It’s been a good week for NIO Inc. (NYSE:NIO) shareholders, because the company has just released its latest annual results, and the shares gained 6.3% to US$5.77. The statutory results were not great – while revenues of CN¥56b were in line with expectations,NIO lost CN¥12.44 a share in the process. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for NIO
After the latest results, the 28 analysts covering NIO are now predicting revenues of CN¥73.1b in 2024. If met, this would reflect a sizeable 31% improvement in revenue compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to CN¥9.55. Yet prior to the latest earnings, the analysts had been forecasting revenues of CN¥79.0b and losses of CN¥6.09 per share in 2024. While this year’s revenue estimates dropped there was also a considerable increase to loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The average price target fell 9.5% to US$9.25, implicitly signalling that lower earnings per share are a leading indicator for NIO’s valuation. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on NIO, with the most bullish analyst valuing it at US$17.75 and the most bearish at US$4.80 per share. This is a very narrow spread of estimates, implying either that NIO is an easy company to value, or – more likely – the analysts are relying heavily on some key assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the NIO’s past performance and to peers in the same industry. It’s pretty clear that there is an expectation that NIO’s revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 31% growth on an annualised basis. This is compared to a historical growth rate of 42% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 13% per year. So it’s pretty clear that, while NIO’s revenue growth is expected to slow, it’s still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at NIO. They also downgraded NIO’s revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of NIO’s future valuation.
With that in mind, we wouldn’t be too quick to come to a conclusion on NIO. Long-term earnings power is much more important than next year’s profits. We have estimates – from multiple NIO analysts – going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we’ve spotted with NIO .
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.