On Friday, Bernstein SocGen Group maintained a Market Perform rating for electric vehicle manufacturer NIO Inc. (NYSE: NIO) with a consistent price target of $5.00. The decision follows NIO's second-quarter financial results, which showed a revenue of RMB 17.4 billion.
This marks an increase of 98.9% year-over-year and 76.1% quarter-over-quarter. The rise in revenue was attributed to a significant growth in vehicle deliveries, which reached 57,400 units, up by 143.9% from the previous year and 90.9% from the prior quarter.
Despite the higher volume of sales, the average selling price (ASP) for NIO's vehicles saw a decrease of 10.5% year-over-year and 2.0% quarter-over-quarter, influenced by increased discounts and promotions during the second quarter.
However, the company's gross margin improved to 9.7%, with the vehicle margin reaching 12.2%, a notable rise compared to 6.2% in the second quarter of 2023 and 9.2% in the first quarter of 2024. This improvement was largely due to a better delivery scale.
NIO also reported advancements in other margins, which improved to -12.3% from -22.7% in the second quarter of 2023 and -18.4% in the first quarter of 2024, bolstered by after-sales services. Total operating expenses climbed to RMB 6.9 billion, marking a 12% increase year-over-year and a 17% rise quarter-over-quarter, driven by heightened research and development and selling, general and administrative expenses.
Consequently, the EBIT loss stood at RMB 5.2 billion, and the EBIT margin was reported at -29.9%, an improvement over -69.2% in the second quarter of 2023 and -54.4% in the first quarter of 2024.
The net loss for NIO was RMB 5.0 billion, translating to a net margin of -28.9%, which is slightly better than -69.0% in the second quarter of 2023 and -52.3% in the first quarter of 2024. The net loss saw a marginal 3% reduction from the first quarter of 2024. Looking ahead, the company's third-quarter guidance aligns with market expectations, projecting sales volume between 61,000 to 63,000 units and revenue estimated to be between RMB 19.1 billion to RMB 19.7 billion.
NIO is also preparing for the launch of its ONVO L60 model, with pre-sales having begun on May 15th at a price of RMB 219.9k. The official launch is slated for September 15th, with deliveries expected by the end of the month. The company has inaugurated 105 dedicated ONVO brand stores as of September 1st to support the new model launch.
However, concerns were raised about potential margin pressure due to product mix deterioration and rising selling expenses, with the final price of the ONVO L60 anticipated to be around RMB 200k, approximately 10% lower than the pre-sale price.
In other recent news, electric vehicle manufacturer NIO Inc. has reported impressive financial results for the second quarter of 2024, with a 98.9% year-over-year revenue increase to RMB 17.4 billion and a reduction in net losses by 2.5%. The company also maintained a steady vehicle margin of 12.2%.
For the third quarter, NIO has set a delivery target of between 61,000 and 63,000 units. Despite potential challenges from expanding sales channels and constructing new battery swap stations, NIO is optimistic about achieving a vehicle margin of 15% by the fourth quarter of 2024.
Jefferies has adjusted its price target for NIO to $5.10, maintaining a Hold rating, while JPMorgan upgraded NIO's stock rating to Overweight and increased its price target to $8.00. Tiger Securities reaffirmed its Buy rating and $8.00 price target, while Mizuho Securities reduced its price target to $5.00, maintaining a neutral stance. Citi also maintained a Buy rating with a $7.00 price target.
InvestingPro Insights
As NIO Inc. (NYSE: NIO) continues to navigate the electric vehicle market, recent data and analysis from InvestingPro provide a deeper understanding of the company's financial health and stock performance. NIO holds a market capitalization of $10.04 billion, demonstrating its significant presence in the industry. Despite the company's revenue growth of 30.94% over the last twelve months as of Q2 2024, challenges remain evident with a negative P/E ratio of -2.78, reflecting investor concerns over profitability.
InvestingPro Tips highlight that while NIO has more cash than debt on its balance sheet, it is quickly burning through cash, which could raise questions about long-term financial sustainability. Furthermore, analysts have recently revised their earnings upwards for the upcoming period, indicating potential optimism amidst the company's efforts to scale up production and sales. However, it is worth noting that NIO's stock price has been quite volatile, with significant returns over the last week and month, yet a considerable price drop over the last year.
For investors and analysts looking to explore NIO's financial landscape further, additional InvestingPro Tips are available, offering comprehensive analysis and metrics that can help inform investment decisions. With a total of 13 additional InvestingPro Tips listed for NIO, investors can gain a more nuanced view of the company's market position and future prospects.
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