NIO (Nasdaq: NIO) shares were down nearly 10% following the company's Q4 results which showed the company exceeding analysts' estimates for most metrics. However, the company disappointed investors in terms of its forecast for vehicle deliveries which sent shares lower.
NIO was one of the top-performing stocks during the initial phase of the bull market when growth stocks dominated. The stock rose 2,900% between its lows and its highs in early February of last year. Since then, the stock declined by more than 80% before bottoming in early March. Since this low, the stock has climbed nearly 50% higher.
Despite these steep losses, NIO has fared better than many of its EV competitors. The business continue to gain momentum despite the stock's big drop, indicating that valuations are much more favorable. It's also proven the ability to generate demand, incite public interest, and start production at scale which can't be said for any EV maker other than Tesla (TSLA).
Inside the Numbers
In Q4, NIO reported a loss of $0.16 per share which was better than analysts' estimates of a loss of $0.21 per share and slightly more than last year's loss of $0.14 per share. Revenue also topped expectations at $1.56 billion vs $1.53 billion. This was a 52% improvement from last year.
The biggest factors in this beat were better-than-expected volume growth and an increase in margins. However, shares were lower as Q1 deliveries forecast came in below expectations. The company also reiterated plans to launch 3 new models this year and continue its international expansion.
93% of revenue was derived from vehicle sales with the other 7% coming from regulatory credit and battery upgrade and maintenance services. Margins on a per-vehicle basis came in at 20.9% vs 17.2% last year. This improvement is due to higher production levels leading to lower per-unit costs.
NIO's major challenge going forward will be about continuing to scale up production. Currently, there are considerable short-term fluctuations due to the company upgrading its manufacturing facilities which caused production to decline in October, but it returned to full capacity in November and December with over 10,000 vehicles delivered.
However, sales have softened in the first 2 months of 2022. Some are attributing this to the Chinese New Year and lockdowns, while other investors are concerned about slowing momentum, contributing to the stock's weakness.
In Q1, NIO expects revenue between $1.51 billion and $1.57 billion, equating to revenue growth between 21% and 25% and below estimates of $1.67 billion in revenue growth. It also expects between 25,000 and 26,000 delivered in Q1.