streets right now remember
this is not financial advice and i
highly recommend investing only money
that you can afford to after all it is
you that will enjoy the gains or suffer
the losses of your decisions so please
always do your own due diligence when
investing if you're new subscribe turn
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the next one