NIO Stock Price and Forecast – Potential buy opportunity as shares fall despite strong earnings

  • NYSE: NIO has dropped by 3.28% on Wednesday, but remains close to the highs.
  • NIO Inc reported upbeat earnings and an encouraging outlook moving forward. 
  • Uncertainty about the Biden administration's approach toward China may be weighing on the EV-maker's value.

Update: NYSE: NIO is rising by nearly 3% at the time of writing on Friday, edging closer to $50. Shares are on an upswing. Analysts are becoming more bullish on Nio Inc. 

Are investors looking in the wrong direction? NIO Inc (NYSE: NIO) closed Wednesday's trading session some 3.28% lower despite robust earnings. The Shanghai-based electric vehicle maker may have been overshadowed by a smaller American one. Workhorse Group Inc (NASDAQ: WKHS) received a bullish recommendation from an analyst and has shot higher.  

NIO stock news

Nevertheless, there are reasons to cheer NIO's results. The EV producer's quarterly loss dropped to around $154 million, better than expected, paving the way for profitability down the line. The adjusted loss, excluding several items, came at $147 million or 12 cents per share. 

More importantly, Nio Inc's revenues are on an upward trajectory, jumping by 146% to the devilish number of $666.6 million, marginally above estimates for $664. 

Looking to the future, the automobile manufacturer expects to sell up to 17,000 vehicles in the fourth quarter, up from delivering 12,206 in the three months ending in September. CEO William Bin Li is likely content with the surge from delivering under 5,000 cars back in the third quarter of 2019.

What could be holding NYSE: NIO back? Apart from the competition with other electric vehicle makers such as Elon Musk's Tesla (NASDAQ: TSLA), Nio may be suffering from the Sino-American rivalry. While outgoing President Donald Trump has maintained a hard line against Beijing, his successor Joe Biden may muster a broader international coalition that could prove more effective in containing China. 

The President-elect aims to strengthen ties with Europe and other countries, potentially working together to improve the West's playing field against the world's second-largest economy. That would, in theory, curb Nio's ability to compete with American rivals. Nevertheless, the upbeat financial results may have a greater say in determining NYSE: NIO's trajectory

At the current price of $45.06, shares still have room to run ahead of the 52-week high of $54.20. Topping the psychologically significant level of $50 is the first hurdle. NIO has support at $41.55, which was November's low. 

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