Is Trends Stock Nio Inc. (NIO) a purchase now?

NIO Inc. (Nio) was recently on the list of the most sought -after stocks from Zacks.com. Therefore, you may want to take some of the key factors into account that could influence the performance of the share in the near future.

Last month, the shares of this company returned +13.4% compared to the change in the Zack S&P 500 Composite +9.8%. During this time, the Zacks Automotive – Foreign Industry, which falls into the NIO, has 7.2%. The key question now is: What could be the future direction of the stock?

While media publications or rumors about a significant change in the business prospects of a company usually carry out its shares as a “trend” and lead to an immediate change in price, there are always some basic facts that ultimately dominate the purchase and hate decision finding.

Instead of concentrating on anything else, we prioritize the evaluation of the change in the profit projection of a company at Zacks. This is due to the fact that we believe that the current value for its shares is determined by the cash value of his future profit current.

We essentially take a look at how analysts that cover the shares reveal their profit estimates in order to reflect the effects of the latest business trends. And if the profit estimates for a company rise, the current value for its shares increases. A higher atmosphere to be used than the current market price gives investors the interest for buying the share, which leads at a higher price. For this reason, empirical research shows a strong correlation between trends in the revisions of the yield estimate and short -term share price movements.

NIO is expected to achieve a loss of $ 0.22 per share in the current quarter, which corresponds to a change of +38.9%compared to the previous year. In the last 30 days, the Zacks consensus estimate remained unchanged.

For the current financial year, the consensus estimate of -1.13 USD refers to a change of +25.2% compared to the previous year. This estimate has remained unchanged in the past 30 days.

For the next financial year, the consensus assessment of -0.48 USD shows a change of +58.1% compared to what Nio is expected a year ago. The estimate remained unchanged last month.

Our proprietary stock assessment tool, The Zacks Rank, offers a strong externally tested track record and offers a more conclusive picture of the price direction of a share at short notice, as it effectively uses the power of profits. Due to the size of the recent change in the consensus estimate and three other factors in connection with earnings estimates, Nio Zack's rank number 3 (hold) is assessed.

The following table shows the development of the company's 12-month consensus EPS EPS estimate:

12-month consensus EPS estimate for NIO _12MonthepScharturl

Although the profit growth of a company is probably the best indicator of its financial health, not much happens if it cannot increase its income. It is almost impossible for a company to increase its income without increasing its sales over long periods of time. It is therefore crucial to know the potential sales growth of a company.

For NIO, the consensus estimate for the current quarter of USD shows a change of +24.5%compared to the previous year. For the current and next financial years, estimates of 13.74 billion US dollars and $ 17.98 billion $ 50.4% or +30.9%.

NIO reported sales of $ 2.7 billion in the last quarter, which corresponds to a change of +12.1%compared to the previous year. EPS of -0.47 USD for the same period comparable to -0.45 USD a year ago.

Compared to the Zacks Consensus estimate of 2.85 billion US dollars, the registered income is a surprise of -5.29%. The EPS surprise was -42.42%.

In the last four quarters, the company has only exceeded the EPS estimates once. During this period, the company only led consensus sales estimates.

No investment decision can be efficient without taking into account the evaluation of a share. Whether the current price of a share rightly reflects the internal value of the underlying business and the growth prospects of the company is an essential determinant for future price -performance.

The comparison of the current value of the valuation multipliers of a company, such as

The Zacks Value Style Score (part of the Zacks Style Scores Systems), which pays attention to the grade of stocks from A to F both traditional and unconventional valuation metrics (AA is better than a C; and so on) is rather helpful to identify whether a share is overrated, legally valued or temporarily accommodated.

NIO is evaluated on this Front D, which points out that it deals with his colleagues with a bonus. Click here to display the values of some evaluation metrics that have driven this grade.

The facts discussed here and a lot of other information about Zacks.com could help determine whether it is worth paying attention to the NIO market or not. However, the Zacks ranked 3rd indicate that it is in line with the broader market at short notice.

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NIO Inc. (NIO): Report on free stock analysis

This article was originally published in Zack's Investment Research (Zacks.com).

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