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Is the party over for China EV Play Nio (NYSE: NIO) after spiking more than 13x over the past year?

Nio is starting to slide after hitting an all-time high of nearly $ 67 so far, the decline has not been as massive ($ 67 to $ 55), however, there are good reasons the hiring may continue

First, with the ability to “get in on the ground floor” with new EV games, investors can continue to take profits with Nio and convert their profits into new positions.Second, the fast-growing electric vehicle company could lag behind today given increased competition in its home market of China falling short of sky-high expectations

With both factors on the table, stocks seem to go down rather than up in the future. Just think about that before you buy in after the last pullback

This EV startup may have gone public in 2018, but it wasn’t until 2020 that it got hot with investors.The rush to this EV game followed investors who offered Tesla (NASDAQ: TSLA) their fists with their hands

But it wasn’t just the potential of becoming the “next Tesla” that excited investors about the Nio share. With a leap in operating performance, the three-digit growth in deliveries contributed to justifying the multiple parabolic movements of the share

Factors that indirectly affect Nio’s prospects also played a role in moving the needle. For example, the election of President Joe Biden changes little about the game for this China-based EV maker, but also the epic rally of the EV shares after the election has expanded to include this name

But even if the company’s growth could partially justify its current valuation ($ 85) $ 6 billion), further profits may be out of reach for Nio stocks. Why? With a new hot EV stock on the block, some of the excitement that drove this stock to new highs could gradually dissipate

I’m talking about Churchill Capital IV (NYSE: CCIV) which is getting closer to its alleged merger with hot EV startup Lucid Motors. The “story” behind Lucid is that it’s a tough contender to be Tesla a run for Money Giving In the face of this interesting electric vehicle situation, forget investors are bidding Nio in the hope that it will be the “next Tesla”

Instead, investors are offering Lucid stock soon in the hope that it will be the “next nio” ”

That alone doesn’t make the bear stand out, but it could limit its ability to continue melting to new highs. What could really hurt Nio stock in the future? The competition in their home market is intensifying

Admittedly, Nio bears like me will be looking for clues that whatever glitters is not gold in this much-touted EV game. A year ago, when it seemed near bankruptcy, the negatives of its prospect thought that this former penny stock would go to zero

Instead, it went on its aforementioned 13-fold rally. Just because the stock has so far proven its bears are wrong doesn’t mean it will continue to do so, along with the risk of retail investors leaving Nio and Getting into the latest EV game on the block, there are factors related to the company’s underlying business that could adversely affect its stock price

That would be the competitive risk New energy vehicle sales (electric and hybrid electrics) in China are set to increase 41% in 2021 As competition intensifies, the sharp surge in underlying demand may not be enough to keep growth with the forecasts to reconcile

Competition is coming from all sides There are competing China-based EV companies like Xpeng (NYSE: XPEV) and established global EV manufacturers like Tesla. And there is increasing competition from global automakers like General Motors (NYSE: GM) and Volkswagen (OTCMKTS: VWAGY)

Compared to last year, Nio’s sales have increased significantly. One after another (month after month), however, delivery growth was only 2% growing 50% (still an impressive number), stocks could continue to fall as it becomes apparent that the stock is way ahead in the past 12 months

At current prices, Nio has a market cap of $ 85 billion, as many have noted (including InvestorPlace’s Josh Enomoto) that is above GM’s current valuation if competition gets better and growth falls short of forecast , don’t expect this to last

Boost falling interest among trending investors, and it matters more to making Nio stock fall rather than rise in the near future

At the time of publication, Thomas Niel held (neither directly nor indirectly) positions in the securities referred to in this article

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Nio share

World news – FI – The Nio share could fall out of favor and could slide further

Source: https://investorplace.com/2021/02/nio-stock-falling-out-favor/