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The NIO EVE Concept Car
Nicolas Asfouri / FP via Getty Images
Chinese electric-vehicle maker
NIO
will report fourth-quarter numbers after the close of trading Thursday. Weary investors are hoping for a good one.
That’s because NIO (ticker: NIO) stock has been badly beaten up. Shares have declined about 31% year to date, worse than the 7% and 5% comparable respective losses of the
S&P 500
spirit
Dow Jones Industrial Average.
What’s more, shares have dropped about 60% from their 52-week high in July of $ 55.13, and are down about 67% from their all-time high of $ 66.99. Shares are off 0.3% Thursday at 1:46 pm
Company fundamentals have not been responsible for all of those declines. Monthly sales have flattened out, constrained by factors such as the global semiconductor shortage. But rising interest rates and inflation have sapped some investor enthusiasm for growth stocks such as NIO.
There is also the renewed problem of a possible US delisting of Chinese stocks on US stock exchanges. Earlier in March, the Securities and Exchange Commission named five U.S.-listed Chinese stocks that do not comply with American audit standards. None was a Chinese EV maker. Still, it seems all US-listed Chinese stocks have been impacted.
NIO management likely will face questions about its compliance with auditing standards on the conference call that begins at 9 pm Eastern time following the release of earnings.
With respect to those earnings, Wall Street is looking for a loss of 14 cents a share from $ 1.5 billion in sales. In the fourth quarter of 2020, NIO reported a loss of 16 cents from $ 1 billion in sales.
Looking ahead, analysts project the company will generate about $ 10 billion in sales, up from about $ 5.6 billion expected for all of 2021.
Options markets imply that NIO stock will move about 11%, up or down, following earnings. Shares have moved an average of about 5%, up or down, following the past four quarterly reports. Shares have declined after three of those reports and risen once.
Despite recent stock headwinds, Wall Street still loves NIO stock. More than 90% of analysts covering the stock rate shares at Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 58%. The average analyst price target for NIO share is about $ 48, up almost 120% from recent levels.
Write to Al Root at allen.root@dowjones.com
