NIO Fundamental & Technical Analysis


Chart done on daily timeframe. NIO is another Chinese stock that’s become a victim of geopolitical tensions and unrest. Like many of its China based peers, the company has impressive numbers, but investors are just too uncertain to buy. This could be seen as a major opportunity because chances are, tensions will either simmer down, or Wall Street will find them too good of a risk/reward investment to pass up. NIO in specific has grown its revenue from under 1B in 2018 to over 7B last year. Their market cap is only 9B currently, meaning they’re close to grossing as much as revenue as their market valuation. Their balance sheet has a positive asset to liabilities ratio, but cash flow and profitability are negative. NIO is fighting an uphill battle being fairly new in the electric vehicle field. They have made their mark, but it’ll likely take them years to turn any profit, if they ever do. Tesla only became profitable a few years ago, and they have slowly shrunk their profit margin in recent quarters. It is difficult to establish yourself in such a competitive field, but nonetheless, NIO still managed to deliver 160,000+ vehicles last year. There’s hope for them, but chances are the tensions between China and the U.S. need to calm down before confidence grows for buyers. 

We see Chinese stocks as a big opportunity right now because many are undervalued. The chances of them ever getting delisted are very low, but should still be kept in mind when positioning. Only a small portion of a portfolio should be kept in foreign investments in general because they’re high risk high reward, but the reward is worth it at these valuations.