The stock of the Chinese electric vehicle manufacturer Nio (NYSE: NIO) has been on a slide this week, along with many other growth names. But the title reversed course Friday morning, causing a jump of 3.6% at the start of the session. Gains did not hold up, however, and stocks slipped as much as 2% below Thursday’s closing price. At 1:44 p.m. ET, Nio shares split the difference, up just 0.36%.
The initial reversal of the recent downtrend in Nio stock came after Forbes magazine published an article predicting that the stock will outperform in 2022. But Nio’s US custodian stocks did not hold onto the gain, as a general decline in high growth technology stocks picked up with the markets before the weekend.
The ET5 midsize sedan will be available later in 2022. Image source: Nio.
Forbes highlighted several factors that he believes will translate into a strong year for Nio stock. The shares are trading at less than five times expected revenue in 2022, which compares favorably with that of competing electric vehicle manufacturers. The authors noted that You’re here and another Chinese electric vehicle company XPeng are valued at 15 times and seven times the estimated earnings, respectively.
Nio’s catalysts this year include the launch of at least two new vehicles. The company said it will begin confirming orders for its ET7 luxury sedan on January 20, 2022, with initial deliveries slated for late March. And deliveries of the ET5 midsize sedan are expected to begin in September.
The ET5 will be priced at the equivalent of approximately $ 50,000 before grants. But customers who subscribe to Nio’s Battery-as-a-Service (BaaS) option will be able to purchase the ET5 for around $ 40,000. This option allows customers to save money up front and use Nio’s growing network of battery exchange stations to quickly get fully charged batteries. The service sets Nio apart from its competition and brings a stream of subscription revenue to the company. Investors will be watching the rollout of the two new sedans to see if sales growth will continue to remain strong in 2022.
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