Chinese EV maker Nio (NIO) released its mixed second-quarter earnings results yesterday, with the stock up 3% to close at $6.58. The company reported quarterly sales of $2.65 billion, up 9% year-over-year but below the consensus estimate of $2.73 billion. Meanwhile, adjusted earnings per ADS came in at $0.32, slightly ahead of the $0.31 forecast. Following the results, Mizuho Securities analyst Vijay Rakesh raised the price target to $6 from $3.50 per share and maintained a Neutral rating on the stock.
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It is worth noting that Rakesh ranks 121 out of more than 10,000 analysts tracked by TipRanks. He has a success rate of 60%, with an average return per rating of 21.20% over a one-year timeframe.
Analyst Highlights Strengths and Risks for NIO
Rakesh, a 5-star analyst, noted stronger demand for Nio’s new vehicles, including the ES8 and the Onvo L90, with production picking up pace. Nio has guided for 89,000 deliveries in Q3, representing 44% year-over-year growth. Still, he warned that the full-year goal of 120,000–150,000 units may be hard to hit, as the current monthly pace of about 37,000 deliveries would need to climb much higher.
Turning to profitability, gross margin for Q2 came in at 10%, a little below forecasts, while vehicle margins improved to 10.3%. Rakesh expects Q3 margins to edge up to about 10.7%, helped by lower material costs and more sales of the L90. Even so, he warned that long-term goals above 20% will be difficult as price competition in China’s EV market stays intense.
Looking ahead, the analyst pointed to upcoming models in 2026, including the ES9 and ES7, as possible growth drivers. Nio’s Investor Day, set for late September, will focus on the ES8 and the company’s in-house NX1931 chip. While these moves could boost demand, Rakesh is cautious about whether new models will keep momentum going beyond their initial launch.
Valuation Is in Line with Peers
On the valuation front, Nio trades at about 0.8x projected 2026 sales, roughly in line with XPeng (XPEV) and Li Auto (LI). Rakesh sees the stock as fairly valued, with better EV demand balanced by ongoing margin pressure. For now, he believes the shares reflect both the progress in deliveries and the ongoing risks from pricing pressure in China’s EV market.
Is NIO Stock a Buy?
On TipRanks, Nio stock has a Moderate Buy consensus rating based on six Buys, five Holds, and one Sell rating. The average Nio price target of $5.59 implies 15.05% downside potential from current levels. Meanwhile, NIO stock has surged 51% so far this year.
