Can Nio stock reach $1000? - Finance with Tapos Kumar (2024)

Can Nio stock reach $1000?Geopolitically, yes, but historically, no. The historical accounting data doesn’t support Nio stock going $1,000.Nio has faster-growing trends & better battery technology than Tesla, which could be a game changer.

However, a stock investment depends more on industrial trends & effective management. Nio has both, like its competitors. So, based on these two factors, Nio stock will not get competitive benefits to expand the market.

As a stock investor, you know clean energy can replace fuel cars in the future. Can Nio Inc. be one of them? Why not BYD, Rivian, XPeng or other EV stock?

If you are serious about investing in EV stock and have many questions but cannot find a logical explanation, then you are in the right article.

This blog post will teach you every component of Nio stock that is positively associated with stock performance.

Let’s start with the following.

• Nio stock has enough potential to outperform, but it would be pretty challenging to reach $1,000

• Nio has better battery technology than Tesla, which could be a positive sign for stock price.
• Geopolitically, Nio has an advantage within China, but how much global market Nio will capture depends on the government’s policies.
• Nio captures the EV market faster than competitors. So, it would not be a surprise to reach $1,000
• BYD equally capture the market like Nio. So, Nio will face tough competition to be a giant EV firm.

Nio P/E ratio?

The P/E ratio is negative & consistently falls with prior years. It fluctuates & shows recovery, which is suitable for stock.

However, Nio Inc.’s P/E ratio doesn’t fall under the standard range (15 to 25), which suggests poor earnings against price. Italso indicates a good time to buy because the current price of Nio stock is less than its intrinsic price.

ButNio stock is heavily undervalued, which also signals a potential crash. Then itsP/E performance against Tesla (One rival) doesn’t indicate Nio can beat Tesla. The P/E ratio of Tesla seems stronger financially compared to Nio Inc.

So, whether Nio stock reaches $1000 is becoming a question due to its past P/E performance. But historical data doesn’t indicate future stock growth. So, my analysis is neutralon the question,Can Nio stock reach $1000?

Nio PEG ratio?

The PEG ratio of Nio Inc. shows negative but decreases over time. Though recovering, it doesn’t indicate a good correlation between current stock price & future earnings growth. Usually, a 1 PEG ratio is considered safe for stock investment, but Nio doesn’t match that. Can Nio come back in the upcoming days? It is hard to say, but it has some potential.

However, Nio performs poorly compared to its competitors. Tesla & other competitors show a more promising ratio performance than Nio.If Nio wants to beat its peer company, it has to perform about 20 times better, which is unreasonable.

However,EV is a trending industry and is heavily impacted by geopolitics. So, anything could happen. Based on Nio’s past PEG ratio performance, my analysis is neutral again on Whether Nio stock can reach $1000.

Nio EPS?

Nio’s EPS ratio indicates poor financial health. It means being unable to make enough profit & continuously facing new challenges. Usually, a company faces such challenges ifthey have bad operational performance due to temporary barriers.

Conversely,Tesla, BYD, GM & other competitors show more substantial EPS data than Nio. According to past EPS data, Nio must catch up to its competitors.

You may now ask? Should I buy Nio stock if it continuously shows a down pattern? Yes, but it would be best to consider whether it has enough potential to grow the market.

Can you remember Beyond Meat (BYND), a plant-based meat substitute company? Their EPS was negative but later became a profitable stock due to demand & market expansion.

So, my analysis is neutral on Whether Nio stock can reach $1000.

Nio P/S ratio?

Nio’s price-to-sales ratio seems better than Tesla’s. Nio’s P/S ratio continuously decreased, but Tesla faces fluctuation.

Regarding Volkswagen & General Motors, Nio performs under, i.e., investors pay more to earn $1 than peers’ companies.

However, it doesn’t signal that investors will lose confidence in the Nio shares. Instead, they will focus on future growth potential.

It is hard to predict that Nio stock will crash, but expecting it to rise to $1,000 would be bullish. To outperform shares, Nio has to overcome many challenges, such as geopolitics and macroeconomic crises. It is a matter of management dedication & positive external support.

So, based on the above facts, my analysis is neutral on Whether Nio stock can reach $1000.

Nio ratio?

Nio’s return on Equity ratio doesn’t suggest they are so successful in investing shareholders’ money to generate more profit. Nio also lags behind Tesla & other competitors, which means Nio’s debt-to-equity Ratio needs to be solid to beat peer companies.

The debt-to-Capital Ratio seems favorable for stock investment. Nio has less debt & collected cash without borrowing. So, compared with Tesla, Nio has less dependency on debt money, which indicates a positive sign for investors.

The operating margin ratio seems unstable, which indicates a continuous struggle to meet revenue expenses. A negative operating ratio indicates less financial solvency than Tesla. At this point, Tesla is financially stronger to meet operating expenses than Nio Inc.

