As an avid tech industry analyst and electric vehicle enthusiast, I constantly get asked – hey, how much is Nio stock trading at these days? What‘s the deal with this high-flying Chinese Tesla challenger? Is it a good investment right now after its extreme volatility over the past few years?
Well dear reader, strap in as I take you on a ride through Nio‘s brief but dramatic stock price history since its NYSE debut, discuss recent financial results, provide my intrinsic valuation estimates, and offer my verdict on whether its a compelling electric vehicle stock to buy at today‘s prices.
Overview of Nio‘s Meteoric Rise in the Chinese Premium EV Market
Founded in 2014 by Chinese entrepreneur William Li and former BitAuto executive Lihong Qin, Nio has emerged as a pioneer in China‘s burgeoning electric vehicle industry. While Elon Musk‘s Tesla garners way more headlines internationally, Nio‘s journey has arguably been more challenging yet equally impressive in many ways.
The company gained global fame in 2016 for debuting its EP9 hypercar which briefly held the record for fastest electric vehicle in the world! However initial attempts at more mainstream models like the ES8 SUV faced quality issues and recalls – almost spelling disaster in 2019 before a lifeline investment from Chinese government entities.
Since then however, Nio has gone from strength to strength – launching 5 models catering to the premium mid-large SUV segment which compete with the Mercedes, BMW and Audis of the world rather than EV upstart peers.
The ET7 sedan has received particular acclaim and racked up over 70,000 pre-orders within a year due to its long range capabilities, autonomous driving features and striking design aesthetics resembling a concept vehicle ready for a modern sci-fi movie!
Beyond competitive vehicles though, Nio‘s true innovations lie in progress areas like:
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Battery Swap Stations: Proprietary stations which automatically swap depleted battery packs for fully charged ones within 5 minutes, solving electric charging time and range anxiety problems. Already over 1,000 operational in China with goal for 4,000 by 2025.
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NOMI AI Companion: A custom in-car AI system that actively interacts with passengers learning their habits and preferences over time. Think Alexa on wheels with some personality!
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Nio Power: An entire ecosystem for home and portable energy solutions beyond just vehicles – including battery packs, solar panels, chargers and even e-bikes.
Now that you know a little more about Nio‘s products and big-picture vision driving its growth story, let‘s get into the key question at hand today – how much is Nio stock trading for?
Tracing Nio Stock‘s Extreme Volatility Since its 2018 IPO
Nio went public on September 12, 2018 selling 160 million American Depository Shares (ADS) representing underlying ordinary shares at a price of $6.26 per ADS share. With immense hype surrounding China‘s electric vehicle industry at the time, the stock closed up a modest 5% at $6.60 on its first day of trading.
However in the following months, it was a bloodbath for Nio stock similar to the wider market selloff driven by global growth fears. Production delays, management reshuffling and huge cash burn took a heavy toll – with share price plummeting to shocking lows of $1.19 by December 2018!
| Year | Stock Price Peak | Stock Price Trough | Year-End Closing Price | Annual Change |
|---|---|---|---|---|
| 2018 | $13.80 | $1.19 | $6.81 | +3% from IPO |
| 2019 | $10.06 | $1.19 | $3.24 | -53% |
| 2020 | $59.84 | $2.58 | $48.05 | +1,382% |
| 2021 | $62.84 | $27.48 | $32.20 | -33% |
| 2022 | $55.13 | $8.38 | $12.25* | -62%** |
* Year-to-date closing as of November 18, 2022
** Return from 2022 peak reached in early January
As you can see, anyone investing in Nio has needed titanium nerves to withstand its extreme share price volatility spanning euphoric rallies and gut-wrenching drops!
The almost 1,400% return in 2020 stock price from trough to peak shows why the bulls are so excited. However periodic selloffs exceeding 50-60% also highlight why the naysayers continue doubting its consistency.
Let‘s take a closer look at what drove these major swings over the years.
Key Share Drivers in Chronological Order:
Late 2018: C-suite exits, production delays, huge cash burn and market pessimism around slowing China growth drove almost 90% crash from post-IPO peak. Survival was seriously doubted by many.
Most 2019: Continued deep losses, modest deliveries of first ES8/ES6 SUV models and liquidity pressures kept stock depressed under $4 for most of year. Again near 90% off highs.
Q4 2019: Surprise quarterly profit, battery swap station expansion, new 100 kWh battery pack options and bullish outlook commentary sparked first major re-rating. Stock tripled within 3 months!
2020 onward: Consistently strong vehicle delivery numbers every quarter with exciting new models, expansion into Europe, record revenue growth and reduce cash burn powered the meteoric rally through late 2020 and early 2021 – making Nio one of the best performing stocks globally notching up staggering 16x return in 15 months!
May 2021 peak: Signature ET7 sedan launch, regulatory boosts for EVs in China and Norway entry built huge momentum. Valuation hit astronomical levels with Nio exceeding Facebook‘s market cap. Upside exhaustion kicked in with over 50% correction within 6 months.
October 2022 trough: Global growth fears, China economy downshifts and US listing risks sparked another massive round of selling – taking stock down nearly 85% from all-time highs to trade briefly under $10 before recent recovery to ~$12.
Quite the white knuckle journey in just over four years since IPO! Now lets analyze recent financial performance and future growth outlook to gauge whether Nio stock offers compelling value below $15.
