Chinese EV startup flirts with bankruptcy, then catapults higher
The Chinese EV startup, called NIO, was once teetering on the brink of bankruptcy. But following a bailout from the city of Hefei and a life preserver from investors, the near-defunct company is now the 4th most valuable car maker in the world. Only Tesla, Volkswagen, and Toyota are bigger.
NIO was once branded as the "Tesla killer," but the company struggled early to gain any traction and was burning through billions of dollars. Between 2017 and 2019, the company lost a staggering $3.67 billion and sold less than 32,000 cars. It's stock price fell to $1.39 a share late last year, a steep plummet from its $10 a share IPO.
So what happened? Well, the state-financed bailout for one. But investors who have been witnessing -- or perhaps participating -- in Tesla's meteoric rise may be looking to competitor EV companies in hopes of riding a similar wave of enthusiasm.
NIO is still a far cry from Tesla. But the Chinese auto maker is betting on a different system for driving long distances and working around long charge times. The idea: battery swapping stations. Instead of waiting for the vehicle battery to charge, a driver could simply stop at a battery swapping station and do a quick swap out within minutes, and keep moving. The challenge will ultimately be building enough swap stations, and time will tell how long NIO can last with such a high burn rate.
What to make of the decision between NIO and Tesla? A.I.dvisor has the breakdown below.
NIO in +16.67% Uptrend, growing for three consecutive days on October 28, 2024
Moving higher for three straight days is viewed as a bullish sign. Keep an eye on this stock for future growth. Considering data from situations where NIO advanced for three days, in of 286 cases, the price rose further within the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 60 cases where NIO's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Momentum Indicator moved above the 0 level on October 28, 2024. You may want to consider a long position or call options on NIO as a result. In of 77 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
NIO moved above its 50-day moving average on October 28, 2024 date and that indicates a change from a downward trend to an upward trend.
Bearish Trend Analysis
The 10-day RSI Indicator for NIO moved out of overbought territory on October 03, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 35 similar instances where the indicator moved out of overbought territory. In of the 35 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Moving Average Convergence Divergence Histogram (MACD) for NIO turned negative on October 09, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 42 similar instances when the indicator turned negative. In of the 42 cases the stock turned lower in the days that followed. This puts the odds of success at .
The 10-day moving average for NIO crossed bearishly below the 50-day moving average on October 28, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 12 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where NIO declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
NIO broke above its upper Bollinger Band on September 27, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for NIO entered a downward trend on October 28, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. NIO’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.689) is normal, around the industry mean (6.019). P/E Ratio (0.000) is within average values for comparable stocks, (18.031). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (5.553). NIO has a moderately low Dividend Yield (0.000) as compared to the industry average of (0.043). P/S Ratio (1.009) is also within normal values, averaging (76.807).
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. NIO’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 85, placing this stock worse than average.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
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a manufacturer of electric cars
Industry MotorVehicles