Could Buying Nio Stock Today Set You Up for Life?
Key Points
Nio’s Q4 earnings easily beat analysts’ expectations.
Yet its stock looks undervalued and still trades below its IPO price.
- 10 stocks we like better than Nio ›
Nio (NYSE: NIO), a major electric vehicle (EV) producer in China, reported its fourth-quarter earnings on March 10. Its revenue surged 79% year over year to 34.7 billion yuan ($5.0 billion). It generated a net profit of 282.7 million yuan ($40.4 million), compared with a net loss of 7.11 billion yuan a year earlier. That also marked its first-ever quarterly profit.
For the full year, Nio's revenue rose 33% to 87.49 billion yuan ($12.5 billion), its annual deliveries rose 47% to 326,028 units, its vehicle margin expanded 230 basis points to 14.6%, and it narrowed its net loss from 22.4 billion yuan to 14.9 billion yuan ($2.2 billion).
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Image source: Nio.
Those numbers were impressive, yet Nio's stock still trades below its 2018 IPO price of $6.28 per ADR. It also trades at less than one times this year's sales. So could buying Nio today -- while the bulls look the other way -- set you up for life?
How fast is Nio growing?
Nio's eponymous brand sells higher-end electric sedans and SUVs. Its smaller Onvo and Firefly sub-brands, which were launched in 2024, sell cheaper SUVs and compact cars, respectively. It differentiates itself from its competitors with swappable batteries, which can be quickly swapped out at its own battery-swapping stations as a faster alternative to conventional chargers. It generates most of its revenue in China, but it's gradually expanding across Europe.
Nio's deliveries more than doubled in 2020 and 2021, but only rose 34% in 2022 and 31% in 2023. Its vehicle margin also dropped from a record high of 20.1% in 2021 to 9.5% in 2023. It mainly attributed the slowdown to tough macro and competitive headwinds.
However, its deliveries rose 39% in 2024 and 47% in 2025. That acceleration was mainly driven by the growing popularity of its namesake sedans and Onvo SUVs in China. Over the past year, its deliveries accelerated year over year, and its vehicle margins expanded.
|
Metric |
Q4 2024 |
Q1 2025 |
Q2 2025 |
Q3 2025 |
Q4 2025 |
|---|---|---|---|---|---|
|
Deliveries |
72,689 |
42,094 |
72,056 |
87,071 |
124,807 |
|
Growth (YOY) |
45.2% |
40.1% |
25.6% |
40.8% |
71.7% |
|
Vehicle Margin |
13.1% |
10.2% |
10.3% |
14.7% |
18.1% |
Data source: Nio. YOY = Year-over-year.
Could Nio be a potential multibagger?
From 2025 to 2027, analysts expect Nio's revenue to grow at a 29% CAGR, with adjusted net profits in 2026 and 2027. However, near-term concerns about the trade war, tariffs, geopolitical conflicts, and other macro headwinds are likely compressing its valuation. If those headwinds dissipate, it could be revalued as a growth stock again -- and generate life-changing gains for long-term investors willing to ride out near-term volatility.
Should you buy stock in Nio right now?
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Leo Sun 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.
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