Why Nio Stock Crashed After Earnings Today
Investors were expecting Nio (NYSE: NIO) to report decent first-quarter results after several of its peers had already done so. But more important was what the company would say regarding the current quarter, which has included Chinese lockdowns that have disrupted supply chains and the ability of customers to purchase vehicles.
The report was disappointing on both levels, really. As a result, investors punished Nio shares this morning. After dropping nearly 10% at the open, the stock was still down 6.4% as of 11 a.m. ET on Thursday.
The first disappointment came from Nio's first-quarter results. The company actually beat revenue estimates as well as reporting slightly less of a net loss than was expected. But it also showed a continuing drop in profit margin. Gross margin dropped to 14.6% sequentially compared to 17.2% in the fourth quarter of 2021. Year over year, that metric was down by almost 500 basis points. And vehicle margin was the main culprit, with a lower average selling price due to product mix as well as rising battery costs. But what it said about the current quarter was also somewhat of a disappointment for investors.
Source Fool.com
