A recent “NIO Day” presentation gave investors a look at where the company plans to go. Shares of NIO Limited (NYSE:NIO) reached at $59.99 price level during last trade its distance from 20 days simple moving average was 9.98%, and its distance from 50 days simple moving average was 20.29% while it has a distance of 164.48% from the 200 days simple moving average.
Electric-vehicle (EV) stocks were some of the biggest winners of 2020. And even if people are starting to question the valuations these companies have achieved from investor exuberance, they keep marching higher.
Tesla (NASDAQ:TSLA) has garnered much of the publicity, so it might surprise you that shares of Chinese EV maker NIO (NYSE:NIO) have significantly outperformed those of Tesla over the past year. That makes it worthwhile to investigate whether NIO is still a buy for 2021.
Tesla’s meteoric rise was the subject of many headlines over the last year, and led speculative investors to search for “the next Tesla.” One obvious place to look was the largest automotive market in the world. As recently as early 2020, NIO’s business flirted with bankruptcy. But a push by the Chinese government to accelerate growth in the country’s EV industry contributed to strong sales growth, and investors piled in.
As the stock soared, the company also took advantage to raise needed capital. This diluted existing shareholders, as can be seen from the faster growth of enterprise value compared to the stock price.
Solid pace of growth
While not growing as quickly as the share price itself, NIO’s business is growing at a very strong pace. Vehicle deliveries increased by 113% in 2020 compared to the prior year. 2020 represented almost 60% of the company’s overall cumulative vehicle deliveries.
But at just under 44,000 vehicles, that is still less than 1/10th of Tesla’s 2020 volume. NIO is expanding its product offerings with a new luxury sedan announced at the recent “NIO Day” presentation. The ET7, which will be NIO’s first sedan, comes with a new, larger 150 kWh battery pack. It will have a maximum range of about 621 miles, according to the company. That’s further than Tesla’s Model S maximum range of 402 miles, as well as the Lucid Motors Air sedan range of 517 miles.
EV sales in China surpassed 1 million in 2020, and the government aims to expand that to 5 million by 2025. That number could reach 10 million by 2030, and approach 20 million by 2040, according to research organization BloombergNEF.
The stock has a market cap of $88.86B with 1.21B shares outstanding, of which the float was 1.00B shares. Analysts consider this stock active, since it switched Trading volume reached 111,986,448 shares as compared to its average volume of 182.14M shares.
The Average Daily Trading Volume (ADTV) demonstrates trading activity related to the liquidity of the security. When Ave Volume tends to increase, it shows enhanced liquidity.
But when Ave Volume is lower, the security will tend to be cheap as people are not as keen to purchase it. Hence, it might have an effect on the worth of the security. NIO’s relative volume was 0.61.
Relative volume is a great indicator to keep a close eye on, but like most indicators it works best in conjunction with other indicators and on different time frames. Higher relative volume you will have more liquidity in the stock which will tighten spreads and allow you to trade with more size without a ton of slippage.
NIO Limited has an average true range (ATR) of 3.84. Other technical indicators are worth considering in assessing the prospects for EQT. NIO’s price to sales ratio for trailing twelve months was 46.05 and price to book ratio for most recent quarter was 58.24, whereas price to cash per share for the most recent quarter was 26.04.
The Company’s price to free cash flow for trailing twelve months was 0. Its quick ratio for most recent quarter was 2.30. Analysts mean recommendation for the stock was 2.40. This number is based on a 1 to 5 scale where 1 indicates a Strong Buy recommendation while 5 represents a Strong Sell.
NIO Limited‘s shares owned by insiders remained 0.56%, whereas shares owned by institutional owners are 36.40%.
Meanwhile, NIO traded under umbrella of Consumer Cyclical sector, the stock was traded -10.45% ahead of its 52-week high and 2743.13% beyond its 52-week low. So, both the price and 52-week high indicators would give you a clear-cut picture to evaluate the price direction.