Nio earnings miss big, but revenue beats consensus for Q3

  • November 10, 2022
  • NIO has jumped nearly 6% in the Thursday premarket.
  • Nio reported Q3 adjusted EPS that missed by a wide margin.
  • Outlook for Q4 appears to show strong delivery growth.

Nio (NIO) stock has jumped 5.6% in Thursday’s premarket after the automaker produced revenue ahead of consensus for the third quarter. The real positive sheen on the quarter, however, appears to be the robust outlook given for the fourth quarter.

Nio earnings news

The Chinese EV automaker reported adjusted earnings per share of $-0.30, which missed analyst consensus by a rather large 14 cents. Revenue grew almost 33% YoY to  $1.83 billion, a figure that amounted to a much smaller $50 million over consensus. The market has not seemed to blink an eye at fallling margins as well. Vehicle margin dropped to 16.4% compared with 18% in the year ago quarter.

“We achieved solid top line growth in the third quarter of 2022 against a challenging market environment,” said CFO Steven Wei Feng. “Following the delivery of our new product lineup based on NIO Technology 2.0 catering to different market segments, we have witnessed strong growth momentum in user demand and robust foot traffic, especially after the debut of ET5s in stores from September, and expect the ET5 delivery will support a substantial acceleration of our overall revenue growth in the fourth quarter of 2022.”

Indeed Nio has had a difficult year in terms of constant covid lockdowns and logistics issues, but management singaled that shareholders should focus on the future as the company has only just begun its European rollout in four markets.

The most likely reason behind the market’s embrace of Nio despite its EPS miss is that the fourth quarter outlook for production was genuinely a positive sign. Deliveries for Q4 were guided to between 43,000 and 48,000. This would be 72% to 92% growth YoY. Nio delivered 31,607 vehicles during the third quarter, so this would be a large QoQ jump. The previous three quarters all saw some variation just over 25,000.

Source: Nio Q3 2022 earnings release

Management guided Q4 revenue off consensus for $2.96 billion, however, to a range between $2.44 billion and $2.7 billion. This guidance did not seem to move markets though.

Nio stock forecast

Moving up closer to $10 in the premarket puts the stock in better perspective. The 9-day moving average sits just above here at $10.11, and the 21-day moving average is at $10.80. Both these moving averages should apply downward pressure on NIO stock once either is reached. If not, bulls could start a rally that moves NIO price up to $12.30 – Monday’s high before the stock cratered until now. Above here is the $16.54 level derived from its support on September 7. Until Nio stock regains this last level, it remains in negative territory. Short-term support remains at $9.

NIO 1-day stock chart