Nio stock slides after Chinese EV maker offers Q3 guidance that disappoints

• Nio reported Q2 non-GAAP EPADS of $-0.20 on revenue of $1.54 billion.
• NIO stock slid 4.3% to $16.38 in the premarket.
• Wall Street expected non-GAAP EPS of $-0.18 on $1.43 billion in sales.

Chinese EV upstart Nio (NIO)  disappointed its legion of investing fans on Wednesday morning after it presented third quarter guidance below earlier expectations. Nio stock slumped 5% to $16.25 on the news.

The guidance came along side second quarter earnings that were mixed. Nio reported Q2 non-GAAP EPADS (earnings per American Depository Share) of $-0.20, which was 2 cents behind consensus forecasts. Revenue of $1.54 billion was well ahead of the consensus for $1.43 billion.

Also read: Tesla Stock Deep Dive: Price target at $400 on China headwinds, margin compression, lower deliveries

Nio stock earnings

Nio's third quarter guidance was rather lacking in confidence. Management expects Q3 deliveries to come in at a midpoint of 32,000. While this is better than the Q2 deliveries just above 25,000, it amounts to just a 31% growth rate YoY. By comparison Nio's August deliveries skyrocketed 81.6% YoY.

More importantly for long-term investors' models, management said Q3 revenue would arrive between $1.918 and $2.03 billion. The market had been expecting $2.38 billion, so this amounted to a more than 17% shortfall.

Based on the delivery and revenue figures, it appears to the mild observer that Nio's hyper growth is leveling off despite it being the most followed Chinese EV stock.

Of the 25,059 vehicles that Nio delivered in the second quarter, 3,681 were ES8s, 9,914 were ES6s, 4,715 were EC6s and 6,749 were ET7s. That last number is significant, because the ET7 model had a few hiccups in the past quarter involving its production schedule. The top line figure was actually a decrease from the first quarter, but this was somewhat expected due to covid-related lockdowns.

Nio's vehicle margin for the second quarter also showed worrying signs. At 16.7%, it was well below the 20.3% seen in Q2 2021 and the 18.1% reported in Q1 2022. This meant that the $200 million achieved in gross profit during the quarter was 15% lower YoY and down more than 7% from the previous quarter.

Nio stock forecast

NIO stock broke through its ascending trend line of support on August 19, since then it has been waxing and waning in a sideways fashion. The present quarterly report is not being taken well, and we can see from the daily chart below that its premarket price is clinging to the support from June 13 in the low $16s.

Below here is the three-day low at $14.40 from the last week of May. Also the $13.10 low from May 12 guards the way to complete capitulation. It is hard to view NIO in a bullish light until it breaks above the 21-day moving average, which is now at $19.12 but moving lower. The most likely scenario is NIO bobbing around until it finds support over the rest of September. Once a base is formed, bulls will assuredly jump back in.

NIO daily stock chart