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Is NIO Stock A Good Buy?

nio stock

Electric vehicle maker NIO is a stock that is getting more popular day by day. Last week NIO became the fourth most-bought stock on Hargreaves Lansdown.

It is not difficult to see why sharing more popularity at present as news from the company is encouraging more. The share price is soaring. Many investors do believe that NIO could be the ‘Tesla of China.’

Now let’s see if you should buy your stock or not.

As per the leading industry firm, the 5G boom could make a global industry worth the US $12.3 Trillion out in thin air.

What is NIO Stock?

NIO is a chines3 electric vehicle manufacturer headquarters, and the company is well known for creating electric vehicles. The company develops premium smart electric cars that feature advanced technologies like artificial intelligence. NIO is one of the largest Electric Vehicle manufacturers in China. This company provides a very unfashionable brand.

Strong trading-

A trading update showed that the Chinese company had a lot of momentum last week. According to the NIO, it was declared that 5,055 vehicles are delivered with an increase of 100 percent year on year. Meanwhile, it also had 31,430 cars for the ten months to the end of October, up 111 percent year on year. According to 31st October, its ES8, ES6, and EC6 vehicles’ cumulative deliveries were approx 63, 343. Now the NIO company is all set to report its Q3 results on 17th November.

No profits-

It was evident at the top line as it is expanding rapidly nowadays. Financially it is achieving more success. If we look at the last year, then the revenue was $1.12bn, but this year it is expected to be around twice, about $2.25bn. Income is forecast to be $3.98bn. That’s one of the impressive growths.

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It is crucial to know whether the company is not making a profit yet. According to the last year, it created a net loss of $1.6bn. But if we see the progress of this year, then they forecast EPS of -42 cents. This lack of profits added to the company’s risk, which has a market capitalization of nearly $60bn at present.

High valuation-

NIO shares have a forward-looking price to sale ratio currently of about 26.7. That seems expensive. Tesla now trades on a price to sales ratio of about 13.3. Many analysts consider that Tela to be overvalued, and it is fair to mention that NIO stock is not cheap.

Short interest-

Investors should be aware of share price as it has jumped recently, and short interest has also increased. As per the data from 2iQ Research, short interest jumped 23per cent on 4th November. This is the sign that hedge funds anticipate a share price fall. You can see this as bearish.

NIO stock: View

Overall, NIO looks very interesting, and considering the market for Electric Vehicle Manufacture is expected to boom over the next decade. This NIO stock has lots of potentials to gain all the success with rapid growth. The valuation of NIO stock is high, and the lack of profits also adds risk. Everything is considered, and NIO seems to be better growth stock to purchase.

Why NIO stock Looks Risky?

According to US-based electric vehicle stocks have cooled off in recent weeks; nothing has stopped the epic run of China found electric vehicle play NIO.

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Even after NIO is bounded from the brick, then it is more than just hype. With NIO’s delivery growth, which is trending over 100 percent, the stock is doubling since October. It is roughly a 1, 200 percent rise from 5th May, and it may not be the product of irrational exuberance after everything.


According to Citigroup analysts, NIO stock has significant tailwinds ahead, and now its outlook remains debatable. NIO stock remains one of the few pure-play Chinese Electric Vehicle available to US retail investors and is still willing to pay NIO’s growth to gain exposure. NIO deals with the manufacture of Electric vehicles, which are going to have a blast very soon. Technology and development are beyond. The success rate of NIO is increasing rapidly.

Also Read: Top 10 Most Expensive Stock In The World

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