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NIO Warming Up to Q3 Earnings: What Can Investors Expect?

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NIO Inc. (NIO - Free Report) is slated to release third-quarter 2020 results on Nov 17, after the closing bell. The Zacks Consensus Estimate for third-quarter loss per ADS of 15 cents has remained stable for the past 60 days. The year-ago loss was 4533 cents per ADS. The Zacks Consensus Estimate for revenues is pegged at $628 million, suggesting an uptick from $257 million reported in the prior-year quarter.

Factors at Play

Increasing demand for NIO’s ES6 and ES8 models is likely to reflect on the firm’s third-quarter 2020 results. NIO delivered 12,206 vehicles in the quarter to be reported. The figure exceeded the firm’s guidance and increased 154.3% from the year-ago level.

NIO’s battery swap technology is a game changer and is likely to aid the company’s results for the quarter to be reported. The technology that is part of NIO’s BaaS (Battery-as-a-Service) strategy has been helping to save time when charging an EV and alleviating range anxieties. During the quarter to be reported, the company announced the launch of the BaaS subscription model. As of Aug 20, 2020, NIO completed more than 800,000 battery swaps.

Importantly, cash infusion from investors and increasing efforts to expand the company’s sales network has started to yield benefits. These factors are instilling confidence on the stock and are likely to reflect positively on its third-quarter results.

However, the company has been bearing the brunt of operational inefficiency over the last several quarters. While rising deliveries are expected to have positively impacted NIO’s revenues, escalating R&D as well as SG&A costs are likely to have dented operating margins. 

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for NIO. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: NIO — whose peers include Byd Co., Ltd. (BYDDY - Free Report) , Xpeng Inc. (XPEV - Free Report) and Li Auto (LI - Free Report) — has an Earnings ESP of 0.00%.

Zacks Rank: It carries a Zacks Rank of 3 currently.

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