Why NIO Stock Is Down By 9% Today

Key Insights

• NIO reports fourth-quarter results, missing analyst earnings estimates. 
• The company’s guidance for the first quarter of 2022 implies no growth in revenue. 
• While recent trading sessions have been successful for NIO stock, it will need more positive catalysts to get back to the upside mode. 

NIO Stock Falls As Guidance Disappoints

Shares of NIO gained strong downside momentum after the company released its quarterly results. NIO reported revenue of $1.55 billion and an adjusted loss of $0.16 per share, beating analyst estimates on revenue and missing them on earnings.

In the fourth-quarter of 2021, the company delivered 25,034 vehicles, up from 24,439 in the third quarter. Vehicle margin improved from 18.0% in the third quarter of 2021 to 20.9% in the fourth quarter of 2021, while gross margin was 17.2% in Q4.

As usual, the market focused on the company’s guidance for the first quarter of 2022. NIO expects that deliveries will be between 25,000 and 26,000 vehicles. Total revenues are expected to be between $1.51 billion and $1.57 billion.

What’s Next For NIO Stock?

NIO expects no revenue growth in the first quarter, so the market’s reaction to the report is not surprising. Treasury yields continue to move higher as traders prepare for aggressive moves from the Fed, so shares of tech companies have become even more sensitive to financial guidance.

Analysts expect that NIO will report a loss of $0.23 per share in 2022, so the company is not expected to become profitable in the near term. The recent developments in commodity markets should push costs higher, which will be bearish for NIO.

In addition, traders remain worried about the future of Chinese stocks’ listing in the U.S., which also serves as a bearish catalyst for NIO.

While NIO stock has recently enjoyed a strong rebound from lows, it will need additional upside catalysts to continue the upside move.

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