Why Nio Stock rose and then fell back on Friday

What happened

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%.

So what

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.

Now what

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.

10 stocks we prefer over NIO Inc.
When our award-winning team of analysts have stock advice, it can pay off to listen. After all, the newsletter they’ve been running for over a decade, Motley Fool Equity Advisor, has tripled the market. *

They have just revealed what they believe to be the ten best stocks for investors to buy now … and NIO Inc. was not one of them! That’s right – they think these 10 stocks are even better buys.

See the 10 actions

* Returns of the portfolio advisor as of December 16, 2021

Howard smith owns NIO Inc. The Motley Fool owns and recommends NIO Inc. and Tesla. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.