NIO - are the fundamentals good enough?Analysts have adjusted earnings estimates and thus, an earnings beat does not always translate to good prospects for some of the businesses:
Earnings Estimate Management
From the earnings forecast by Investing above, we can note the following:
The coming EPS forecast (for the period ending 06/2023) is worse than the previous period ending 03/2023.
In fact, the EPS forecast is expected to be the worst at record -2.96 since 06/2022.
For the revenue forecast, it is expected to be lower than the previous quarter. It stands at 9.16B compared to the forecast of 11.93B from the previous quarter ending 03/2023.
This is in fact the lowest revenue forecast since 06/2022.
In the event that NIO beats both EPS & revenue forecast in the coming earnings, is the company doing better? In my opinion, it is a “NO”.
Beating such an estimate is not something to brag about as the company remains unprofitable with “falling” sales. It can be too early to call this a falling trend but the quarterly signs are there.
Conclusion
Before we embrace any content from news agencies or investing portals, let us do our due diligence.
One quarter does not define a trend and thus, looking at the business as a whole from afar can help to put some objectivity and remove the impact of seasonality. This will help to put things in a better context as we even out peaks from new launches and service offerings.
