Nio's Stock Valuation Appears Undervalued
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Should l Buy NIO?
Source: Fool
- Market Performance: Since going public at $6.26 per share in 2018, Nio's stock has consistently traded below $5, with a current market cap of 88.4 billion yuan ($12.7 billion), indicating a valuation of less than one times this year's sales, reflecting market caution regarding its future growth prospects.
- Battery Swap Network Expansion: Nio has expanded its battery swap stations from 777 at the end of 2021 to over 3,500 across China and Europe, demonstrating significant investment in infrastructure and market penetration capabilities in the electric vehicle sector.
- Delivery Volume Growth: Nio's vehicle deliveries are expected to grow from 91,429 in 2021 to 221,970 by 2024, with a projected 336,221 vehicles delivered in 2025, primarily driven by its higher-end models and the newly launched Onvo and Firefly series.
- Profit Expectations: Nio anticipates achieving its first quarterly profit in Q4 2025, with analysts forecasting a 29% CAGR in revenue from 2025 to 2027; if these expectations are met, the stock could potentially rise over 8 times in the next 12 months.
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Analyst Views on NIO
Wall Street analysts forecast NIO stock price to rise
7 Analyst Rating
2 Buy
4 Hold
1 Sell
Hold
Current: 4.950
Low
4.00
Averages
5.90
High
7.00
Current: 4.950
Low
4.00
Averages
5.90
High
7.00
About NIO
NIO Inc is a holding company mainly engaged in the design, development, manufacturing and sales of smart electric vehicles. The Company offers premium smart electric vehicles under the NIO brand, family-oriented smart electric vehicles through the ONVO brand, and small smart high-end electric cars with the FIREFLY brand. The Company focuses on building in-house capabilities including battery swapping, assisted and intelligent driving, digital technologies, electric powertrain and battery, vehicle engineering and design, among others, to control the design and development of the vehicle software and hardware architecture and the critical components.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Nio Reports Delivery Growth and Profit Expectations
- Significant Delivery Growth: Nio's deliveries approached 125,000 vehicles in Q4 2025, marking a 71.7% year-over-year increase, with December deliveries reaching 48,135 units, up 54.6% from the previous year, indicating strong sales momentum driven by its new brands Onvo and Firefly, enhancing market competitiveness.
- Rising Gross Margins: Nio's gross profit margins have steadily improved over the past few years, and despite its new brands being priced lower than the flagship brand, the company anticipates achieving an adjusted operating profit of between $100 million and $172 million in Q4 2025, signaling a positive shift in financial health.
- Battery Swap Network Challenges: While Nio's battery swapping network could potentially become a competitive advantage, its significant upfront investment and ongoing operational costs currently weigh on financials, especially as alternative fast-charging options gain traction in the market, posing profitability challenges.
- Investor Confidence Boost: Nio's announcement of its first adjusted operating profit has bolstered investor optimism about its future, particularly as the company aims for breakeven in 2026, despite the competitive pressures it faces from rivals in the electric vehicle sector.
See More
Nio Anticipates First Adjusted Profit Amidst Challenges
- First Adjusted Profit: Nio anticipates reporting its first adjusted operating profit between $100 million and $172 million for Q4 2025, marking a significant step towards achieving at least breakeven for the full year 2026.
- Significant Sales Growth: In Q4 2025, Nio's sales surged 71.7% year-over-year to nearly 125,000 vehicles, with December deliveries also rising 54.6% to a new high of 48,135 units, indicating strong traction for its new brands Onvo and Firefly.
- Improving Gross Margins: Despite the financial strain from its battery swapping network, Nio has consistently improved its gross profit margin, currently at 11.25%, which lays a foundation for future profitability.
- Increased Competitive Pressure: While Nio's gross margins are improving, its operating margins lag behind competitors due to the high operational costs of its battery swapping network, which may impact its long-term profitability.
See More
French President Celebrates Successful Rocket Launch of 32 Amazon Leo Satellites
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- Pause on Tech Security Measures: Ahead of the Trump-Xi Jinping meeting, the Trump administration reportedly paused several critical technology security measures targeting China, a decision that could influence the future trajectory of U.S.-China tech relations and reduce market uncertainties.
- Apple Court Victory: Apple secured a courtroom win as a jury rejected claims from Optis Wireless that it infringed on 4G wireless patents, a result that will help protect Apple's intellectual property and strengthen its market position.