Nio’s Enterprise Value to EBIT ratio is reducing over time. Nio Inc. has a more stable stock price than Tesla, which is favorable for stock investment. Nio has more investors’ confidence over time than Tesla, which will help them to increase shareholder numbers & customer acceptability.

Nio’s interest coverage ratio needs to be solid to pay debt obligations. Its negative Interest Coverage Ratio suggestsless operating profit to meet interest expense, which could be better for stock investment.

Tesla is stronger at paying interest costs than Nio Inc., which means Nio must recover it. A negative Interest Coverage Ratio doesn’t signal a stock crash if they have enough potential to balance the gap.

The acid test ratio dictates enough liquid money to pay current liabilities. Nio has double more assets than liabilities to pay quick obligations. Compared to Tesla, Nio has less solvency. Though each company has a positive quick Ratio & meets standard 1:1 value, Tesla has more liquidity strength than Nio.

Nio has a mixed performance based on past ratio statements. Ratios are just one parameter that cannot display the complete investment picture. Tesla’s ratio statement shows more promise than Nio stock, but it doesn’t mean that Nio can’t beat Tesla.

The EV industry is heavily related to geopolitics. Therefore, financial analysis could be wrong if there is geopolitical change.

So, my analysis is neutral on Whether Nio stock can reach $1000.

Nio Income statement?

Nio Inc.’s income statement indicates down growth. Though sales increased over the years, operating expenses rose more than that.

Nio has a negative net profit trend, but it shows a recovering approach that indicates a positive management approach. But Nio’sincome statement doesn’t indicate better performance than its peer companies.

However,a negative income statement for a tech company doesn’t signal a long-term crisis. It is natural for tech companies to take huge orders but need more time to deliver due to a resource crisis. Nio has enough potential to recover from that.

So, my analysis is neutral on Whether Nio stock can reach $1000.

Nio cash flow statement?

Nio’s cash flow isn’t more promising than Tesla’s. It has mixed operating activities that indicate fluctuating performance over the years.Nio is continuously struggling to expand its market due to poor operating performance compared to its peer company.

Investing activities indicate a lower number of external projects that stop them from capturing the market. Nio’s investment comparatively increased in the initial years, but they needed help to collect cash. It could happen due to credit sales or some political crisis. Can Nio recover it within the short term? It’s possible, but that would be very challenging.

Financing activities show positive trends with some fluctuation.Nio’s cash increased about 42% over the years, but we can’t assume this only from cash sales. It could be from dividends or external loans.

Nio’s net cash shows promising growth from 2021 to 2022. Initially,it started with a deficit, but after 4 years, it increased by about 100%. We can’t boldly predict that Nio has zero chance of going bankrupt, but it has some potential to grow in the upcoming years.

So, based on the above-mixed performance,my analysis is neutral on Whether Nio stock can reach $1000.

Nio balance sheet?

Nio Inc.’s total fixed assets have significantly risen over the years. It suggests Nio’s continuous investment in manufacturing segments such as EV research & development.Long-term investment needs significant commitment to capture growing market trends; otherwise, Nio could go bankrupt. Nio is a Chinese EV manufacturing company with rapid growth, so investing in long-term projects is reasonable.

Nio’s current assets have risen at a double pace in the last 2 years, which indicates their operating efficiency.Operating solvency also suggests a better capability to meet short-term obligations.

Nio’s net equity fluctuates often but is an overall rising trend. These trends indicate investors have mixed confidence in Nio stock, but that doesn’t indicate they do not buy stock.

The liability & debt also rise over the year, which means Nio has external borrowing. Their cash doesn’t solely come from EV product sales. Instead, significant liquid money comes from third-party obligations. Can Nio crash in the upcoming years?No, debt is a common finance source for tech companies & if there are huge orders, that doesn’t create a long-term problem.

Does Nio have huge orders? Yes, & Nio could be a rival for Tesla like BYD.

Nio’s Cash and short-term Investments drop over time, which indicates they expense most of the cash to maintain operational costs. Usually,when a company has mass production & limited sales or somehow drops product sales, then they face Cash & Short-Term Investments shortage.

Now, can Nio stock reach $1000? They may have to expand the market, cheap labor, available resources & stable geopolitics.

So, my analysis is neutral on Whether Nio stock can reach $1000.

Nio Inc market cap?

Nio is a dominating EV company in China. It started with a small market, but it captured the market at a double pace. Geopolitics could help Nio to grow faster than others.(data source=Nio Investor Relations)

How?Well, China is trying hard to beat America in every sector. Nio Inc. may be a Chinese government nepotism company, or the Chinese government may have a favorable policy on Nio’s growth. If this government support continues, then Nio could be a giant EV firm like Tesla.

Nio global EV market share forecast?

