Nio Stock: Temporary Headwinds Present Opportunity

For year-to-date 2021, Nio (NIO) stock has been an underperformer. During this period, the stock has declined by 34.3%. There are A few fundamental factors that have depressed the stock. Read More... The post Nio Stock: Temporary Headwinds Present Opportunity appeared first on TipRanks Financial Blog.

Nio Stock: Temporary Headwinds Present Opportunity

For year-to-date 2021, Nio (NIO) stock has been an underperformer. During this period, the stock has declined by 34.3%.

There are A few fundamental factors that have depressed the stock. First and foremost, Chinese stocks have declined on regulatory headwinds. Further, chip shortages have resulted in Chinese vehicle sales have declining for the fourth straight month. (See Nio stock charts on TipRanks)

A potential delay in the company’s Hong Kong stock listing is yet another reason for weakness in Nio stock. However, these headwinds are temporary in nature, and provide a good opportunity.

I am bullish on Nio stock, as multi-year industry tailwinds could support robust growth.

Bullish Long-Term Outlook

The EV industry is at a growth inflection point, and China seems to be leading the way. BYD founder Wang Chuanfu believes that new energy vehicles will account for 70% of China’s new car sales by 2030.

China has also imposed a mandate on automakers that requires EVs to make up 40% of all sales by 2030.

On a global scale, Deloitte expects the EV market to grow at a CAGR of 29% over the next decade.

Strong Balance Sheet for Growth

As of June 30, 2021, Nio reported cash and equivalents of $7.5 billion. A robust liquidity position will allow the company to pursue aggressive growth.

In terms of a stock catalyst, Nio has expansion plans beyond China. The company is likely to enter Europe later this year. At the same time, Nio has plans to expand its presence in most important global markets by 2023-24. International expansion is likely to ensure that the company’s vehicle delivery growth remains strong.

Another positive catalyst for Nio is the launch of new vehicles. The company has plans to reveal new products based on the NIO Technology Platform 2.0 in 2022. This includes a premium smart electric sedan.

Nio has ample financial headroom to invest in innovation, and new product development. Additionally, the planned listing in Hong Kong will further boost the cash buffer.

Gradual Improvement in Margins

Nio has continued to report strong vehicle deliveries, even with chip shortages. For Q2 2021, the company reported delivery of 21,896 vehicles. On a year-over-year basis, deliveries were higher by 112%.

With growth in deliveries, Nio has also seen a gradual improvement in vehicle level margins. Vehicle margins for the last quarter were 20.3%, and expanded by 1,060 basis points on a year-over-year basis.

Wall Street’s Take

According to TipRanks’ analyst rating consensus, NIO stock comes in as a Strong Buy, with six Buys assigned in the past three months.

The average NIO price target is $67.52 per share, implying 92.2% upside potential from current levels.

Bottom Line

For Q2 2021, Nio reported research and development expenses of $136.9 million. On a year-over-year basis, expenses were higher by 62.1%.

Nio has been focused on new product development and innovative technologies. These investments are likely to ensure that Nio remains ahead of the curve in a highly competitive market.

It also seems that the chip shortages have discounted the stock price. Once temporary headwinds wane, Nio stock is due for a rally.

Disclosure: At the time of publication, Faisal Humayun did not have a position in any of the securities mentioned in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

The post Nio Stock: Temporary Headwinds Present Opportunity appeared first on TipRanks Financial Blog.

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Does IronNet Stock Rally Leave Room for More?

Thanks to the acceleration of digital transformation, and migration towards the cloud, shares of cybersecurity firm IronNet (IRNT) have headed north since it was listed on the exchange.  Notably, IronNet Read More... The post Does IronNet Stock Rally Leave Room for More? appeared first on TipRanks Financial Blog.

Does IronNet Stock Rally Leave Room for More?

Thanks to the acceleration of digital transformation, and migration towards the cloud, shares of cybersecurity firm IronNet () have headed north since it was listed on the exchange. 

Notably, IronNet stock began trading on the New York Stock Exchange on August 27, and has risen about 130% since then.

Growing cyberattacks amid ongoing digital transformations are fueling demand for IronNet’s offerings, and driving its stock higher. I have a bullish outlook on IronNet. (See IronNet stock charts on TipRanks)

Highlighting the increase in cyberattack incidents, IronNet’s co-CEO, Keith Alexander, stated that IronNet’s platform provides “real time exchange of cyber event information and online collaboration for a radically improved defense.”

Thanks to favorable industry trends, IronNet’s ARR (annual recurring revenue) increased by 24% year-over-year to $24.1 million in Q2. Furthermore, its customer count increased to 51 from 22 in the prior-year period. 

However, its operating loss widened, while its calculated billings declined to $3.5 million compared to $7.4 million in the prior year.

Nevertheless, the company stated that the momentum in new customers remains strong so far in the second half of FY22. Furthermore, the company expects to double its ARR in Q3, on the back of its cloud-focused business, large new customer contracts, and increasing market recognition.

Owing to strength in its cloud-based subscription revenue, IronNet expects to deliver revenues of $43 million to $45 million in FY22. Moreover, it projects an ARR of $75 million at the end of FY22. 

Thanks to the strong outlook, investors’ interest in IronNet stock remains elevated. TipRanks’ Stock Investors tool indicates that investors currently have a Very Positive outlook on IronNet stock, with 27.2% of investors who hold portfolios on TipRanks increasing their exposure over the past seven days.

Further, IRNT scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that it has strong potential to outperform market expectations.

Disclosure: On the date of publication, Amit Singh had no position in any of the companies discussed in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

The post Does IronNet Stock Rally Leave Room for More? appeared first on TipRanks Financial Blog.

Source : Tip Ranks More   

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