Written by Cláudio Afonso | LinkedIn | X
Mizuho analyst Vijay Rakesh lowered his price target on Chinese electric-vehicle maker Nio by 16% to $4.20 from $5.00, while maintaining a Neutral rating, citing weaker-than-expected guidance and continued competitive pressures.
The new target implies a 6.7% downside from Friday’s closing price of $4.50. Nio shares were trading 1% lower in pre-market hours Monday at $4.45.
The cut follows Nio’s fourth-quarter earnings miss on Friday. The company posted a net loss of 7.112 billion yuan ($988 million), up 32.5% from a year earlier. SG&A expenses rose to 4.878 billion yuan, up 22.8% year-on-year. The quarterly loss of 3.17 yuan per share also missed analyst estimates of 2.12 yuan.
Rakesh pointed to three main concerns: soft March-quarter guidance for the company’s Onvo sub-brand, a challenging 2025 ramp-up amid high competition, and vehicle margins under pressure.
“1) MarQ deliveries guide weak with typical seasonality and weaker-than-expected Onvo deliveries, 2) 2025E delivery guide up 2x y/y potentially challenging with ET9 launch, Series 5/6 refreshes, 2 new Onvo models and Firefly starting in April but competition remains high, and 3) GM [Gross Margin] expected to continue to improve, despite some potential MarQ weakness, as Nio is targeting 15% vehicle margins in 2025 and 25% longer term,” he wrote.
Mizuho now values Nio at 0.7x projected 2025 sales, in line with the Chinese peer average of 0.8x, the analyst said.
Revenue came in at 19.7 billion yuan, below consensus of 20 billion yuan. For the first quarter, Nio guided revenue of around 12.6 billion yuan and vehicle deliveries between 41,000 and 43,000 units, far below expectations of 65,000 deliveries and 22.5 billion yuan in revenue.
At the earnings call, CFO Stanley Qu admitted pressure around the Onvo brand and vehicle margin management.
“We are also under pressure and a challenging situation managing the Onvo product and its vehicle margin,” the CFO stated after saying Onvo sales “didn’t meet our expectations.”
“Overall speaking, the company’s vehicle margin in Q1 will not be as good as you would have expected based on our margin performance in Q4 last year. But still, our full-year target is to achieve breakeven in Q4,” Qu said.
Qu added that the company is targeting a 20% vehicle margin for the Nio brand and 15% for Onvo. No margin guidance was provided for the upcoming Firefly brand.
“In that case, we have also mapped out a road map of our product margin. For the Nio brand, we would like to achieve a margin — a vehicle margin of 20%. And for the Onvo brand, it will be 15%.”
Separately, Bank of America Securities analyst Ming Hsun Lee cut his price target slightly to $4.90 from $5.00, while Morgan Stanley analyst Tim Hsiao reiterated an Overweight rating with a $5.90 price target, implying a 31% upside from current levels.
In a statement, Nio said its financial resources are expected to support operations over the next 12 months.
Nio delivered 13,863 vehicles in January and 13,192 in February, totaling 27,055 through February 28. Based on its full-quarter forecast, the company expects March deliveries of between 13,945 and 15,945 units—well below previously stated internal targets of 20,000 units for Onvo alone.
Starting in April, Nio plans to roll out refreshed and new models across its Nio, Onvo, and Firefly brands.
Last week, Nio extended its partnership with battery maker CATL to expand into battery swapping. CATL will invest up to RMB 2.5 billion ($346 million) in Nio Power, the EV maker’s charging and swap infrastructure unit.
