Chinese electric vehicle manufacturer NIO (NYSE:NIO) may have seen its stock make a remarkable recovery over the past months but on Wednesday, it recorded a decline. The stock dropped by as much as 3% on Wednesday as fresh fears about the coronavirus affected the markets. In light of the latest events, it could be a good idea for investors to take a closer look at the NIO stock.
The number of coronavirus infections in the United States has seen a spike in recent days and that has driven apprehension about fresh lockdown measures. A new round of lockdowns is almost certain to affect the economic recovery and that led to the selloff in the American stock market.
Among the many stocks that recorded declines on Wednesday, NIO was one of the notable ones. That being said, it is also necessary to point out that the NIO stock has gained as much as 580% so far in 2020 and much of that has been fuelled by positivity about the electric vehicle sector.
Third Quarter Report
In this situation, the decline in the stock price is not exactly surprising. However, it is also necessary to remember that NIO does not actually sell its electric vehicles in the United States. Hence, it is unlikely to have a direct impact on its sales.
If an investor looks beyond the current concerns with regards to the coronavirus fears in the United States, the more important thing for the NIO stock is going to be its third-quarter earnings report.
The report is going to be published by NIO in November and it appears that the company delivered an impressive performance. The company announced earlier that its sales had grown by as much as 154% on a year on year basis in the third quarter.
That was a better performance than NIO’s own projections. In the same quarter, NIO boosted its production operations to raise production by 25% and also raised additional capital by way of a secondary offering.
The company is not yet profitably but that has not bothered investors so far. One of the reasons that lie in the fact that NIO operates in a segment that has the potential for significant growth in the future.
The United States and China are big backers of electric vehicles and that can only be a positive for NIO. The Chinese market for electric vehicles is growing quickly and NIO aspires to be one of the main players in the market. Hence, NIO could be a company that could be worth tracking at this point.
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