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Sun. Jul 14th, 2024

Should You Buy NIO Stock Before Profiting Next Week?

By Vaseline May30,2024

NIO Stock – Should You Buy NIO Stock Before Earnings Next Week?

Source: Piotr Swat / Shutterstock.com

Chinese electric vehicle (EV) manufacturer. Nio (NYSE:NIO) will report earnings next week. Despite some high volatility, the company has performed well over the past month, although NIO stock has fallen significantly over the past two quarters.

The threat of tariffs imposed by the US government has cast some dark shadows on NIO stock lately. But with shares rising on pre-earnings momentum, investors are likely thinking about an important question: Is this former EV winner on the verge of a comeback, or is the current surge a temporary phenomenon?

When Nio reports first-quarter results on June 6, it will do a lot to determine its growth prospects. But while we wait to hear whether Nio can beat Wall Street estimates, there are other factors to consider.

What happens to NIO Stock?

Even after rising 14% in the past month, NIO stock hasn’t received much favorable coverage from Wall Street. Bank of America recently lowered its price target on the stock, maintaining a “neutral” rating and skeptical outlook. Of the eighteen analysts surveyed on TipRanks, eight rate NIO a Buy, while nine give the stock a Hold rating.

There are some potential headwinds for Nio on the horizon. The company could certainly benefit from China’s new investments in domestic solid-state battery production. But that doesn’t mean investors should be too optimistic about the upcoming earnings report. The EV market is still volatile and China is full of other automakers, some of which will be able to scale production at much higher levels than Nio.

If Investors place contributor Josh Enomoto reports:

“To be fair, the global EV sector is currently facing challenges, casting a dark cloud on NIO stock and others. It is not the case that the sector is experiencing outright deflation. On the contrary, the market is slowing down from its previous tremendous growth rate. The economy is also important. With internal combustion vehicles offering a more affordable option for middle-income consumers, this dynamic narrows the addressable market for electric vehicles.”

Overall, it will likely be difficult for investors to have much confidence in NIO stock as the company prepares for its earnings report. The combination of a tough market and an equally complicated geopolitical landscape has resulted in a troubling outlook for this automaker. Even as Nio expands its reach into EV charging, it still faces an uphill battle against stronger, trendy competitors.

On the date of publication, Samuel O’Brient had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publishing Guidelines.

Samuel O’Brient is a reporter for InvestorPlace, where his work focuses primarily on financial markets, global economic trends and public policy. O’Brient writes a weekly column about recent political news that investors should follow.

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