Reality kicks in for NIO
I am making a different approach to my charts now and concentrating on stocks (as I have always proffered them before any other instrument).
As stocks are mainly driven by fundamentals - company or policy wise, I am going to use the awesome built-in tools from #TradingView in regards to a company analysis .
I am using the most important key metrics for the performance and evaluation of a company that are looked by the investors - EBITDA, EPS , Net Income and Free Cash Flow.
Looking towards Nio . Indeed a fairy new company, striving to place it's won mark in the electrical auto industry. The steady climb in the price has been backed no more by the promise of a revolution in the auto industry and in trucks - most specifically. FOMO and the overall markets supported by the FED and the good shape of the economy has dragged Nio to "have a piece of the pie" too.
Looking under the hood: All of the stats are negative. So why to invest in a company with negative free cash flow, net income and EPS? Stats are improving, that is for sure, but what can the 2-year-old Chinese company can do against i.e. Tesla?
Volume is getting lower and with recent days we see investors cashing out on their positions. Maybe it's time to see a proper correction in the stock price to maybe be more realistically accurate with the valuation.
In my view, the price can go as low as $30 in the short - term. And $16 long-term. I am staying reserved in investing in the company if results do not improve, or the company indeed shows something truly promising.