Nio (NYSE:NIO) Stocks had one of their best days in weeks today, rising 12% through 12:40 p.m. ET Thursday.
After losing more than 50% in the first half of 2024, Nio stock appeared poised to rebound at its next earnings report in anticipation of higher revenues and improved margins. The company did not disappoint, giving investors a chance to get their hands on the electric vehicle (EV) stock today.
Nio’s deliveries and margins finally recover
Nio released its second quarter earnings report Thursday morning. Here are some key numbers to know (all changes are year-over-year unless otherwise noted):
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Vehicle deliveries: up 144% to 57,373 units and up 91% quarter-on-quarter.
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Revenue: Up 99% to $2.4 billion.
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Vehicle margin: 12.2% vs. 6.2% in the same quarter a year ago and 9.2% in the first quarter.
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Gross margin: 9.7% versus 1% in the same period last year and 4.9% in Q1.
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Net loss: Down 16.7% to $694 million.
The numbers speak for themselves.
One of the biggest reasons Nio stock has been down in recent months has been a decline in shipments and margins. However, lower production was largely to blame as the China-based EV maker has been upgrading models to its next-generation platform. With the upgrades completed in April, I would expect Nio’s shipments, and therefore margins, to recover.
Nio delivered a record number of electric cars in the second quarter, capturing more than 40% of the Chinese market for electric cars with a battery life of more than 300,000 yuan in that quarter.
Should You Buy Nio Stock Now?
Nio expects to deliver a record number of EVs in the third quarter. It also launched a mass-market brand called Onvo in the second quarter and had already opened 105 Onvo stores as of Sept. 1. Nio expects to officially launch and begin shipping Onvo’s inaugural model, the L60 SUV, this month.
While this all sounds good and could drive Nio stock higher, I must warn you: Q2 was an exceptional quarter, so don’t expect Nio’s numbers to be as bombastic in the coming quarters. In other words, Nio’s shipments and margins recovered in Q2 and should now be stabilizing after a long period of dormancy, which in itself should be enough for the stock to maintain momentum.
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Why Nio Stock Soared Over 10% Today was originally published by The Motley Fool
