BofA Securities raised its price target on Nio on Tuesday after the Chinese EV maker reported its first-ever profitable quarter, while maintaining a Neutral rating on the stock.
The revision came hours after Nio reported fourth-quarter 2025 results that showed the company turning a profit for the first time as a public company, driven by an increase in vehicle margins and a steep reduction in operating expenses and R&D investments.
BofA’s analyst Ming Hsun Lee raised the price target on the Shanghai-headquartered company to $6.70 from $6.30.
As of publication time, Nio‘s US-listed shares were trading 12% higher at $5.54.
The new price target implies an upside potential of 35.6% based on Monday’s closing price and 21.0% from the current trading levels.
BofA’s Take
Lee described revenue as “largely in line” with BofA’s expectations.
Nio reported total revenue of 34.7 billion yuan in the fourth quarter, up 76% year on year and 59% quarter on quarter.
The analyst attributed the growth to a 72% year-on-year increase in vehicle delivery volumes and a 5% rise in average selling price (ASP) year on year and 15% quarter on quarter.
Despite the significantly cheaper sub-brands Onvo and Firefly, the higher ASP reflected a product mix increasingly weighted toward the high-margin Gen-3 ES8 SUV.
Gross margin came in at 17.5%, up 5.8 percentage points year on year and 3.7 percentage points quarter on quarter, but short of BofA’s estimate of 18.5%.
The miss was driven by vehicle margin of 18.1%, below the firm’s forecast of 19.5%.
The company’s chief financial officer said on the earnings call that vehicle margin is expected to be maintained at a similar level to the fourth quarter.
The operating expense picture was the clearest positive signal in the results.
The ratio of operating expenses to revenue fell to 15.2%, down 27.1 percentage points year on year and 14.8 percentage points quarter on quarter — a compression that reflected sharp declines in both R&D spending and selling, general and administrative costs as Nio‘s revenue base expanded.
Operating income reached 807 million yuan, above the preliminary guidance range of 200 million to 700 million yuan that Nio had issued on the profit alert issued on February 5.
The Profit Miss
Non-GAAP net profit came in at 728 million yuan in the fourth quarter, compared with a non-GAAP net loss of 6.5 billion yuan in the same period a year earlier.
The figure missed BofA’s estimate of 1.0 billion yuan.
Lee attributed the shortfall in part to 529 million yuan in equity investment losses during the quarter, a below-the-line item that dragged on the bottom line despite strong operating performance.
Nio‘s GAAP net profit for the quarter was 282.7 million yuan ($40.4 million), its first positive figure on that measure in a single quarter.
Context
The price target increase of $0.40 — a 6.3% revision — reflects BofA’s view that the earnings improvement is real but that the stock’s risk-reward remains balanced at current levels.
For the first quarter of 2026, Nio guided for deliveries of 80,000 to 83,000 vehicles — up 90% to 97% year on year — and revenue of 24.5 billion to 25.2 billion yuan, implying year-on-year growth of between 103% and 109%.
The guidance implies between roughly 32,000 and 35,000 EVs delivered globally in March.
WS Consensus Beat
Nio‘s fourth-quarter adjusted earnings per share came in at 0.29 yuan, swinging from a loss of 0.09 yuan per share that analysts had expected — a beat of 0.38 yuan.
Revenue of 34.65 billion yuan for the quarter topped the consensus estimate of 33.25 billion yuan by nearly 1.4 billion yuan.
For the first quarter of 2026, the EV maker guided for revenue of 24.48 billion to 25.18 billion yuan, above the analyst consensus of 23.3 billion yuan.