Nio’s EV market started to rise in 2023. Nio has some strategic plans to enter the global market, such as Europe & seems successful. Their growing market presence indicates a positive signal to be one of the significant EV producers like Tesla. Now, you may think that Tesla & others have good brand recognition & long-time dominating power.Can Nio beat Tesla or BYD?

The short answer is yes. China has political influence in Africa & some Asian countries. Europe has political problems with China, but that doesn’t mean all of the European nations don’t buy Chinese products. China now focuses on Latin America & Middle East. If they capture that market, then Nio will definitely be an EV giant.

Cheapresources, battery technology, and available laborare essential factors that help reduce EV prices. So, Tesla & other US EV companies must find alternatives for China.

You can take the example of two Chinese companies:TikTok & Binance. YouTube faced a tough challenge due to TikTok’s popularity, then Binance, one of the leading Crypto exchange platforms that dominate the Bitcoin market. Geopolitics destroys these two giants, but they still have a good market presence.

The above examples suggest that Chinese EVs are of good quality and have lower prices to beat big brands like Tesla. So, the ultimate challenge comes for Western EV firms rather than for Chinese companies.

India is another Asian power that has maximum positive diplomatic relations all over the world, i.e., India can capture more market than China. Positive diplomatic relations are helping India minimize geopolitical enemies, i.e., create more friends than enemies, which is an essential component to keeping the growth pace at a stable rate.

So, Nio has a better chance to grow in the upcoming years.

Nio stock price?

The Nio stock price fluctuates over time, which indicates lower sales than expenses. 2021 was the highest price year, but Nio failed to keep that level for a long time. Nio Inc. may face rising raw material costs that imbalance EV prices & manufacturing costs.Can Nio overcome this macroeconomic crisis within a short time? No, but in the long term, yes.

Inflation hit all EV firms, so this doesn’t create any competitive advantage for Tesla or others. Nio stock started to be fixed from the last of 2023 & it signals an upward trend in the upcoming years. Nio needs more external investment & government subsidies.If the Chinese government becomes serious & provides all the support, then Nio stock could be 100x stock.

So, based on the historical price chart, it is hard to predict that Nio stock will react to $1000.

Nio Inc stock forecast?

Based on historical accounting data, Nio stock doesn’t seem reasonable to reach $1,000. Nio is facing more risks than Tesla & it would not be easy to beat competitors.

Let’s understand it from the following mathematical scenario,

Is it achievable? Yes, can you rememberChipotle’s stock in 2015 that grew more than 11,000% due to strategic business models & growing industry trends?

Chipotle Mexican Grill had achieved it due to an exceptional management team & positive government policy.

Does Nio Inc. have that? We can’t say directly yes because there are many Chinese EV companies. The Chinese government may favour Nio to grow faster or could support other Ev firms. So,it’s a 50-50 situation.

In short, if the Chinese government wants to expand the Nio market by implementing positive policies, then Nio stock could reach $1,000.

Investment doesn’t follow theory; instead, it is a matter of mathematical explanation. Nio has some limitations & how they overcome them, which completely depends on management.

Nio Inc. has recently facedshort sales, political crisis, inflation, long-term debt & competitors.

Risk score= Favorable factors × risk factors

= 5 × 5

= 25

Growth score= 100-25

=75

So, Nio stock will maximum down (long-term) =Current stock price- Current stock price × 25%

= $8.24 – $8.24 × 25%

= $8.24 – $2.06

= $6.18

Tesla stock will maximum up (long-term) =Current stock price + Current stock price × 75%

= $8.24 + $8.24 × 75%

= $8.24 + $6.18

= $14.42

Below are the table details on Nio stock price forecast. [ Price could slightly vary depends on risks covering performance]

Concluding Thought

Nio is a buy stock. The electric vehicle has a promising future & many researchers also believe that clean energy would be the next alternative to gasoline.

As a finance researcher, I strongly agree that future cars will be electric. Nio Inc. has many strengths and weaknesses & its recent performance proves its commitment.

However,we have no promoter’s info publicly. Promoters play a crucial role in the rise of share prices. If Nio Inc. can prove to have stable management, i.e., zero internal management conflict, then Nio stock can outperform one.

So, whether Nio stock reaches $1,000 depends on geopolitics & management commitment.

Frequently Asked Questions (FAQ)

Nio Inc stock symbol?

The Nio Inc. stock symbol isNIO. Nio Inc. exchanges its stock on the New York Stock Exchange (NYSE). You can use the NIO symbol to trade & identify stock from other companies.

Disclaimer

The information provided in this article is author’s view & only for educational purposes. Also, the intention of this article is not hurting any stock analyst. This is not a sponsor post & not an investment advice. Do your research before making any important financial decision. Therefore, FinanceIdeas.org will not be liable for your financial loss.