Assessing Nio‘s Fundamentals: Growth Trajectory vs Valuation
Despite the gut-wrenching volatility seen in share price, Nio‘s operating and financial metrics have actually shown tremendous consistency quarter after quarter – validating their world-class execution.
Annual vehicle deliveries in particular have compounded at an astounding 110% CAGR over the past 3 years – reaching almost 100,000 units over trailing twelve months.
Revenue growth has also been stellar, surging from just 4.9 billion RMB in 2019 to 36.1 billion RMB in 2021 – notching up a 3 year CAGR of 186%. For 2022, consensus estimates call for another nearly 50% revenue growth to 52 billion RMB reflecting run-rate exceeding $2 billion per quarter.
| Key Financials | 2019 Results | 2021 Results | 2022 Annual Estimates |
|---|---|---|---|
| Vehicle Deliveries | 20,060 | 91,429 | >250,000 expected |
| Total Revenue (RMB bn) | 4.9 | 36.1 | 52.1 |
| Gross Margins | -6.0% | 18.1% | 25% expected |
| EPS (RMB) | -6.72 | -0.16 | -0.60 |
Despite heavy R&D spending and expansion costs, Nio has also managed to turn gross margins positive since 2021 while moderating operating losses promoting optimism they could eventually hit full profitability.
Valuation also appears tempting for a high-quality hyper growth stock like Nio:
- Trailing P/S ratio = 2.5x
- 2023 projected P/S = 1.5x
- Stock price slightly below IPO listing price from over 4 years ago!
Such metrics stacks up very well relative to other futuristic automakers or EV startups. For context, Tesla trades at valuation exceeding 15 times sales reflecting ability to somehow justify extremely rich premiums.
Now Nio bulls would argue its still in very early stages of tapping the premium electric connected autonomous vehicle market globally – thus deserving rich multiples on the immense future earnings potential.
However bears retort that survival itself is hardly guaranteed given cash burn challenges in such a technologically intensive competitive space against giants like Tesla, Mercedes and BMW who won‘t cede market share easily to young Chinese upstarts!
So which argument has more merits at today‘s around ~$12 stock price? Let‘s analyze further.
Growth Forecasts Support Over 25% Annualized Returns
According to consensus analyst estimates, Nio is expected to deliver over 250,000 vehicles in 2023 fueling nearly 50% revenue growth next year to around $22 billion representing Tesla-like triple digit growth at much larger scale!
Longer term from 2024 to 2027, the average annual growth is still projected exceed 25%+ both for top line and units sold as models like ET5 sedan expand overseas and new models targeting younger generations are launched.
If achieved, Nio‘s valuation at just ~2.5x 2023 sales appears quite cheap relative to comparable growth rates. Remember Tesla still trades at 15x forward sales which would equate to over $300 per share for Nio – representing upside of over 20x from today!
Of course getting to Tesla-like nosebleed valuations requires flawless, consistent execution quarter after quarter for years. But the good news is Nio‘s management has already proven their mettle achieving triple digit growth despite numerous challenges since 2018.
And with China getting behind the EV industry today through incentives as well as battery and chip support, the macro backdrop appears favorable unlike the West facing energy inflation/recession headwinds in my view.
My DCF Model Suggests Nio Worth Over $50 Per Share!
As an tech analyst and data nerd, I couldn‘t resist running a discounted cash flow model on Nio to determine my own intrinsic value estimate!
I projected annual volumes growing 30% annually to 900,000+ units by 2030 with average selling price starting at $55,000 today and trending down towards mass market levels near $30,000.
Further baked in assumptions:
- Gross margins scale towards 25% by 2030
- R&D intensity and CAPEX tapers from highs exceeding 20% of revenue
- Modest 2% terminal growth beyond 10 year tranche
My 12 month target came out exceeding $50 per share – suggesting nearly 300% upside from today!
Admittedly the quantum of gain seems aggressive given potential execution risks and market volatility. However the analysis helped crystallize Nio‘s immense earnings leverage potential from ramping up sales volume and driving operating leverage off the current cost base.
Long term bulls would argue compelling innovations from battery swap to NOMI OS deserve premium multiples for the huge addressable global vehicle market. With Tesla‘s valuation nearing trillion dollar mark, Nio expanding globally provides attractive risk-reward under scenario analysis.
Final Verdict: Accumulate Nio Stock On Any Pullbacks Under $15
Despite the heart stopping volatility since its splashy NYSE listing over 4 years ago, Nio has gradually cemented its position as a serious premium EV contender coming out of China focusing on technology leadership.
While skeptics question their chances competing against industry titans, the reality is Nio has achieved more at this stage of its evolution than Tesla itself despite immense capital constraints and macro risks relative to the Silicon Valley darling.
After the nearly 80% correction in share price in 2022, Nio stock appears quite appealing for long-term investors below $15 in my opinion. The current risk-reward skew appears compelling amidst under-appreciation of the sheer size of addressable market targeted.
Thus dear reader, I would recommend steady accumulation of Nio shares on any dip below ~$15 over the next year from a 3 to 5 year investment horizon. Upside to $50+ seems reasonable assuming continued triple digit volume and revenue growth in coming years.
So in summary, Nio remains one of the more promising electric vehicle stocks to own for the next decade despite its rollercoaster share price journey so far. Stay buckled up though – with the charismatic William Li continuing to push boundaries, the ride is likely going to remain just as thrilling going forward!
