Child (NYSE: NIO) Shares had one of their best days in recent weeks today, up 12% as of 12:40 p.m. ET on Thursday.
After losing more than 50% of its value in the first half of 2024, Nio stock looked set to rebound in its next earnings report in anticipation of higher revenue and improved margins. The company did not disappoint, giving investors a chance to snap up electric vehicle (EV) stocks today.
Nio’s deliveries and margins are finally recovering
Nio released its second-quarter earnings report on Thursday morning. Here are some important numbers you should know (all changes are year-over-year unless otherwise noted):
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Vehicle deliveries: increased by 144% to 57,373 units and 91% in sequential terms.
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Revenue: Up 99% to $2.4 billion.
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Vehicle margin: 12.2% compared to 6.2% in the same quarter of the previous year and 9.2% in the first quarter.
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Gross margin: 9.7% compared to 1% in the same period last year and 4.9% in the first quarter.
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Net loss: down 16.7% to $694 million.
The numbers speak for themselves.
One of the main reasons Nio’s stock fell in recent months was a drop in its deliveries and margins. However, lower production was largely to blame as the China-based EV maker was upgrading its models to its next-generation platform. With the upgrades completed in April, I expected Nio’s deliveries — and therefore margins — to recover.
In fact, Nio delivered a record number of EVs in the second quarter and captured more than 40% of China’s battery-powered EV market priced above 300,000 yuan during the quarter.
Should You Buy Nio Stock Now?
Nio expects to deliver a record number of electric vehicles in the third quarter. It also launched a mass-market brand called Onvo during the second quarter and had already opened 105 Onvo stores as of September 1. Nio expects to officially launch and begin deliveries of Onvo’s inaugural model, the L60 SUV, this month.
While all of this sounds good and could push Nio stock higher, let me warn you: Q2 was a banner quarter, so don’t expect Nio’s numbers to be as bombastic in the coming quarters. In other words, Nio’s deliveries and margins recovered in Q2 and should now stabilize after a long lull, which alone should be enough for the stock to maintain its momentum.
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Why Nio Stock Rose More Than 10% Today was originally published by The Motley Fool