Why Nio Stock Jumped More Than 10% Today

Nio (NYSE: NIO) stock had one of its best days in recent weeks today, flying 12% higher as of 12:40 p.m. ET Thursday.

After losing more than 50% value in the first half of 2024, Nio stock looked primed to rebound on its next earnings report in anticipation of higher revenue and better margins. The company didn’t disappoint, giving investors a chance to grab the electric vehicle (EV) stock today.

Nio’s deliveries and margins are finally recovering

Nio released its second-quarter earnings report Thursday morning. Here are some important numbers you must know (all changes are year over year unless otherwise mentioned):

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

• Revenue: Up 99% to $2.4 billion.

• Vehicle margin: 12.2% versus 6.2% in the year-ago quarter and 9.2% in the first quarter.

• Gross margin: 9.7% versus 1% in the year-ago period and 4.9% in Q1.

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

The numbers speak for themselves.

One of the biggest reasons why Nio stock slumped in recent months was a drop in its deliveries and margins. Lower production, however, was largely to blame as the China-based EV maker was upgrading its models to its next-generation platform. With the upgrades completed in April, I expected Nio’s deliveries, and therefore margins, to rebound.

Nio, in fact, delivered a record number of EVs in Q2 and cornered more than 40% of China’s battery EV market priced above 300,000 yuan during the quarter.

Should you buy Nio stock now?

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

While all of this sounds good and could propel Nio stock higher, let me warn you: Q2 was an exceptional quarter, so don’t expect Nio’s numbers to be as bombastic in the coming quarters. In other words, Nio’s deliveries and margins recovered in Q2 and should now stabilize after a long period of lull, which alone should be enough for the stock to maintain momentum.

Should you invest $1,000 in Nio right now?

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

Why Nio Stock Jumped More Than 10% Today was originally published by The Motley Fool