Nio stock (NYSE: NIO) has been exhibiting plenty of volatility as of late.
On March 11, government support for the company’s battery-swapping technology caused a surge of almost 10%, from $4.40 to $4.91. The tide of optimism continued. Nio stock closed at a price of $5.18 on March 19, two days before the release of the company’s Q4 earnings call.
Despite these high hopes, the quarterly report turned out to be a disappointment. The electric vehicle (EV) company posted a $0.43 loss per share, above consensus estimates of $0.42. Revenues, at $2.70 billion, also underperformed analyst estimates, which were pegged at $2.85 billion.
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To make matters worse, Q1 2025 guidance also failed to meet estimates.
As a result by press time on March 21, NIO shares were changing hands at a price of $4.43. This latest 14.47% move to the downside has almost completely erased the stock’s year-to-date (YTD) returns, which currently stand at 1.49%.
Despite the crash, one Wall Street analyst has maintained an optimistic outlook. Let’s take a closer look at his rationale.
Banking giant still bullish on Nio stock forecast
In the aftermath of the earnings call, Morgan Stanley equity analyst Tim Hsiao reiterated an earlier ‘overweight’ rating on Nio stock. In addition, the researcher doubled down on his previous price target — $5.90.
If Hsiao’s outlook comes to fruition, it would equate to a 33.18% rally from current prices. So, what is it that sparked such a strong vote of confidence?
While the analyst did note that the company’s net loss came in higher than what Morgan Stanley had anticipated, he also indicated that revenues actually came in line with the low end of the banking giant’s estimates.
In addition, Hsiao pointed out that the company marked a roughly $73 million non-operating loss in Q4, which largely reflects losses from the revaluation of its overseas assets. To boot, the analyst opined that operating expenses were “largely steady” once Onvo’s channel expansion is taken into account.
How does this compare to Wall Street’s average outlook? Well, it’s a bit more bullish — but on average, analysts set a $5.21 price target for Nio stock ahead of the earnings call. While it is likely that we will see a slew of revisions in the coming days and weeks, the earnings call was not shocking to a degree that would reasonably cause major downward revisions in terms of price forecasts.
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