Nio Inc – ADR (NYSE: NIO) is running for the top in the pre-market hours this morning, and for good reason. The company reported its unaudited financial results for the third quarter, beating expectations and exciting investors. Of course, the excitement is leading to strong gains in the value of the stock. Today, we’ll talk about:
- The financial results;
- what we’re seeing from NIO stock;
- and what we’ll be watching for ahead.
NIO Edges Up On Financial Results
As mentioned above, Nio is having a great day in the market today after reporting its unaudited results for the third quarter. Here’s what we saw from the earnings report:
- Revenue – Revenue proved to be a big hit with the company reporting that it generated $214 million in the third quarter. That’s a massive, 3,095.3% increase on a quarter-over-quarter basis.
- Gross Margin – Gross margin came in at negative 7.9%, once again, showing strong quarter over quarter growth. In the second quarter, gross margins were negative 333.1%.
- Loss Per Share – During the quarter, the company said that losses per share came in at $6.20.
From a financial standpoint, NIO is clearly doing good when it comes to generating revenue. That revenue is being generated through the production and delivery of its vehicles, which ramped up in a big way in Q3. In fact, during the quarter, the company produced 4,206 ES8 vehicles, 3,268 of which were delivered during the quarter. In the second quarter, the company only produced 500 vehicles, 100 of which made it to delivery in the quarter.
In a statement, William Li, Founder, Chairman and CEO at NIO, had the following to offer:
The third quarter 2018 marked multiple milestones for NIO in the journey to achieve our ‘blue sky coming’ vision… We completed our first full quarter of production and delivery of the ES8 and successfully executed the Company’s initial public offering on the New York Stock Exchange.
We have delivered 4,941 ES8s to users in over 170 cities in China by the end of October 2018. NIO Power has successfully supported initial needs of ES8 users and NIO Service has exceeded expectations. We have been receiving valuable feedback from the NIO community, represented by increasing active users of NIO APP, and the NIO brand is gaining acceptance as a premium brand. Our focus remains resolute to deliver vehicles with the highest quality, to improve the holistic experience and to prepare for the launch of the ES6, the Company’s five-seater electric SUV.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of NIO, the news proved to be overwhelmingly positive. After all, strong vehicle sales have led to strong margins. Sure, there’s a good argument that the company needs to do some serious work on margins and that operational losses were a bit much, but for this stage of the game, the company did overwhelmingly well and investors are cheering. As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (7:25), NIO is trading at $7.32 per share after a gain of $0.64 per share or 9.58% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on NIO. In particular, we’re interested in following the story surrounding the continued growth in vehicle production and vehicle sales. Interestingly, it took NIO only a few months to accomplish what took Tesla years. So, this company may soon emerge as a major player in the space. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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