NIO - are the fundamentals good enough?

29 août 2023

Analysts have adjusted earnings estimates and thus, an earnings beat does not always translate to good prospects for some of the businesses:

Earnings Estimate Management

From the earnings forecast by Investing above, we can note the following:

1. The coming EPS forecast (for the period ending 06/2023) is worse than the previous period ending 03/2023.
   
2. In fact, the EPS forecast is expected to be the worst at record -2.96 since 06/2022.
   
3. For the revenue forecast, it is expected to be lower than the previous quarter. It stands at 9.16B compared to the forecast of 11.93B from the previous quarter ending 03/2023.
   
4. This is in fact the lowest revenue forecast since 06/2022.
   
5. In the event that NIO beats both EPS & revenue forecast in the coming earnings, is the company doing better? In my opinion, it is a “NO”.
   
6. Beating such an estimate is not something to brag about as the company remains unprofitable with “falling” sales. It can be too early to call this a falling trend but the quarterly signs are there.
   
8. Conclusion
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Before we embrace any content from news agencies or investing portals, let us do our due diligence.

One quarter does not define a trend and thus, looking at the business as a whole from afar can help to put some objectivity and remove the impact of seasonality. This will help to put things in a better context as we even out peaks from new launches and service offerings.