- Summary:
- Nio stock price has been sending mixed signals in this quarter of the year, but a look at its key fundamentals signals its a good buy.
Nio stock price traded upwards in the pre-market session on Thursday, as investors absorbed news of additional battery swap stations and the opening of the first showroom in the Middle East. Nio (NYSE: NIO) traded at $4.64, up by 0.8% in the pre-bell session. The company continues to struggle with slow sales growth, but it is currently at an inflection point following a raft of strategic expansionist moves.
Why Nio stock is a good buy
Nio’s November sales rose by 28.9% YoY to 20,575, but declined by 1.9 % from the October figure. The newly-launched Onvo L60 SUV model is still picking traction, and its sales growth from October’s 4,319 to November’s 5,082 signals a strong upside. Nio has sold more than 190,000 units so far this year, and is on course to cross the milestone 200k mark for the first time in its history.
An often overlooked aspect in the company’s growth curve is its battery swapping business. The company added 120 stations in China last month, which affirms the success in that front. The aggressive buildup of swap stations if reflected in its CAPEX. However, this could prove to be the ultimate edge against competitors in the long term.
Battery swapping is proving to be a hit in the market, as it saves customers lots of time that would otherwise have been spent waiting for their vehicles to charge. Nio currently has 2,702 swap stations in China and less than 100 in Europe.
This presents a significant headroom for market expansion, which is good news for Nio stock price in the long term. The company recently completed the expansion of its Wuhan battery station manufacturing plant, which is expected to reach 1,500 station capacity in 2025.
Meanwhile, Nio opened the first Nio House in Abu Dhabi in late November, targeting the Middle East and North Africa (MENA) market. The 970 square metre facility is the first step in Nio’s expansion outside China and Europe, and it will follow it up with the first battery swap facility by the year’s end.
Nio Stock Price Prediction
Nio stock price pivots at $4.60. Action above this level will favour the upside. Otherwise the sellers will be in control.
Resistance: Immediate resistance is likely to be at $4.67. However, extended control by the buyers will break above that level and potentially test $4.75.
Support: NIO is likely ti find the first support at $4.53. Breaking below that level will invalidate the upside narrative, and the resulting momentum could send the price lower to test $4.44.
