Nio stock price has imploded this year, and is hovering at its lowest point since 2020 after reporting results that largely missed analysts’ estimates. It crashed to a low of $3.75 on Friday, down by 52% from its highest point in September 2024. This crash has led to a $7.2 billion wipeout as the market cap has dropped from $14.68 billion to $7.48 billion.
Nio stock price analysis
Technicals suggest that the Nio share price has crashed in the past few months, moving from a high of $7.72 in October to $3.75 today. It has dropped to its lowest level since 2020, meaning that it has underperformed other top EV companies in China like XPeng, Li Auto, and BYD.
The daily chart shows that the Nio share price has crashed below the key support level at $4, where it failed to move below several times in January and February. That is a sign that bears have prevailed.
Nio stock has also plunged below the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bears have prevailed.
Most notably, there are signs that Nio has formed a head and shoulders pattern, whose head is at $7.72 and the right shoulder is at $5.50. The neckline of this pattern is at $3.68, where the stock is hovering at today.
Therefore, there is a risk that the stock will have a strong bearish breakdown this year. These risks will jump if the stock moves below the crucial support level at $3.68. A complete break below that level will point to more downside, with the next level to watch being at $3, followed by $2.5.
The stop-loss of this trade is at $4, where the stock struggled to move below in January and February.
Read more: Nio stock price forecast: epic comeback likely after earnings
Nio shares crashed after weak earnings
The Nio share price has crashed mainly because it reported earnings that missed analysts’ estimates and its net loss was higher than expected. The data showed that Nio’s deliveries in the fourth quarter stood at 72,690, bringing the total deliveries in 2024 to 221,970, a 38% increase.
These numbers were strong in all measures, especially because the EV industry slowed and is facing competition pressure.
Nio’s revenue stood at $2.6 billion, up by 15% from the same quarter a year earlier. Most importantly, its gross profit rose by 80%, meaning that the company was on a path towards profitability in the coming years.
The challenge, however, is that Nio’s other costs, including share-based compensation, remained high during the quarter. Its net loss stood at over $974 million, a 32% increase from the same quarter last year. The CFO said:
“Looking ahead to 2025, we will sharpen our focus on enhancing profitability by driving cost reductions through technological advancements, optimizing operational efficiency, and accelerating scalable growth.”
Nio has some bullish catalysts that will push its stock higher in the long term. For one, it has now launched more brands to help supercharge its sales. In addition to its premium vehicle brand, it has launched its cheaper ONVO and Firefly brands.
This means that the company will be targeting all three target markets. As such, while ONVO’s production has faced challenges, there is a likelihood that it will ramp up nicely this year. It now expects to deliver between 41k and 43k vehicles in the first quarter, a 36.4% annualized growth.
Read more: Nio stock price prediction 2025: a 70% surge is possible
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