- AI Industry Developments: Elon Musk criticized AI startup Anthropic for alleged bias while announcing a $30 billion funding round that pushed its valuation to $380 billion, highlighting the intense competition and rapid evolution within the AI sector.
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Analysis of Electric Vehicle Market Prospects
- Lucid Delivery Growth: Lucid delivered 15,841 vehicles in 2025, marking a 55% increase year-over-year, with over one-third of deliveries occurring in Q4, indicating strong market demand despite ongoing profitability challenges.
- Production Capacity Improvement: Lucid's Q4 production surged 116% sequentially and 148% year-over-year, demonstrating significant progress in resolving production bottlenecks, which is expected to further drive future delivery records.
- Nio Delivery Milestone: Nio's Q4 deliveries exceeded 326,000 vehicles, a nearly 72% increase year-over-year, with December achieving a new monthly high, showcasing robust growth momentum despite fierce price competition in the EV market.
- Profitability Outlook Enhancement: Nio anticipates an adjusted operating profit between $100 million and $172 million for Q4 2025, marking a significant step towards achieving the necessary scale for future profitability.
See More
Lucid and Nio Deliveries Surge Significantly
- Lucid Delivery Growth: Lucid delivered 15,841 vehicles in 2025, marking a 55% increase year-over-year, with over one-third of deliveries occurring in Q4, indicating strong momentum in the EV market despite ongoing profitability challenges.
- Production Capacity Boost: Lucid's Q4 production surged 116% sequentially and 148% year-over-year, demonstrating the company's ability to effectively ramp up production of its newly launched Gravity SUV after resolving bottlenecks, setting the stage for future delivery records.
- Nio Delivery Milestone: Nio delivered over 326,000 vehicles in Q4 2025, a nearly 72% increase year-over-year, achieving a new monthly delivery record in December, showcasing its robust growth potential in the EV market despite fierce price competition.
- Improved Profit Outlook: Nio is expected to achieve an adjusted operating profit between $100 million and $172 million for Q4 2025, marking a significant step towards proving its ability to achieve economies of scale and future profitability, although it still faces risks associated with its battery swap network strategy.
See More
Electric Vehicle Market Outlook and Investment Opportunities
- Lucid Delivery Growth: Lucid delivered 15,841 vehicles in 2025, marking a 55% increase year-over-year, with over one-third of deliveries occurring in Q4, indicating strong momentum in the EV market despite ongoing profitability challenges.
- Production Capacity Boost: Lucid's Q4 production surged 116% sequentially from Q3 and 148% year-over-year, demonstrating effective resolution of production bottlenecks and setting the stage for continued record-breaking deliveries.
- Nio Delivery Milestone: Nio delivered over 326,000 vehicles in Q4 2025, a nearly 72% increase year-over-year, achieving a new monthly high of 48,135 vehicles in December, showcasing robust growth driven by new sub-brands despite fierce market competition.
- Improving Profit Outlook: Nio is projected to achieve an adjusted operating profit between $100 million and $172 million for Q4, marking a significant step towards profitability, with plans to break even on an adjusted basis by 2026, boosting investor confidence.
See More
Nio Reports Delivery Growth and Profit Expectations
- Significant Delivery Growth: Nio's deliveries approached 125,000 vehicles in Q4 2025, marking a 71.7% year-over-year increase, with December deliveries reaching 48,135 units, up 54.6% from the previous year, indicating strong sales momentum driven by its new brands Onvo and Firefly, enhancing market competitiveness.
- Rising Gross Margins: Nio's gross profit margins have steadily improved over the past few years, and despite its new brands being priced lower than the flagship brand, the company anticipates achieving an adjusted operating profit of between $100 million and $172 million in Q4 2025, signaling a positive shift in financial health.
- Battery Swap Network Challenges: While Nio's battery swapping network could potentially become a competitive advantage, its significant upfront investment and ongoing operational costs currently weigh on financials, especially as alternative fast-charging options gain traction in the market, posing profitability challenges.
- Investor Confidence Boost: Nio's announcement of its first adjusted operating profit has bolstered investor optimism about its future, particularly as the company aims for breakeven in 2026, despite the competitive pressures it faces from rivals in the electric vehicle sector.
See More
Nio Anticipates First Adjusted Profit Amidst Challenges
- First Adjusted Profit: Nio anticipates reporting its first adjusted operating profit between $100 million and $172 million for Q4 2025, marking a significant step towards achieving at least breakeven for the full year 2026.
