Nio stock price is rallying amid the L90 hype: is it a good buy today?

Nio stock price has staged a strong rebound this month, helped by the soaring orders for its upcoming brand. Its shares jumped to a high of $4.16 on Tuesday, its highest point since April 29, and 42% above the lowest level this year. 

Onvo L90 SUV pre-sales start

Nio share price has soared in the past few days as investors cheered the latest launch of its ONVO L90, its flagship sports utility vehicle. Its presale started last week, and data shows that it is seeing strong brand.

ONVO L90 starts at about $39,000, lower than other comparable brands, a sign that the company wants to undercut its rivals. In a recent note, Deutsche Bank analysts noted that its monthly sales could jump to over 10,000 over time. 

ONVO also plans to launch a new ultra-large SUV, known as L80 in September. This too, could sell over 5,000 vehicles a month. 

Media reports suggest that L90 vehicle has recorded between 30,000 and 35,000 pre-orders. The orderbook is expected to continue rising as its price is anticipated to decrease towards its official launch.

Nio orders and revenues to keep rising

The most recent delivery numbers showed that Nio delivered 24,925 vehicles in June, a 17% annualized increase. Its deliveries in the second quarter jumped to over 72,056, a 25.6% annualized increase. 

Most of its vehicle deliveries were from its premium brand known NIO, while ONVO sold 6,400 vehicles, lower than the expected 10,000 monthly increase. 

These numbers will help the business publish strong financial results in the coming months. Analysts expect its numbers to show that its revenues jumped by 15% in the second quarter, to 20 billion CNY from the same period last year. The most optimistic analyst sees its revenue rising to CNY 20.9 billion. 

Read more: Nio stock price has crashed: is it a good buy today?

Analysts hope that Nio’s flagship brand and the ONVO and Firefly models will lead to a 35% jump to its annual revenue to over CNY 89.73 billion. Some analysts see the revenue rising to CNY 114.15 billion. 

Nio’s main challenge is that it has struggled to achieve profitability. Its loss per share is expected to be high this year. Analysts see the company’s loss per share to be CNY 8.14, followed by CNY 6.74 in the next financial year. 

The other main challenge is the rising competition in the Chinese EV industry as companies like BYD, Great Wall Motors, and Li Auto continue gaining market share.

Nio stock price technical analysis

Nio share price chart | Source: TradingView

The daily chart shows that the Nio share price has rebounded in the past few days, moving from a low of $3.35 in July to $4.17 today. This rebound happened after it formed a double-bottom pattern. 

The stock has moved above the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bulls are in control. It has also moved above the 23.6% Fibonacci Retracement level at $4.11. 

The stock will likely keep rising as bulls target the 50% retracement point at $5.36, which is about 26% above the current level. 

Read more: Nio stock price trapped in a giant descending channel: What’s next?

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