It has been a season to remember for Nio (NYSE:NIO), which has shot up the charts this past summer. The EV company is up some 85% over the past three months, and the company’s Q2 2025 earnings report released yesterday certainly included some promising news.
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The company’s Q2 2025 deliveries of 72,056 were up 25.6% year-over-year, and quarterly revenues of $2.65 billion were among the highest the company has ever reported. Though top-line figures missed analyst projections by more than $100 million, the company’s non-GAAP operating loss improved by roughly a third from Q1.
The company is gearing up for more, expecting EV deliveries for the current quarter to hit between 87,000 and 91,000 vehicles. This would represent year-over-year growth of 40.7% to 47.1%.
NIO does remain pre-revenue, however, meaning that those looking to invest need to overcome some squeamishness at a company which had a cash burn of almost $700 million in Q2.
Among the skeptics is top investor Danil Sereda, who despite the “stunning” delivery numbers, isn’t ready to dive on in.
“I’m still skeptical regarding the cash burn, especially seeing NIO’s current asset base shrinking by over 15% QoQ (in RMB currency),” explains the 5-star investor, who is among the top 2% of TipRanks’ stock pros.
Sereda is not fully reassured by an improvement in the company’s gross profit margin, pointing out that NIO’s vehicle margin decreased year-over-year from 12.2% to 10.3%. Moreover, the investor notes that NIO is not expected to breakeven until after FY2028, meaning that current shareholders could find their valuations diluted.
“Ongoing losses will likely require additional equity financing, hurting shareholders,” emphasizes Sereda.
Another major concern for the investor is the tough domestic market in China, where Sereda anticipates the pricing war will continue heating up.
In other words, Sereda will be taking a cautions approach going forward.
“The rising competition in China and likely dilution ahead, are what make me stay on the sidelines and reiterate my Hold on the stock today,” sums up Sereda. (To watch Danil Sereda’s track record, click here)
Wall Street is split almost evenly between 6 Buys and 5 Holds – along with a solitary Sell – giving NIO a Moderate Buy consensus rating. However, its 12-month average price target of $5.82 has a downside in the single digits, indicating that even those who are positive about the company don’t see much of an upside for now. (See NIO stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.