NIO (NYSE:NIO) Valuation in Focus After Q3 Growth, Margin Gains, and Cautious Q4 Outlook

NIO (NYSE:NIO) just shared its third-quarter results, and a few things immediately stand out for investors. Deliveries climbed sharply and gross margins improved as new models took hold. However, management also lowered Q4 guidance in response to subsidy cuts and shifting demand.

See our latest analysis for NIO.

NIO’s share price has faced pressure recently, dropping 23.5% over the past month as investors reacted to cautious Q4 guidance and the winding down of EV subsidies, despite record delivery numbers and improved vehicle margins. Still, total shareholder return over the past year is a solid 21.9%, reflecting optimism about NIO’s expanded model lineup and international push. However, momentum appears to waver in the short term.

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This mixed setup has raised a crucial question for investors: is the recent pullback making NIO stock undervalued, or is the market already factoring in all the growth NIO can deliver from this point forward?

Most Popular Narrative: 20% Undervalued

Compared to NIO’s recent closing price of $5.46, the narrative’s fair value estimate sits notably higher. This context is setting expectations for further upside, even as day-to-day trading remains volatile.

Strong delivery growth driven by the launch of new high-demand models (ONVO L90, all-new ES8, FIREFLY) and a multi-brand strategy positions NIO to capture a broader user base and higher market share in premium and mainstream EV segments. This supports robust top-line revenue growth and volume leverage. Expansion and densification of NIO's proprietary Power Swap network and charging infrastructure across China's largest cities and highways reduces range anxiety and further differentiates NIO from competitors. This accelerates EV adoption and increases recurring services revenue and margin stability.

Read the complete narrative.

Want to know what’s driving this higher fair value? The narrative’s secret sauce is wrapped in a blend of ambitious new model launches, infrastructure expansion, and a profitability path most doubted possible. Which financial assumptions tip the scales in NIO’s favor? Unpack the full story and see how the numbers stack up.

Result: Fair Value of $6.83 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent net losses and fierce competition in the EV market could quickly shift sentiment if NIO’s path to profitability stalls or if margins compress further.

Find out about the key risks to this NIO narrative.

Build Your Own NIO Narrative

If you see things differently or want your own perspective on NIO’s numbers, dive into the data and shape a personalized outlook in just a few minutes. Do it your way

A great starting point for your NIO research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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