Shares of Nio Inc. (NIO) are moving higher in Friday's premarket trading. It's the kind of move that happens when a company does something it's never done before—like turning a quarterly profit—and Wall Street decides it's time to pay attention.
Analysts Are Suddenly Seeing the Light
Let's talk about the cheerleading squad that showed up after the earnings report. Nomura upgraded the stock to Buy from Neutral, basically saying the company's operational momentum is looking a lot better. Analysts at Macquarie raised their price forecast to $6.50, pointing to improved vehicle margins and better operating cash flow. Morgan Stanley is sticking with its Overweight rating and a $7.00 price target, a vote of confidence in Nio's forecast for 40% to 50% delivery growth. And HSBC joined the party, upgrading to Buy and setting a $6.80 price target.
When you get that many upgrades in a short span, it's not just noise. It's a signal that the story is changing for the better.
The Numbers That Made Everyone Look
So, what did Nio actually report? For the fourth quarter, revenue hit $4.95 billion. That's a 75.9% jump compared to the same period last year. More importantly, on an adjusted basis, earnings came in at 0.29 yuan (4 cents) per American Depositary Share (ADS). That might not sound like a lot, but it's a big deal because analysts were expecting a loss of 5 cents per share. Beating expectations is one thing; swinging to a profit when everyone thought you'd lose money is another.
This marked Nio's first quarterly profit ever. The company delivered 124,807 vehicles in the quarter, which is a 71.7% surge year-over-year. It's the kind of growth that makes a first profit possible.
