NIO Stock Gets a brand new Street High Price Target

If anyone was under the impression electric car stocks would pause for a breather following 2020’s blistering rise, they forgot to hand Nio (NIO) the memo. The Chinese EV maker has seamlessly advanced into 2021, with shares now up by thirty one % since the turn of year.

The company has long been a major beneficiary of the current trend for both EV manufacturers and development stocks. Sticking to the latest annual Nio Day event, J.P. Morgan analyst Nick Lai matters four strategic milestones, exactly the reason he thinks Nio will continue to exchange more like a fast-growth technology/EV inventory compared to a carmaker.

These include the pivot out from the existing products’ Mobileye EQ4 solution to an in-house autonomous driving (AD) solution based on Nvidia architecture. A solid state battery for the following new model – an ET7 sedan – boasting 150kwh capacity or maybe range of over 1,000km, and the commercialization of LiDar to deliver super sensing capability on ET7.

Many intriguing of all the, however, would be the first of content monetization? e.g. Ad as a service.

Lai feels this opens up a whole brand new world of monetization choices for automobile makers and also suggests succeeding cars will be like smartphones with wheels.

For Nio’s next model, the ET7 sedan, owners will be in a position to access a full AD service for Rmb680 a month.

Assuming 5 7 years of usage, Lai says, Cumulative transaction will be higher or similar than the one-time AD choice payment at Xpeng or Tesla.

Down the road, Lai expects Nio will ramp up content monetization revenue in other services or products.

The analyst’s sensitivity analysis suggests such content revenue could increase quickly from 2022, implying accretion of equity present value of ~US$21 35/shr.

Accordingly, Lai reiterates an overweight (i.e. Buy) rating on NIO shares and bumped the purchase price goal up from fifty dolars to a street high of seventy five dolars. Investors may be pocketing profits of eighteen %, really should Lai’s thesis play through over the coming months. (to be able to view Lai’s track record, click here)

Nio has good assistance amongst Lai’s colleagues, though its current valuation provides a conundrum. NIO’s Moderate Buy consensus rating is based on 8 Buys and 4 Holds. However, the share gains keep coming in heavy and fast, and also the $52.28 usual price target now suggests shares will drop by ~19 % over the next 12 months.

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