It hasn't been a great afternoon session for NIO investors, who have watched their shares sink by -3.8% to a price of $13.54. Some of you might be wondering if it's time to buy the dip. If you are considering this, make sure to check the company's fundamentals first to determine if the shares are fairly valued at today's prices.
NIO Has an Attractive P/B Ratio but a Worrisome P/E Ratio:
NIO Inc. designs, develops, manufactures, and sells smart electric vehicles in China. The company belongs to the Consumer Discretionary sector, which has an average price to earnings (P/E) ratio of 22.33 and an average price to book (P/B) ratio of 3.12. In contrast, NIO has a trailing 12 month P/E ratio of -8.2 and a P/B ratio of 1.14.
NIO has moved -32.0% over the last year compared to 8.0% for the S&P 500 — a difference of -40.0%. NIO has a 52 week high of $22.74 and a 52 week low of $7.0.
The Company Has a Positive Net Current Asset Value:
| 2019-04-02 | 2020-05-14 | 2021-04-06 | 2022-04-29 | |
|---|---|---|---|---|
| Revenue (MM) | $4,951 | $7,825 | $16,258 | $36,136 |
| Gross Margins | -5.2% | -15.3% | 11.5% | 18.9% |
| Operating Margins | -193.8% | -141.6% | -28.3% | -12.4% |
| Net Margins | -195.12% | -144.24% | -32.59% | -11.03% |
| Net Income (MM) | -$9,661 | -$11,287 | -$5,299 | -$3,986 |
| Net Interest Expense (MM) | $10 | -$210 | -$259 | $274 |
| Depreciation & Amort. (MM) | -$474 | -$999 | -$1,046 | -$1,708 |
| Earnings Per Share | -$70.23 | -$11.08 | -$4.74 | -$1.66 |
| EPS Growth | n/a | 84.22% | 57.22% | 64.98% |
| Diluted Shares (MM) | 332 | 1,030 | 1,183 | 1,779 |
| Free Cash Flow (MM) | -$5,268 | -$7,015 | $2,916 | $6,044 |
| Capital Expenditures (MM) | -$2,644 | -$1,707 | -$965 | -$4,078 |
| Net Current Assets (MM) | $1,477 | -$14,476 | $23,427 | $18,821 |
| Current Ratio | 1.42 | 0.52 | 3.31 | 2.18 |
| Long Term Debt (MM) | $1,168 | $7,155 | $5,938 | $9,739 |
| LT Debt to Equity | 0.14 | -1.48 | 0.19 | 0.26 |
NIO has growing revenues and increasing reinvestment in the business, an excellent current ratio, and a strong EPS growth trend. However, the firm suffers from consistently negative margins with a positive growth rate and an unconvincing cash flow history. Finally, we note that NIO has similar gross margins to its peers.
