TLDR
- Mizuho analyst raised NIO price target to $6 from $3.50 following Q2 earnings, maintaining Neutral rating
- Q2 revenue of $2.65B grew 9% year-over-year but missed $2.73B consensus estimate
- Adjusted EPS of $0.32 beat $0.31 forecast while reported loss of $0.32 per share missed expectations
- Company guided for 89,000 Q3 deliveries representing 44% growth but full-year targets remain challenging
- Stock gained 3% to $6.58 after earnings with institutional investors increasing positions
NIO delivered mixed second-quarter results that prompted analyst Vijay Rakesh to raise his price target despite revenue falling short of expectations. The Chinese electric vehicle manufacturer reported quarterly revenue of $2.65 billion, up 9% from the prior year.
The revenue figure missed Wall Street’s consensus estimate of $2.73 billion by $80 million. However, NIO managed to exceed adjusted earnings expectations with $0.32 per share versus the $0.31 forecast.
The reported earnings picture was less favorable. NIO posted a loss of $0.32 per share, missing analyst expectations of a $0.30 loss. This highlights ongoing profitability challenges for the EV maker.
Analyst Upgrades Target Despite Concerns
Mizuho Securities analyst Vijay Rakesh raised his price target on NIO to $6 from $3.50 per share. He maintained a Neutral rating on the stock following the earnings release.
$NIO Together with the L90, Onvo L60 is finally starting to get the recognition it deserves. An underrated gem.
Show this beauty some love NIO fam! pic.twitter.com/ZCxzDHBUOt
— Tom Toromow (@TomToromow) September 1, 2025
Rakesh, who ranks 121 out of over 10,000 analysts on TipRanks, noted stronger demand for NIO’s newer vehicles. The ES8 and Onvo L90 models are seeing increased production as manufacturing scales up.
NIO guided for 89,000 deliveries in the third quarter. This would represent 44% year-over-year growth compared to Q3 2024.
The analyst warned that NIO’s full-year delivery target of 120,000 to 150,000 units may prove difficult. The company currently delivers approximately 37,000 vehicles monthly and would need to increase this pace.
Margin Improvements Drive Optimism
Gross margins showed improvement in the second quarter. Overall gross margin reached 10%, slightly below forecasts, while vehicle margins improved to 10.3%.
Rakesh expects Q3 margins to climb to approximately 10.7%. Lower material costs and increased L90 sales should drive the improvement.
The analyst cautioned that NIO’s long-term margin targets above 20% remain challenging. Price competition in China’s EV market continues to pressure profitability across the sector.
NIO trades at roughly 0.8x projected 2026 sales, in line with competitors XPeng and Li Auto. Rakesh views the valuation as fair given the balance between improving demand and margin pressures.
Institutional Activity and Market Performance
Institutional investors have been actively adjusting their NIO positions. Franklin Resources increased its stake by 50.9% in Q2, while First Trust Advisors boosted holdings by 67.4%.
Vident Advisory more than doubled its position with a 110.4% increase during the quarter. Institutional investors now own 48.55% of NIO’s outstanding shares.
The stock has surged 51% year-to-date despite recent volatility. NIO currently trades with a market capitalization of $13.31 billion and maintains a beta of 1.20.
Wall Street analysts remain divided on NIO’s prospects. Recent price targets range from Barclays’ $3.00 to JPMorgan’s $8.00. The average analyst price target stands at $5.59, implying potential downside from current levels.
NIO updated its Q3 2025 guidance following the earnings announcement but did not provide specific EPS projections for the quarter.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
