Robinhood shares gain on Q2 beat, as user and crypto growth accelerate
On Wednesday, Bernstein SocGen Group analysts lowered the price target for NIO (NYSE:NIO) stock to $4.00 from $4.50, maintaining a Market Perform rating. With the stock currently trading at $3.53 and a market capitalization of $7.92 billion, InvestingPro analysis suggests the company is trading below its Fair Value. The adjustment follows NIO’s first-quarter earnings report, which revealed weaker-than-expected financial results.
NIO reported first-quarter revenue of RMB 12.0 billion, marking a 21.5% increase year-over-year but a 38.9% decline quarter-over-quarter. According to InvestingPro data, the company’s revenue growth remains strong at 23.71% over the last twelve months. The company’s vehicle deliveries totaled 42,100 units, a 40.1% rise compared to the same period last year but a 42.1% drop from the previous quarter. The average selling price decreased to RMB 236,100, a decline of 15.3% year-over-year and 1.8% quarter-over-quarter.
The gross margin for the quarter was 7.6%, with the vehicle margin falling to 10.2% from 13.1% in the fourth quarter of 2024. Operating expenses were reported at RMB 7.3 billion, accounting for 61.0% of the total revenue. Research and development expenses grew to RMB 3.2 billion, an increase of 11.1% year-over-year, while selling, general, and administrative expenses reached RMB 4.4 billion, up 46.8% from the previous year.
NIO’s net loss widened to RMB 6.8 billion, with a net margin of -56.1%, compared to -52.3% in the first quarter of 2024 and -36.1% in the fourth quarter of 2024. The analysts cited lower revenue estimates and a reduced EV/sales multiple as reasons for the revised price target. InvestingPro analysis reveals several challenges, including weak gross profit margins and rapid cash burn. Subscribers can access 8 additional key ProTips and a comprehensive Pro Research Report for deeper insights into NIO’s financial health and future prospects.
In other recent news, NIO reported first-quarter revenue of RMB 12 billion, marking a 22% increase year-over-year but a 39% decrease quarter-over-quarter, which fell short of expectations. The company’s gross profit margin improved year-over-year but remained below analysts’ estimates. NIO’s operational loss for the quarter was RMB 6.4 billion, exceeding forecasts, with a non-GAAP net loss of RMB 6.3 billion. Barclays (LON:BARC), Macquarie, BofA Securities, and Mizuho (NYSE:MFG) have all lowered their price targets for NIO, citing various concerns such as delivery challenges, cash burn, and strong competition in China. Despite these challenges, NIO maintains its goal of breaking even by the fourth quarter of 2025. The company has provided guidance for the second quarter, projecting vehicle deliveries between 72,000 and 75,000 units and revenue between RMB 19.5 billion and RMB 20.1 billion. Morgan Stanley (NYSE:MS), however, reiterated an Overweight rating with a price target of $5.90, noting potential improvements in sales volume and cash flow. NIO aims to reach a monthly production volume of 50,000 units and achieve profitability by the end of 2025, amidst restructuring efforts and new model launches.
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