by Ian Harvey
December 31, 2019
Shares screamed higher after the China-based electric-vehicle maker reported a third-quarter loss that narrowed more than expected, as revenue and vehicle deliveries surged, helping to provide an upbeat outlook for the current quarter.
The company reported a net loss for the quarter to Sept. 30 of 2.52 billion renminbi ($352.8 million), or RMB2.48 per ordinary share, after a loss of RMB9.76 billion, or RMB42.59 a share, in the same period a year ago.
Revenue increased 25.0% to RMB1.84 billion ($257.0 million), above the FactSet consensus of RMB1.70 billion.
Vehicle deliveries totaled 4,799 vehicles, including 4,196 ES6s and 603 ES8s, representing a 35.1% increase from the sequential second quarter. The ES6 is the 5-seater high-performance sport-utility vehicle (SUV), which began deliveries in June, and the ES8 is Nio’s flagship SUV, which began deliveries a year earlier.
Nio shares hit gains of as much as 101.2% yesterday, posting the second-biggest one-day gain since it went public in the U.S. on Sept. 12, 2018. Volume was already by far the heaviest on record, well above the previous record of 184.6 million shares on Nov. 5, 2019.
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Profiting from NIO Call Options…..
Two of “Stock Options Made Easy” membership groups have benefited from this surge in Nio’s great report. Let us look at each…..
Armchair Traders…..potential profit was up as high as 544% during the day. This option call trade has been running since August 02, 2019; the shares continued to pull-back so members were able to double-down, bringing the cost to $0.18 and then exiting yesterday at $1.16.
Earnings Predictions Members entered the trade yesterday morning at $0.40 and if exiting at $2.28, were able to realize a gain of 470% - a great potential profit within a few hours!
For the fourth quarter, NIO said it expects revenue of RMB2.81 billion, well above the FactSet consensus of RMB2.07 billion, while deliveries are expected to spike up to jump to over 8,000 vehicles.
“The electric vehicle sector experienced substantial softness in the second half of 2019 after the reduction of EV subsidies in China,” said Chief Executive William Bin Li. “Despite the challenges, NIO’s sales improved solidly since September.”
“Facing a continuous soft auto market, we strongly believe the smart premium EV sector will outperform the industry in its growth rate in the foreseeable future,” said Chief Financial Officer Wei Feng.
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The questions remain......Will NIO shares continue to perform from here?
Will we recommend another options trade on NIO?
What will “Stock Options Made Easy” advise members to do?
AS ALWAYS THE DECISION IS YOURS!
An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!