Why Nio Stock Is Up Over 10% Today

Nope (NO 13.80%) the stock had one of its best days in weeks today, soaring 12% since 12:40 a.m. ET Thursday.

After losing more than 50% of its value in the first half of 2024, Nio stock looked poised to bounce back to its next earnings report on expectations of higher revenue and better margins. The company didn’t disappoint, offering investors a chance to snap up electric vehicle (EV) stock today.

Nio’s deliveries and margins are finally recovering

Nio released its second quarter earnings report on Thursday morning. Here are some important numbers to know (all changes are year-over-year unless otherwise noted):

• Vehicle deliveries: Up 144% to 57,373 units and up 91% sequentially.
• Revenue: Up 99% to $2.4 billion.
• Vehicle margin: 12.2% versus 6.2% in the year-ago quarter and 9.2% in the first quarter.
• Gross margin: 9.7% vs. 1% in the year-ago period and 4.9% in Q1.
• Net loss: down 16.7% to $694 million.

The numbers speak for themselves.

One of the biggest reasons why Nio stock has fallen in recent months has been its declining shipments and margins. However, lower production was largely to blame as the Chinese EV maker updated its models to the next-generation platform. With the upgrades completed in April, I expected Nio’s shipments and therefore margins to rebound.

Nio actually delivered a record number of electric vehicles in the second quarter and captured more than 40% of China’s battery electric vehicle market at prices above 300,000 yuan during the quarter.

Should You Buy Nio Shares Now?

Nio expects to deliver a record number of electric vehicles in the third quarter. It also launched a mainstream brand called Onvo during the second quarter and has already opened 105 Onvo stores as of September 1. Nio expects to officially launch and begin deliveries of Onvo’s inaugural L60 SUV this month.

While this all sounds good and could propel Nio stock higher, let me warn you: Q2 was an exceptional quarter, so don’t expect Nio’s numbers to be as bombastic in the coming quarters. In other words, Nio shipments and margins recovered in Q2 and should now stabilize after a long hiatus, which should be enough for the stock to maintain its momentum.