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Analyzing NIO and Its Peers before Its Q1 Earnings


May. 24 2019, Published 12:54 p.m. ET

NIO’s first-quarter earnings

NIO (NIO) is scheduled to release its first-quarter earnings results before the US market opens on May 28. Before we find out what Wall Street analysts expect for the company’s first-quarter earnings, let’s take a closer look at NIO and its peers’ recent stock price movement.

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Ongoing sell-off in NIO stock

NIO stock started 2019 on a solid note. The stock rose 23.7% and 21.4% in January and February, respectively. However, the stock saw a massive sell-off in March after it released its fourth-quarter earnings results. In March and April, the company fell 46.7% and 4.9%, respectively.

NIO stock has extended these losses. NIO stock has fallen 19.0% month-to-date as of May 23. Investors’ low expectations from the company’s first-quarter results could be driving the stock lower. On May 23, NIO stock fell to its all-time low of $3.83 after violating an important psychological support level near $4.00.

Peer comparisons

Baidu (BIDU), Alibaba (BABA), and Tencent Holdings (TCEHY) have lost 31.7%, 15.9%, and 15.7%, respectively, in May.

On a YTD (year-to-date) basis, NIO stock has underperformed these Chinese companies. NIO stock has lost nearly 38.3% as of the closing on May 23. While Baidu has lost 28.5% in 2019, Tencent Holdings and Alibaba have risen 5.2% and 13.8%, respectively.

The ongoing US-China trade tensions have triggered a massive sell-off in the US-listed shares of the Chinese companies, which has pressured NIO stock.

Tesla’s underperforming

Tesla (TSLA) has lost 41.3% YTD. In January, Tesla started building its Shanghai-based Gigafactory in an effort to gain market share in the Chinese market. In the last few weeks, analysts have warned investors that the ongoing US-China trade tensions could be negative for Tesla’s plans to expand its business in China.


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