Nio Stock Buy Or No

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Nio Stock Buy Or No

NIO Stock: Is It The Right Time To Buy It?

When we talk about EVs, the brands that come to mind are Tesla and BYD. However, the reality is that there are a lot more great brands in the EV space. One such name is NIO, a famous electric vehicle maker from China.

The NIO stock price is up by 47% in a period of one year. Despite this, the stock is trading 90% below its 5-year highs. So, does this mean it is the right opportunity to buy NIO stock? To answer this, we must take a closer look at NIO.

NIO Stock Trades 90% Below Its ATH

Generally, a stock that's trading 90% below its ATH is considered a bargain. But it can also mean the stock was trading at unreasonably high levels in the past and is now trading at a fair price.

But in the case of NIO, the key issue was that it was a loss-making entity for a long time. Even now, the business model of NIO remains unproven. But despite this, the market cap of NIO is close to 10 billion.

So, if NIO is still not generating a profit, its sales are growing at a steady pace. For example, the company delivered 40K cars in just one month. This clearly shows that NIO is expanding its critical mass. If we look at the numbers from around a year ago, the y/y sales growth turns out to be 63%.

With all things considered, NIO stock looks like a really good option. It has a growing user base and proprietary technology. Also, the fact that NIO stock is available at a bargain is a positive thing.

However, long-term investors should adopt a wait-and-see approach for NIO stock. Why? It is better to wait for the company to turn profitable before buying its stock.

Of course, this approach means you will miss out on some of the early gains. But it also helps you avoid any losses if things turn south for NIO again.

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