NIO Inc. (NIO) shares are getting some love on Monday as investors position themselves ahead of the Chinese electric vehicle maker's third-quarter earnings report. And there's plenty to watch when those numbers drop Tuesday morning.
What's on Deck
Nio is scheduled to report Q3 results before the opening bell on Tuesday. The Street is looking for a loss of 24 cents per share with revenue coming in around $3.26 billion. That revenue target would represent a solid jump from the prior quarter, when Nio reported $2.65 billion—a miss against the $2.76 billion analysts were expecting.
The good news? We already know the delivery numbers look pretty healthy. Nio said last month it delivered 87,071 vehicles in the third quarter, which marked a 40.8% increase from the same period last year. Cumulative deliveries reached 872,785 vehicles as of September 30. Even better, October brought a new monthly record with 40,397 vehicles delivered, driven in part by strong momentum for the ONVO L90 SUV.
New Products and Progress
Back in September, Nio launched its ES8 flagship premium SUV, and deliveries started rolling out shortly after. Investors will be listening carefully for any color on how that launch is going and whether the premium product is resonating with buyers.
Perhaps more interesting is the company's commentary about its financials. CFO Stanley Yu Qu said after last quarter's results that "comprehensive cost reduction and efficiency improvement initiatives have started to yield results." He added that the company is "approaching a structural inflection point in our financials, with positive momentum building toward a sustainable virtuous cycle and continued performance improvements." That's corporate-speak for "we're getting our act together financially," which is exactly what investors want to hear from a company that's been burning cash.
For the third quarter, management had guided for revenue between $3.05 billion and $3.19 billion, so if analysts are right at $3.26 billion, that would be a beat on the high end.
Technical Picture
From a technical standpoint, Nio is trading well within its 52-week range of $3.02 to $8.02—a nice recovery from those lows earlier in the year. The stock is currently sitting about 16% below its 50-day moving average of $6.95, suggesting some consolidation after recent gains. The 200-day moving average at $4.99 points to a more bullish longer-term trend.
Traders are watching resistance at $6.32 as a key level. Break through that, and you could see a run toward that $8.02 high. On the downside, the 50-day moving average might act as support—lose that level and selling pressure could accelerate.
Management will host an earnings call at 7 a.m. ET Tuesday to walk through the numbers and field questions from analysts.
Price Action: Nio shares were up 4.84% Monday morning, trading at $5.85 at the time of publication.