NIO Inc. Downgraded to Hold Amid Revenue Growth and Strategic Challenges

DBS analyst Rachel Miu maintained a Hold rating on NIO Inc. Class A (9866 – Research Report) today and set a price target of HK$38.00.

Rachel Miu’s rating is based on several key considerations. Despite a 19% year-over-year increase in vehicle revenue driven by a 40% rise in vehicle sales, NIO Inc. faces challenges due to a lower average selling price resulting from a change in the product mix. The company’s vehicle margin saw a slight improvement, but the weaker-than-expected guidance for the first quarter of 2025 and the underperformance in the fourth quarter of 2024 are likely to impact the stock’s near-term performance.
Additionally, while NIO is set to launch several new models and brands in 2025, including the Firefly and ONVO L90, the transition to a new vehicle platform may lead to inconsistent sales trends until the production process stabilizes. The anticipated increase in costs related to new stores, brand marketing, and research and development is expected to widen the non-GAAP net loss for fiscal year 2025. As a result, the target price has been adjusted downward, and the stock has been downgraded to a Hold rating, reflecting these challenges and uncertainties.

According to TipRanks, Miu is a 4-star analyst with an average return of 17.9% and a 48.91% success rate. Miu covers the Consumer Cyclical sector, focusing on stocks such as Geely Automobile Holdings, Nexteer Automotive Group, and XPeng, Inc. Class A.