Only one noteworthy earnings report came after the close on Thursday, and it was from Nio Inc. (NYSE: NIO).
The corresponding price action in the electric vehicle stock before and after the report make it the PreMarket Prep Stock of the Day.
Buyer Beware: It's extremely difficult to be a Wall Street analyst and try to determine a company’s potential earnings and the trajectory of its price. It is even more difficult to go on CNBC ahead of a company’s earnings report and predict the short or long-term price action of an issue.
After the close on Thursday, Deutsche Bank (DE:DBKGn) analyst Edison Yu appeared on CNBC before Nio's fourth-quarter report. In his opinion, the recent volatility and decline in Chinese ADRs may have created a buying opportunity in Nio for the long term.
Aggressive Buyer: Seizing on the comments from Yu, which were intended for the long-term, investors aggressively purchased Nio shares in after-hours trading. It should be noted the price action took place on heavy volume that continued until the actual report was released at 6 p.m.
Interestingly, the rally peaked at $22.97, was just above Nio's current high for the week at $22.60
Nio's Q4 Report: After the close, the company announced a fourth-quarter adjusted EPS loss of 16 cents per share, which beat the expected loss of 21 cents. Also, the company had a slight sales beat of $1.55 billion vs. a $1.53-billion estimate. Delivery guidance for the first quarter missed Wall Street’s expectations, weighing on the issue.
See Also: Nio Reports Q4 Beat, Hints At Reacceleration In Growth In 2022
PreMarket Prep's Take On Nio: When the issue was being covered on the show, it was trading at the $21 area. Co-host Dennis Dick said Nio just had a major rally from $13.60 to $22.60 in six days, "and it seems overbought to me."
The author of this article alerted investors that if the issue was unable to hold the premarket low of $20.60, there may additional downside ahead.
NIO Price Action: After a lower open ($20.33 vs. $21.98), Nio attempted to rally but found sellers just above the bottom of Thursday’s range ($20.66) at $20.75 and resumed its mover lower.
It has continued to make new lows for the session, with the current one being $19.35 as of 12:30 p.m., and is attempting to rebound. The stock is trading down 9.96% at $19.79 Friday afternoon.
The discussion on Nio from Friday’s PreMarket Prep show can be found here:
Photo courtesy of Nio.
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