Is NIO extremely undervalued?
My math might be whack on this, definitely correct me if I am. None of this is financial advice, you shouldn’t touch NIO unless you do your own DD!
NIO is currently trading at a 37 billion market cap (per y!) which looks to be about three times their projected annual revenue (my math might be wrong on this, not a financial advisor, double check numbers pls) according to some analysts I’ve been looking at.
Now this normally may not be insane, but for EV companies this isn’t the trend at all.
Looking at the market cap for Lucid (LCID) for example which I know is a very popular ticker around here, LCID is currently trading at about 30x their projected annual revenue. That’s right, thirty times.
Of course we know correlation <> causation, but the pattern with EVs is pretty standard. Look at Rivian (RIVN) which is currently at a market cap of $43b when analysts are only projecting 2 billion in sales this year. It’s insane.
Of course this could also mean that the majority of up and coming EVs are just overvalued, but in the current market and on the short term I really believe NIO should be trading much higher – I know there have been people saying 100%+, 200%+ – but guys, I honestly think it’s possible NIO could be trading at 1000-2000% what it is right now one day if institutions catch wind of just how successful this company has been in selling vehicles.
The risks of NIO though are obvious. We’re dealing with a ticker from the Chinese Market – if you understand those risks and are willing to dip your toes, I know I’ve heavily invested in NIO and really think others should take a second look at these numbers and follow the math.
Submitted March 25, 2022 at 02:26AM by bryan7474
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