Things are looking better for NIO, the Chinese EV automaker, but the stock has been hammered recently hitting a 52 week low of $3.60.
The overbuying explosion back in March was due to unjustified hype after CEO William Li appeared on 60 minutes and talked about the future of EV cars
While NIO may struggle in the short term, I like their long term outlook and will continue adding to my position as a long term growth investor.
Here’s some key takeaways from the recent Q1 earnings release as per Nasdaq:
- Total revenue was $253 million, a 52% decrease from Q1 2018
- Deliveries of the ES8 reached 3,989 in the first quarter of 2019, compared with 7,980 vehicles delivered in the fourth quarter of 2018.
Sales have taken a massive hite due to changes in the China subsiidy and a slowdown in the Chinese economy. However, Nio only sells 1 product: the ES8.
They already have 12,000 preorders for a smaller SUV called the ES6, which is more affordable and practical for most Chinese consumers.
Nio Stock is Plummeting: Is it the time to Buy right now?
Right now, investors are definitely afraid to catch a falling knife and shares seem to be heading towards $3 or less. I like the current price of Nio and will be adding to my portfolio at this price point with the intent of holding my shares for the next 5 to 10 years.
Companies like Nio don’t come around often so when I see something like this, I make sure to own a portion and watch revenue and earnings closely.
The delivery of the ES6 will add a lot of revenue to the company and we’ll now more once the SUV is released.
If you follow in Warren Buffett’s mantra: “Be greedy when others are fearful and fearful when others are greedy” then this looks like a good time to consider adding a position.
Disclosure: I am long shares of Nio stock. I am not a financial advisor so please due your own personal research and analysis before investing in any company. I did not receive any compensation to write this article.
While his background is mostly related to trading stocks, he recently gained interest in real estate crowdfunding with Fundrise.