Chinese electric vehicle (EV) maker Nio (NYSE: NIO) traded lower on Tuesday after missing analyst estimates for its Q1 2025 earnings.
As of press time, NIO stock was down over 3% at $3.38. Over the past week, the equity has dropped nearly 10%, raising concerns that it could fall toward the $2 mark if momentum falters.
In Q1, Nio reported revenue of $1.66 billion, a 21.5% increase from $1.37 billion in the same quarter last year.
This growth was driven by an 18.6% rise in vehicle sales and a 37.2% jump in other revenue streams. However, the results fell short of expectations, missing the consensus estimate of $1.73 billion by about 4%.
Profitability remains a challenge for the EV maker. In this case, Nio posted an adjusted loss per share of $0.41, which was wider than the expected $0.35 loss and represented a 24.2% year-over-year decline.
Looking ahead, the firm offered a more upbeat Q2 2025 outlook, projecting vehicle deliveries between 72,000 and 75,000 units, a 25.5% to 30.7% increase year-over-year.
What next for NIO stock?
Still, with sentiment weakening and results underwhelming, the stock remains under pressure. A further slide toward $2 is a growing risk unless Nio can execute its delivery targets and improve its path to profitability.
Interestingly, despite the missed earnings, some analysts remain bullish. According to TipRanks, a consensus of 10 Wall Street analysts forecasts an average price target of $5.07 for NIO over the next 12 months, nearly 50% upside from current levels. Price targets range from a low of $4 to a high of $8.
Notably, on June 3, Morgan Stanley reaffirmed its ‘Overweight’ rating on Nio and maintained a $5.90 price target. The firm cited optimism around Q2 volume recovery and improving cash flow as production ramps up. The firm pointed to restructuring efforts, a stronger sales mix, and improved liquidity as key catalysts.
Morgan Stanley also expects a 20% average selling price (ASP) decline through 2025, partially offset by rising sales of the lower-cost Firefly model.
However, its positive outlook hinges on Nio’s ability to meet its Q2 delivery goals and drive greater operational efficiency amid a challenging EV market.
Featured image via Shutterstock
