The Nio stock price has been under intense pressure in the past few months as concerns about its growth remain. The stock has also slumped in line with the performance of other Chinese stocks in the United States as fears of delisting remain. As a result, NIO share price is trading at $23.21, about 65% below the highest point in 2021.
Like other Chinese companies, the overall sentiment for the Nio stock price has been relatively weak in the past few months. The stock has dropped by over 60%, bringing its total market capitalization to more than $38 billion. Other Chinese stocks and ADRs like Alibaba, XPeng, Li Auto, and Baidu have sunk into a bear market.
There are four main reasons for this. First, there are fears that the Biden administration will delist most Chinese stocks from American bourses. Second, there are concerns about slowing growth in the auto market as the chip shortage continues.
Third, the Nio stock price has declined because of the rising competition in the EV industry. Recently, we have seen companies like Lucid, Rivian, and Ford start selling their EVs.
Finally, policies by the Federal Reserve have had a negative impact on most growth stocks. Indeed, the Nasdaq 100 index has declined by more than 15% from its all-time high. Also, there are concerns about the company’s valuation.
Nio stock news
The Nio share price has declined recently, even after announcing some important news.
First, Nio announced strong December deliveries even as the chip shortage continued. The company sold 10,489 cars in December, an increase of about 50%. In addition, it sold 25,034 cars in the fourth quarter and 91,429 in 2021. This is remarkable growth for a company that started manufacturing less than two years ago.
The strong trend continued in January as the company sold 9,652 cars, a 33.6% year-on-year increase. The company also started developing its first brand for the Norwegian market known as Aspen.
The second Nio news was that the company recently launched its insurance brokerage business with about $8 million capital.
Finally, Nio inked a deal with Baosteel, a leading nutrition company from China.
The subsequent Nio earnings will come out in March 2022. Analysts expect that the company’s revenue rose to over $1.5 billion in the fourth quarter.
Will Nio stock go up?
Several key catalysts could push the Nio stock price up in the coming months.
First, the company has a strong market share in China, the biggest EV market globally. While competition is rising, the company’s pole position in manufacturing means that it will continue doing well.
Second, as Tesla has proven, having good name recognition is an essential part of any EV company. Nio has the second most popular brand recognition in China after Tesla, which is an added advantage.
Another reason why the Nio share price could bounce back is the fact that it received a European license in 2021. This means that the firm will soon start shipping cars to European countries, which are major players in the EV industry.
Nio share price analysis
The daily chart shows that the Nio stock price has been in a strong sell-off in the past few months. It is not alone since other EV shares like XPeng, Li Auto, and Canoo have all dropped by double-digits from their highs.
The stock has moved below the 25-day and 50-day moving averages. Most importantly, it has moved below the key support level at $30.60, which was the lowest level on May 14th. This price was also along the neckline of the head and shoulders pattern.
Therefore, as interest rates start rising, there are concerns that the stock will keep falling in the coming months. If this happens, the next key reference level will be at about $6.20. This price was the lowest it has been since June 2020. It coincides with the distance between the head and the shoulders.
Nio stock price forecast for 2022
2022 has started with a great reset for electric vehicles. Most of them, including Tesla, have seen their share prices slump by double-digits.
Analysts have mixed feelings about the Nio stock price. Data compiled by Marketbeat shows that the average target for the stock is $57, which is substantially higher than the current $24.
Some of the analysts bullish on the Nio stock price are from 86 Research, Macquarie, HSBC, Deutsche Bank, Mizuho, and Citigroup.
Another broader look by most analysts shows that most of them are bullish on the stock. In addition, data compiled by Tipranks shows that the target for the stock is $59, which is also higher than the current level.
Meanwhile, according to Long Forecast, the Nio stock price will remain in a tight range in the next few months. They expect the shares to be below $30 at the end of 2022.
Nio stock forecast 2025
It is difficult to predict how a stock will perform in about three years, as history has shown us. The situation is more volatile for Nio because it is a Chinese company that could probably be delisted in the United States.
All factors constant, there is a possibility that the Nio share price will do well by 2025 as electric vehicles go mainstream. As you already know, many countries such as those in Europe and even China have made plans for phasing out combustion engine vehicles.
By 2025, Nio will have perfected its manufacturing process and expanded its business to other countries. According to Long Forecast, the stock will be trading at about $55 in January 2025.
Nio analysts forecasts
Nio stock forecast 2030
Generally, I am a bit bullish on the Nio stock price in the long term because of the company’s rapid growth. Therefore, I believe that the stock will be substantially higher than where it is today. However, based on its historic performance, we can’t rule out a situation where the stock rises three times by 2030 to over $70. As Tesla has proven, this is a possible scenario.
Nio stock price history
As shown below, the Nio share price has had a roller-coaster as a public company. The company went public in 2018, and its stock price collapsed to an all-time low of $1.20. At the time, there were concerns about the company’s existence as a going concern.
It then started a spectacular rally in November 2019 as the firm geared towards the launch of its products. Since then, it jumped by more than 5,400% and reached an all-time high of $65. Today, the stock is about 65% below its all-time high.
Nio share price history
Is Nio a good buy and hold stock?
While Nio is a good company, it is also highly risky. Being a Chinese company, there are concerns about the accuracy of its financial results. In the past, we have seen Chinese companies publish inaccurate numbers.
Another concern is that the company could be delisted in the US. If this happens, many American investors will be left carrying the bag.
Nio stock short interest
Short interest refers to the number of shares held by short-sellers. These are people who bet that a stock will go down. After the Wall Street Bets situation, we have seen the short interest of many companies decline. The current Nio short interest stands at just $1.5 billion, which is the lowest level in more than a year. At its peak, the value of shares held by short-sellers was worth over $4 billion.
How many cars has Nio sold?
Nio is a relatively young company that is in the process of ramping up its production. Nio has sold over 160k cars, which is a remarkable number for a company of its age. Analysts expect that it will sell over 500k cars per year in the next five years.
Is the Nio stock overvalued?
Like most EV stocks, Nio is currently overvalued. Besides, this is a loss-making company that makes less than $4 billion in annual revenue that is being valued at almost $35 billion. The company has a price-to-sales ratio of 5.89, making it overvalued. However, this overvaluation can be justified if the company maintains its growth.
The Nio stock price has done well over the years. In this article, we have explained why it has performed like that. We have also identified potential risks that the company is facing currently.