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NIO tops forecasts with latest results

Yahoo Finance’s Adam Shapiro and Seana Smith speak with Ines Ferre for the latest numbers from electric car maker NIO.

Video Transcript

ADAM SHAPIRO: Ines Ferre is joining us now because everything is Tesla, Tesla, Tesla. But not so fast. Nio, Nio, Nio, which I don't know how that translates, but, you know, Nio is getting some action here. And--

INES FERRE: It sure is. The Chinese electric vehicle company just reported its third quarter results, beating on the top and the bottom line, coming in with revenue of $666.6 million. That came in above estimates. Its adjusted loss per share came in at $0.14. That's narrower than what the Street had been expecting. Its gross margin was 12.9%. That was also a beat. And the company also raised its revenue guidance. That beat estimates.

The company says that it's going to be seeing deliveries anywhere between 16,500 to 17,000 vehicles for the fourth quarter. And in their earnings release, the founder William Bin Li highlighted basically record quarterly deliveries of over 12,000 vehicles in the third quarter, also followed by its best ever monthly deliveries of 5,055 vehicles in October. This stock year to date is up over 1,000%. In after hours, I've seen that it's been a bit volatile. I believe it's down right now. It was in the green earlier. The Street has 11 buy ratings on this stock, five holds, and two sells.

But really, the Nio story has been the-- it's acceleration as far as deliveries are concerned month over month this year, with October being a record high. Also leasing its batteries, announcing a launch of leasing its batteries during the third quarter. Its battery swap technology, which it has, and also a liquidity injection that it received during the pandemic. So a lot of bulls out there as far as Nio is concerned.

SEANA SMITH: Ines, when you take a look at these numbers, though-- I mean 1,000% gain that you were talking about in the stock-- how much of this is a bet on the future? Because when you take a look and drill down into the numbers, that vehicle deliveries that you rattled off aren't that impressive when you stack up against many of the other automakers.

And then, of course, they also don't have a lot of vehicles just in terms of models. And I know we're supposed to expect some new models in the not too distant future. But I still think, though, when you take a look at the stock performance, it almost doesn't add up to what we're seeing from Nio so far.

INES FERRE: And that's why you also had shortseller Citron Research last Friday, which basically said that the stock is going to go to $25 a share. He said that that valuation just can't be justified, citing basically Tesla's market share, its size. And look, when you compare Tesla to Nio, yes, Tesla is much bigger. I mean, Nio had over 5,000 deliveries in October.

But Tesla-- last year, Nio had 20,500 deliveries. Tesla had 368,000 deliveries. So you can see that Tesla has much larger deliveries. Last month, Tesla delivered more than half-- more than double what Nio delivered. So but as far as the pace at which Nio is growing, that's what you're looking at. And you're right. A lot of this is based on the future.

Also, keep in mind that the electric vehicle space has had a lot of tailwinds from a lot of capital that's been flowing into these companies. So as Tesla has surged, so have some of these other EV startups. In fact, you had Xpeng's vice chairman just last week that was talking to Brian Sozzi, saying that the rise of Tesla has helped his company.

And also, of course, the incentives in China against air pollution, because China wants to have 25% of its vehicles by 2025 being electric vehicles. So certainly, this is what's helping out these EV startups. But Nio is one to watch, one that analysts have been watching. And many analysts saying that they can coexist, that you can have Tesla and Nio coexisting in China.