Chinese electric automobile manufacturer Nio Inc. (NIO) was working towards a 5-day win streak on the stock market after reporting 3rd quarter earnings. But so far, the performance has been anything but positive.
News of the company’s performance for the recent quarter sent shares more than 3% lower in Monday morning’s trading session thus far. The company was eager to report on the launch of its highly anticipated electric vehicle the EC6 coupe SUV.
The car boasts the revolutionary NIO Technology 2.0 – which features innovative design language, advanced intelligence features, and world-class performance to offer an experience that shatters expectations.
In September alone the company delivered 15,641, a nearly 44% increase year over year. The delivery figure of 55,432 for the entire quarter represented a 75% increase year over year. As of September 30, Nio has delivered a total of 399,549.
The company also delivered its 2022 Environmental, Social, and Governance (ESG) report that showcases its commitment to contribute to the common good of society alongside its sustainable development efforts.
Nio has been battered by growth challenges over the past year and counting – from COVID-19 delays and shutdowns to increased competition at home and abroad. The Chinese economy itself has suffered and Nio felt those effects. However, it appears as if the company is finally catching its stride.
That being said, why did this news send shares back the other way? After more than 8% growth in the past week, there was hope that a strong positive price trend would be bolstered by this news.
But with today’s performance thus far the stock has now lost more than 13% in the past 3 months. We’ve taken a look at NIO through the VectorVest stock analysis software and have uncovered three things current or prospective traders need to be aware of…
NIO Has Poor Safety With Very Poor Upside Potential and Timing: Should You Cut Losses on This Stock?
VectorVest simplifies your trading strategy by giving you clear, actionable insights in just 3 ratings: relative value (RV), relative safety (RS), and relative timing (RT). These each sit on their own scale of 0.00-2.00 with 1.00 being the average for quick and easy interpretation.
But, it gets even better. Because based on the overall VST rating for a given stock the system issues a clear buy, sell, or hold recommendation at any given time. As for NIO, here’s what we found:
- Very Poor Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (forecasted 3 years out) to AAA corporate bond rates and risk. And right now NIO has a very poor RV rating of 0.14. Further to that point, the stock’s current value is just $1.03/share.
- Poor Safety: The RS rating is an indicator of risk. It’s derived from an analysis of the company’s financial consistency & predictability, debt-to-equity ratio, and business longevity. As for NIO, the RS rating of 0.57 is poor.
- Very Poor Timing: As you can see by looking at how the stock has performed over the past few months, NIO has very poor timing. The RT rating of 0.35 reflects this performance. The rating is based on the direction, dynamics, and magnitude of the stock’s price movement day over day, week over week, quarter over quarter, and year over year.
The overall VST rating of 0.40 is very poor - VectorVest suggests selling this stock and cutting your losses before it gets even worse. Learn more through a free stock analysis today!
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VectorVest advocates buying safe, undervalued stocks, rising in price. NIO has fallen more than 3% so far today despite showing impressive growth in deliveries. The stock has poor safety coupled with very poor timing and upside potential - it’s time to sell!
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