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NIO to Report Q4 Earnings: What's in Store for the Stock?

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NIO Inc. (NIO - Free Report) is slated to release fourth-quarter 2020 results on Mar 1, after the closing bell. The Zacks Consensus Estimate is pegged at a loss of 14 cents per share on revenues of $742 million for the quarter.

The China-based electric vehicle (EV) maker posted a narrower-than-expected loss in the last reported quarter on higher-than-expected deliveries.

Over the trailing four quarters, the company delivered an average earnings surprise of 22.52%. This is depicted in the graph below:

NIO Inc. Price and EPS Surprise

NIO Inc. Price and EPS Surprise

NIO Inc. price-eps-surprise | NIO Inc. Quote

 

Trend in Estimate Revisions

The Zacks Consensus Estimate for NIO’s fourth-quarter loss per share has remained unchanged in the past 90 days. Nonetheless, it is narrower than the year-ago quarter’s loss of 39 cents per share. Moreover, the Zacks Consensus Estimate for quarterly revenues suggests a year-over-year surge of 81.42%.

Earnings Whispers

Our proven Zacks model does not conclusively predict an earnings beat for NIO this time around. 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. However, that is not the case here as elaborated below.

Earnings ESP: NIO has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate is at par with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: NIO, peers of which include Byd Co., Ltd. (BYDDY - Free Report) , Xpeng Inc. (XPEV - Free Report) and Li Auto (LI - Free Report) , currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors at Play

Increasing demand for NIO’s ES6 and ES8 models is likely to reflect on the firm’s fourth-quarter 2020 results. In addition, the company recently launched the EC6 model, a coupe-style smart electric SUV, thereby facilitating its efforts in the electric vehicle (EV) space. Encouragingly, NIO delivered 17,353 vehicles in the quarter to be reported. The figure exceeded the upper-end of the firm’s guidance and surged 111% from the year-ago level.

NIO’s battery swap technology is a game changer and is likely to have boosted the company’s performance during the quarter to be reported. The technology is part of NIO’s BaaS (Battery-as-a-Service) strategy and has been helping save time when charging an EV and alleviating range anxieties. Strategic collaboration with Mobileye for the development of driverless vehicles in China is also likely to have aided the company’s top line during the to-be-reported quarter.
 
However, the company has been bearing the brunt of operational inefficiency for the past several quarters. Additional costs incurred due to escalating R&D as well as SG&A costs might have dented operating margins during the December-end quarter.

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