Nio Inc (NIO) Potential DownTrend Despite Q4 Deliveries Better Than Guidance

The company is predicted to post an EPS of -$0.51, indicating constancy compared to the equivalent quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $2.29 billion, showing a 1.86% drop compared to the year-ago quarter.

Technical is showing a downtrend for Nio, and this is pretty understandable, with a loss of 51 cents, this will put NIO in a pretty unfavorable position against the Top EV makers from China, and we might be seeing NIO trending downwards further.

NIO RSI does not look good as we are seeing it trending towards oversold, this is a signal I personally sense it for a stock going to experience some selling. It is not oversold yet.

But if the guidance for 2024 could come in more positive, we could see NIO making a comeback and there should be some increase in the RSI towards the overbought. This could bring traders and investors back into buying and LONG sentiment.

Nio delivered 50,045 vehicles in the fourth quarter, exceeding the upper end of its previous guidance range of 47,000 to 49,000 vehicles.

Nio (NYSE: NIO) saw deliveries rebound in December, putting fourth-quarter deliveries above previous guidance. The Chinese electric vehicle (EV) maker delivered 18,012 vehicles in December, the third-highest on record behind July's 20,462 and August's 19,329, according to data it released today. That's up 13.89 percent from 15,815 vehicles in the same period in 2022 and up 12.86 percent from 15,959 in November.

NIO last reported earnings on 05 Dec 2023 before the market opened (BMO). NIO shares gained +1.5% the day following the earnings announcement to close at 7.43. Following its earnings release, 89 days ago, NIO stock has drifted -22.2% lower.

From the time it announced earnings, NIO traded in a range between 5.30 and 9.57. The last price (5.78) is closer to the lower end of range.

Estimated implied straddle for upcoming earnings is 13.3%. If we look at how it has performed in the last reported earnings, there is a pretty slow increase in the number of deliveries and NIO gained only 1.5% after posting a better-than-expected earnings.

The options market overestimated NIO stocks earnings move 100% of the time in the last 12 quarters. The predicted move after earnings announcement was ±9.5% on average vs an average of the actual earnings moves of 4.4% (in absolute terms).

Option valuation is showing overvalued by quite a high percentage, this might signal price volatility on the downside if Nio were to perform less-than-expected by the market, we need to remember that deliveries figure might be good, but the company may still suffer from overhead expenses.

NIO might suffer a price volatility as there are competition in the EV market despite there is slower demand after the holiday. There should be some expectations from NIO on how they planned to navigate 2024.

Could we be seeing more partnership or merger with smaller EV makers?

Appreciate if you could share your thoughts in the comment section whether you think NIO would be able to reverse it stock price trend with a positive 2024 guiance.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.