Nio (NIO) stock has declined about 8% over the past five trading days and nearly 21% year to date, as the escalating trade war between the U.S. and China, intense competition, continued shareholder dilution, and the electric vehicle (EV) maker’s disappointing Q4 financials weigh on investor sentiment. Given these multiple challenges, Wall Street remains sidelined on Nio stock.
Nio’s Q4 2024 deliveries grew by 45% to 72,689, but revenue increased by only 15%, reflecting the impact of price discounts and incentives amid heightened rivalry in the EV market. Overall, investors were disappointed with the revenue miss and widened net loss, as worries about when the Chinese EV maker will become profitable continue to persist.
Wall Street Remains Wary About Nio’s Prospects
Following the Q4 print, Bernstein analyst Eunice Lee reaffirmed a Hold rating on Nio stock with a price target of $4.50. The analyst noted the Q4 miss and explained that the company lagged revenue expectations as higher volumes were offset by lower average selling price (ASP), mainly due to increased promotions and a worsened product mix associated with the ramp of the ONVO sub-brand. Notably, ONVO represented 27% of Nio’s Q4 2024 sales volume.
The 4-star analyst was also disappointed with ONVO’s volumes. The analyst highlighted that only 5.9k and 4k units of ONVO L60 were delivered in the first two months, compared to the guidance of 20k per month. He added that with 449 ONVO stores in operation, the company is only generating 10 sales per store per month, reflecting dismal sales store efficiency and high selling, general, and administrative expenses. Given the launch of several new models in the BEV (battery electric vehicle) SUV market, like Tesla’s (TSLA) Model Y Facelift and Xiaomi’s (XIACF) YU7, Lee expects further downward pressure on ONVO. He also remains cautious on the Firefly sub-brand.
Likewise, Bank of America Securities analyst Ming Hsun Lee lowered the price target for NIO stock to $4.90 from $5.00 while reaffirming a Hold rating. The 5-star analyst prefers to stay on the sidelines on Nio stock, as he expects positives from higher volumes in 2025 to be partially offset by slower margin expansion and high operating expenses.
Is NIO Stock a Buy, Sell, or Hold?
Overall, Wall Street has a Hold consensus rating on NIO stock based on two Buys, seven Holds, and two Sell recommendations. The average NIO stock price target of $4.93 implies 42.5% upside potential.
