NIO: Chip Licensing And Delivery Ramp Will Support Future Share Upside

Analysts have trimmed their price target on NIO by roughly $1.70 per share, reflecting weaker near term delivery guidance, softer 2026 demand expectations, and heightened competitive pressures, despite resilient revenue growth.

Analyst Commentary

Bullish analysts acknowledge that the reset in expectations around NIO's near term deliveries and 2026 demand has weighed on sentiment, but they continue to highlight several supportive factors for the longer term equity story.

Recent research points to a widening dispersion of views, with some trimming targets and moving to the sidelines while others remain constructive on the company’s execution trajectory, product cycle, and positioning within China’s premium new energy vehicle market.

Bullish Takeaways

• Bullish analysts still see upside to the current share price, even after target cuts, arguing that the revised targets imply a more balanced risk reward profile that already discounts weaker near term volumes.
• They highlight earlier signs of strong order momentum for key models, including flagship SUVs and sedans, as evidence that NIO can sustain mix driven revenue growth once temporary subsidy related disruptions and model gaps ease.
• Positive commentary emphasizes the potential for margin expansion as production ramps, cost efficiencies improve, and the company moves through a period of elevated launch and marketing spend into a more normalized operating environment.
• From a valuation perspective, bullish analysts frame NIO as a leveraged play on ongoing growth in China’s new energy vehicle penetration. They contend that successful execution on its Q4 delivery targets and subsequent model launches could support multiple re rating over the medium term.

Overall, the Street appears to be recalibrating expectations rather than capitulating. Constructive voices are focused on NIO’s ability to convert its product pipeline and brand equity into improving scale, profitability, and shareholder value once near term headwinds abate.

What's in the News

• NIO has begun externally supplying its in house Shenji NX9031 automotive chip technology, licensing it to a third party auto chipmaker, with potential orders reportedly worth hundreds of millions of RMB (CnEVPost)
• Third quarter 2025 vehicle deliveries rose to 87,071 units, up 40.8% year on year and 20.8% quarter on quarter, driven by contributions from the NIO, ONVO, and FIREFLY brands (Company announcement)
• For the fourth quarter of 2025, NIO guided to vehicle deliveries of 120,000 to 125,000 units and revenue of RMB 32.8 billion to RMB 34.0 billion, implying mid 60s to low 70s percent growth versus the prior year quarter (Company guidance)
• The board scheduled a meeting on November 24, 2025 to review unaudited third quarter 2025 financial results (Company filing)

Valuation Changes

• The Fair Value Estimate has risen slightly from $9.00 to about $9.09 per share, reflecting a modest uplift in the long term outlook.
• The Discount Rate has declined marginally from roughly 12.8 percent to 12.4 percent, indicating a slightly lower perceived risk profile or cost of capital.
• The Revenue Growth Assumption has increased slightly from about 44.4 percent to 45.4 percent, signaling a modestly more optimistic view on top line expansion.
• The Net Profit Margin Assumption has fallen significantly from roughly 5.0 percent to about 1.5 percent, pointing to meaningfully lower expected profitability in the forecast period.
• The Future P/E Multiple has increased sharply from about 24.0x to 82.1x, implying a substantially higher valuation placed on anticipated earnings despite reduced margin expectations.