Nio shares traded about 2.5% higher in Monday’s pre-market session at $4.90, after closing flat at $4.78 on Friday, as Goldman Sachs lifted the stock to Buy and pointed to a turnaround it argued the market had failed to price.
Analyst Tina Hou raised her rating on Nio to Buy from Neutral while keeping a 12-month target of $7.00 for the American depositary shares and HK$55 for the Hong Kong line, implying an upside of 46% and 42% respectively.
The move completes a full round trip for the bank, which had carried Nio on its Sell list as recently as June 2025 before a series of upgrades tracked the company’s return toward profitability.
The Upgrade
Hou framed the call around a turnaround she credited to the Nio brand’s premium push, writing that the company should deliver “one of the fastest volume growth” among the names Goldman covers, alongside a premium margin profile and a profit and cash-flow turn.
The bank tied that view to the launch of the ES8 and ES9, arguing the pair had strengthened the company’s position in the premium new-energy segment and built a higher competitive moat that rivals would struggle to displace.
For the full year, Goldman modeled volume growth of 43% and revenue growth of 60%, alongside a swing to non-GAAP net profit of 1.6 billion yuan from a loss of 12.4 billion yuan in 2025.
Free cash flow, on the bank’s estimates, improves to 12.1 billion yuan this year from negative 3.1 billion yuan in 2025, a turn Hou presented as central to the rerating case.
The analyst noted that Nio had expanded volume by 67% year-over-year in the first half even as the domestic new-energy market contracted 14%, a divergence she called disconnected from a share price down 6% for the year and 32% from its April peak.
Hou also flagged valuation, writing that the stock traded at a 25% and 29% discount to pure-electric peers on 2026 and 2027 estimated price-to-sales and a 17% discount on 2027 estimated price-to-earnings, a gap she viewed as attractive given the product momentum.
Looking further out, the bank suggested Nio could apply the same premium playbook to its 5-series and 6-series models to revive their volumes in 2027 and beyond, supporting continued market-share gains.
The Goldman Trajectory
Hou’s stance has traced the stock’s recovery from deep pessimism.
The bank had added Nio to its Sell list in November 2024, a call that proved correct as the shares fell sharply against both the broader market and Chinese new-energy peers over the following months.
Hou upgraded the stock to Neutral from Sell on June 17, 2025, lifting her target to $3.80 from $3.70 and citing management’s cost-reduction efforts and a projected improvement in profit levels over the following three years.
The analyst then raised the target to $7.00 from $4.30 on October 30, 2025, while holding the Neutral rating, after lifting her 2026-to-2030 sales-volume estimates by 6% to 11% on stronger model competitiveness from the L90 and ES8 and an expanded pipeline including the Onvo L80, the ES9 and an ES7 facelift.
That October note pulled forward Goldman’s expected full-year non-GAAP operating break-even to 2028 from 2029, a marker Monday’s upgrade builds upon by putting a profit and cash-flow turn as soon as this year.
The Quarter Behind the Call
Nio delivered 83,465 vehicles in the first quarter of 2026, up 98.3% year-over-year, with the core Nio brand contributing 58,543, Onvo 13,339 and Firefly 11,583.
Total revenue reached 25.53 billion yuan, up 112.2% from a year earlier, with vehicle sales revenue of 22.8 billion yuan up 129.2%.
Gross margin climbed to 19.0% from 7.6% a year earlier and 17.5% in the prior quarter, while vehicle margin rose to 18.8% from 10.2%, a fourth consecutive quarterly improvement, with the ES8 contributing more than 20% vehicle margin.
The quarter extended the financial turn that produced the company’s first-ever quarterly profit on a GAAP basis in the fourth quarter of 2025, with Nio narrowing its GAAP net loss to 332.1 million yuan from 6.75 billion yuan a year earlier and posting a small adjusted net profit on a non-GAAP basis.
The company held 8.83 billion yuan in cash and equivalents at March 31, and 48.2 billion yuan across cash, restricted cash, short-term investments and long-term deposits.
The Guidance the Note Leans On
For the second quarter, Nio guided total revenue to between 32.78 billion yuan and 34.44 billion yuan, an increase of 72.4% to 81.2% from a year earlier, a range that underpins the revenue trajectory Goldman built its upgrade around.
Management tied the outlook to an intensive launch cycle led by the ES9 flagship executive SUV, whose pre-sales opened in April ahead of first deliveries on May 27, and the Onvo L80 large SUV.
The company guided vehicle margin to 17% to 18% for the second quarter and the full year and reiterated its target of non-GAAP operating profitability in 2026.
Group deliveries ultimately reached 107,658 in the quarter, narrowly short of the guided floor, as a softening ES8 offset record contributions from Onvo and Firefly.
The Product Story Under the Upgrade
The upgrade lands days after Nio began deliveries of a five-seat ES8, priced from 382,800 yuan ($56,300) with the battery included, a variant that undercuts the three-row model by 5.9% and targets a five-seat premium segment Li has called roughly three times larger.
The launch reinforces a pivot toward SUVs that Nio has pursued since sedan demand weakened through 2024 and 2025, with Li describing 2026 as a third growth cycle targeting 40% to 50% annual sales growth led by large SUVs.
The five-seat variant fills a gap left when the company quietly retired the ES7, whose sales had fallen 71.3% in 2024 to 1,874 units before it vanished from the configurator in early 2025.
The ES8’s demand halved in three months to 8,966 units in June, below 10,000 for the first time since its ramp and a third straight monthly decline from March’s 16,255.
The model accounted for 46.3% of group deliveries across the first five months and carries a gross margin near 20%, leaving the five-seat version to shore up a line central to Li’s profit pledge without heavy discounting, which brand chief Ma Lin has ruled out.
Qin Lihong has dismissed the risk that the five-seat ES8 and the Onvo L80 would cannibalize each other, citing a price gap of more than 100,000 yuan between the two.
Goldman’s upgrade follows a Buy initiation from CLSA and a run of raised targets from Bernstein, CMB International and Citi through late May, leaving Hou’s call an endorsement of a turnaround thesis that hinges on whether the premium SUV cycle can outrun a contracting home market and rising input costs.
