Why Nio Stock Is Up More Than 10% Today

Nio (NYSE:NIO) The company’s shares had one of their best days in recent weeks today, up 12% through 12:40 p.m. ET on Thursday.

After losing more than 50% of its value in the first half of 2024, Nio stock looked poised to rebound after its next earnings report on expectations of higher revenue and improved margins. The company did not disappoint, giving investors a chance to buy electric vehicle (EV) stocks today.

Nio’s deliveries and margins finally return to normal

Nio released its second-quarter earnings report Thursday morning. Here are some of the important numbers you need to know (all changes are year-over-year unless otherwise noted):

• Vehicle deliveries: up 144% to 57,373 units and up 91% sequentially.

• Revenue: up 99% to $2.4 billion.

• Vehicle margin: 12.2% compared to 6.2% in the same quarter last year and 9.2% in the first quarter.

• Gross margin: 9.7% compared to 1% in the same period last year and 4.9% in Q1

• Net loss: down 16.7% to $694 million.

The numbers speak for themselves.

One of the main reasons Nio shares have fallen in recent months has been a decline in deliveries and margins. However, much of the blame was on lower production as the Chinese EV maker upgraded its models to the next-generation platform. Once the upgrades were completed in April, I expected Nio’s deliveries, and therefore margins, to rebound.

Nio actually shipped a record number of electric vehicles in the second quarter and captured more than 40% of the Chinese market share for battery-powered electric vehicles, which were priced at more than 300,000 yuan during the quarter.

Is Nio stock worth buying now?

Nio expects to deliver a record number of electric vehicles in the third quarter. It also launched a mass-market brand called Onvo in the second quarter and has opened 105 Onvo stores as of Sept. 1. Nio expects to officially launch and begin deliveries of its inaugural Onvo model, the L60 SUV, this month.

While all of this sounds good and could propel Nio shares higher, let me warn you: Q2 was a standout quarter, so don’t expect Nio’s results to be as bombastic in the coming quarters. In other words, Nio’s shipments and margins rebounded in Q2 and should now stabilize after a long period of downtime, which should be enough to keep the stock afloat.

Is it worth investing $1000 in Nio right now?

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Neha Chamaria has no position in any stocks mentioned. Motley Fool has no position in any stocks mentioned. Motley Fool has a disclosure policy.