Deepti Sri
3 min read
-
Morningstar’s $6.50 fair value estimate implies 44% upside and earns Nio a four-star rating, but with “Very High” uncertainty.
-
The brokerage said Nio has “better delivered on its targets” after inconsistent execution in the past.
-
Morningstar forecasts 19% annualized revenue growth through 2030 and a 3% share of China’s passenger NEV market.
U.S.-listed shares of Nio, Inc. (NIO) logged their worst weekly performance in three weeks as China’s fierce EV price war, persistent cash burn and margin concerns weighed on investors, even as Morningstar forecast the automaker’s first profitable year in 2027.
Nio’s U.S.-listed shares fell about 5% for the week to close Friday at $4.52, just above their 52-week low of $4.37.
Morningstar Sees 44% Upside For NIO
Morningstar’s $6.50 fair value estimate implies a 44% upside from current levels. The research firm considers Nio undervalued and gives the stock a four-star rating, alongside a “Very High” uncertainty assessment.
The brokerage said Nio has “better delivered on its targets over the past year” after inconsistent execution in the past. Morningstar expects annual deliveries to more than double to about 670,000 vehicles in 2030 from 326,000 in 2025. Revenue is projected to grow at a 19% compound annual rate over the same period as Nio captures an estimated 3% of China’s passenger new-energy vehicle market.
Nio’s 2027 Profit Path Faces Cash-Burn Risk
Morningstar expects Nio’s operating margin to improve to 2.7% in 2030 from negative 16.9% in 2025. It forecasts losses to narrow through 2026 before the automaker reaches breakeven in 2027, with 2.5 billion yuan ($348 million) in net profit.
Nio’s first-quarter vehicle margin recovered to a multiyear high of 19%, helped by a stronger product mix and a 16% rebound in vehicle pricing. However, Morningstar cautioned investors against “reading too much into the single-quarter profit turnaround.” The research firm also expects Nio to continue burning cash for “at least a couple more years,” leaving a high risk that the capital-intensive automaker will need to raise additional funding.
Onvo Could Dilute Nio’s Premium Brand
Morningstar warned that intense competition could force Nio to offer more promotions and discounts, placing further “pricing pressure” on vehicle margins. Rising raw-material costs have already prompted management to guide for a full-year vehicle margin of 17% to 18%.
