Summary: OVERPRICED
Score: 4/20
MOS: 0%
Share Price: $38
Sticker Price: $0
Is Nio stock a good buy?
Nio was founded in 2014 and is based out of Shanghai, China.
The electronic vehicle is here to stay. Five years ago it wasn’t a popular conversation topic but today, EV’s are all over the news.
When an industry or product becomes a hot topic, there can be a negative factor that works against investors like us. That factor is Moat.
As more companies start producing EVs, our chances for higher returns will be limited. That’s why it’s important to know who will stand out and who will fall behind.
This article from marketwatch.com says “Forget Nio and XPeng. This company and Tesla will be the top two electric vehicle plays by 2025.” The other vehicle manufacture they are referring to is Volkswagen.
Another quote form the same article says “If Tesla is the Apple of electric vehicles, then VW is Samsung.”
This article from Forbes states that the Volkswagen ID.3 has already surpassed the Renault Zoe and Tesla Model 3. VW is projected to sell 28M EVs by 2028. Putting that in perspective, that would be three quarters of all cars currently on UK roads, and around 10% of current US motor vehicle registrations.
So how does Nio stack up against the competition within Tykr?
TSLA (Tesla)
Score: 16/20
MOS: 69%
Share Price: $629
Sticker Price: $2,041
Summary: On Sale
Tesla had an incredible quarterly and annual report. They turned the financials around and have shown they are the global EV leader at the moment.
GM (General Motors)
Score: 5/20
MOS: 1%
Share Price: $54
Sticker Price: $56
Summary: OVERPRICED
GM has plans to release 30 new EV models by 2025.
VWAGY (Volkswagen)
Score: 2/20
MOS: 1%
Share Price: $214 (EUR)
Sticker Price: $217 (EUR)
Summary: OVERPRICED
Although Volkswagen is Overpriced, they have big manufacturing plans for the coming years.
F (Ford)
Score: 3/20
MOS: 0%
Share Price: $12
Sticker Price: $0
Summary: OVERPRICED
Ford has plans to invest $29B in EVs through 2025.
As you can see, the competition is rising. Yes, TSLA may be the standout player today but can it last? Also, will Nio survive? We’ll see.
Now let’s take a look at the financials. Remember, Tykr analyzes 5 years of historical data. Let’s take a look at the last 4 quarters.
Dollars below are in CNY (Chinese Yuan)
Revenue (Found on the Income Statement)
Q1 2020 = ¥1.3B
Q2 2020 = ¥3.7B
Q3 2020 = ¥4.5B
Q4 2020 = ¥6.6B
Revenues have been increasing.
Net Income (Found on the Income Statement)
Q1 2020 = – ¥1.7B
Q2 2020 = – ¥1.2B
Q3 2020 = – ¥1.1B
Q4 2020 = – ¥1.4B
Net income is awful. These numbers are all negative. They are spending a lot of money trying to keep up with the competition. This is a major red flag.
EPS (Found on the Income Statement)
Q1 2020 = -1.66
Q2 2020 = -1.15
Q3 2020 = -.98
Q4 2020 = -1.05
EPS is negative. This is a bad sign.
Net Change in Cash (Found on the Cash Flow Statement)
Q1 2020 = No quarterly cash flow statement released.
Q2 2020 = No quarterly cash flow statement released.
Q3 2020 = No quarterly cash flow statement released.
Q4 2020 = No quarterly cash flow statement released.
In the US, public companies are required, by law, to release financial data within 45 days of each quarter end and within 90 days of each year end. This is mandated by the SEC (Securities Exchange Commission). Some countries outside the US are not as rigorous with this process. In this case, Nio is still allowed to trade publicly without releasing cashflow information. If you’re wondering why Tykr doesn’t analyze every stock around the world, this is one big reason why.
Total Assets (Found on the Balance Sheet)
Q1 2020 = ¥15.3B
Q2 2020 = ¥23.1B
Q3 2020 = ¥34.3B
Q4 2020 = ¥54.6B
The Total Assets are surprisingly increasing.
Total Liabilities (Found on the Balance Sheet)
Q1 2020 = ¥23.3B
Q2 2020 = ¥28.9B
Q3 2020 = ¥26.3B
Q4 2020 = ¥27.4B
The Total Liabilities are somewhat flat.
Total Debt (Found on the Balance Sheet)
Q1 2020 = ¥7.1B
Q2 2020 = ¥7B
Q3 2020 = ¥6.7B
Q4 2020 = ¥5.9B
The Total Debt is decreasing.
Total Equity (Found on the Balance Sheet)
Q1 2020 = – ¥8B
Q2 2020 = -$5B
Q3 2020 = $8B
Q4 2020 = $27B
The Total Equity is surprisingly increasing.
With a score of 4/20 and a MOS of 0%, NIO is too risky. Also knowing the market is about to become significantly more saturated with EVs, the opportunity for a moat will be reduced, even for the standout player, TSLA. If you hold Nio in your portfolio, I would be very fearful for this stock’s future.
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The Summary, Score, and MOS of this stock may have changed since the posting of this review. Please login to Tykr to see up-to-date information.