- Significant Sales Growth: In Q4 2025, Nio's sales surged 71.7% year-over-year to nearly 125,000 vehicles, with December deliveries also rising 54.6% to a new high of 48,135 units, indicating strong traction for its new brands Onvo and Firefly.
- Improving Gross Margins: Despite the financial strain from its battery swapping network, Nio has consistently improved its gross profit margin, currently at 11.25%, which lays a foundation for future profitability.
- Increased Competitive Pressure: While Nio's gross margins are improving, its operating margins lag behind competitors due to the high operational costs of its battery swapping network, which may impact its long-term profitability.
See More
French President Celebrates Successful Rocket Launch of 32 Amazon Leo Satellites
- Successful Rocket Launch: The French president celebrated the successful launch of Europe's most powerful rocket, which deployed 32 Amazon Leo satellites into orbit, marking a significant advancement in Europe's space capabilities and enhancing its competitiveness in the global space market.
- Pause on Tech Security Measures: Ahead of the Trump-Xi Jinping meeting, the Trump administration reportedly paused several critical technology security measures targeting China, a decision that could influence the future trajectory of U.S.-China tech relations and reduce market uncertainties.
- Apple Court Victory: Apple secured a courtroom win as a jury rejected claims from Optis Wireless that it infringed on 4G wireless patents, a result that will help protect Apple's intellectual property and strengthen its market position.
- AI Industry Developments: Elon Musk criticized AI startup Anthropic for alleged bias while announcing a $30 billion funding round that pushed its valuation to $380 billion, highlighting the intense competition and rapid evolution within the AI sector.
See More
Analysis of Electric Vehicle Market Prospects
- Lucid Delivery Growth: Lucid delivered 15,841 vehicles in 2025, marking a 55% increase year-over-year, with over one-third of deliveries occurring in Q4, indicating strong market demand despite ongoing profitability challenges.
- Production Capacity Improvement: Lucid's Q4 production surged 116% sequentially and 148% year-over-year, demonstrating significant progress in resolving production bottlenecks, which is expected to further drive future delivery records.
- Nio Delivery Milestone: Nio's Q4 deliveries exceeded 326,000 vehicles, a nearly 72% increase year-over-year, with December achieving a new monthly high, showcasing robust growth momentum despite fierce price competition in the EV market.
- Profitability Outlook Enhancement: Nio anticipates an adjusted operating profit between $100 million and $172 million for Q4 2025, marking a significant step towards achieving the necessary scale for future profitability.
See More
Lucid and Nio Deliveries Surge Significantly
- Lucid Delivery Growth: Lucid delivered 15,841 vehicles in 2025, marking a 55% increase year-over-year, with over one-third of deliveries occurring in Q4, indicating strong momentum in the EV market despite ongoing profitability challenges.
- Production Capacity Boost: Lucid's Q4 production surged 116% sequentially and 148% year-over-year, demonstrating the company's ability to effectively ramp up production of its newly launched Gravity SUV after resolving bottlenecks, setting the stage for future delivery records.
- Nio Delivery Milestone: Nio delivered over 326,000 vehicles in Q4 2025, a nearly 72% increase year-over-year, achieving a new monthly delivery record in December, showcasing its robust growth potential in the EV market despite fierce price competition.
- Improved Profit Outlook: Nio is expected to achieve an adjusted operating profit between $100 million and $172 million for Q4 2025, marking a significant step towards proving its ability to achieve economies of scale and future profitability, although it still faces risks associated with its battery swap network strategy.
See More
Electric Vehicle Market Outlook and Investment Opportunities
- Lucid Delivery Growth: Lucid delivered 15,841 vehicles in 2025, marking a 55% increase year-over-year, with over one-third of deliveries occurring in Q4, indicating strong momentum in the EV market despite ongoing profitability challenges.
- Production Capacity Boost: Lucid's Q4 production surged 116% sequentially from Q3 and 148% year-over-year, demonstrating effective resolution of production bottlenecks and setting the stage for continued record-breaking deliveries.
- Nio Delivery Milestone: Nio delivered over 326,000 vehicles in Q4 2025, a nearly 72% increase year-over-year, achieving a new monthly high of 48,135 vehicles in December, showcasing robust growth driven by new sub-brands despite fierce market competition.
- Improving Profit Outlook: Nio is projected to achieve an adjusted operating profit between $100 million and $172 million for Q4, marking a significant step towards profitability, with plans to break even on an adjusted basis by 2026, boosting investor confidence.
See More
