TLDR
- Freedom Broker downgrades NIO stock from Buy to Hold while raising price target to $6.50
- Q2 revenue of $2.65 billion missed consensus estimates despite 25.6% delivery growth
- Average selling price declined due to model refresh pressuring profit margins
- Q3 guidance disappointed Wall Street with delivery growth of 41-47% expected
- Stock trades at $6.32 after gaining 50% over past six months
NIO stock received a mixed signal from analysts this week as Freedom Broker downgraded the rating while simultaneously boosting the price target. The Chinese electric vehicle maker now carries a Hold rating with a $6.50 target, up from the previous $4.90.
The rating change follows NIO’s mixed second quarter results that showed strong delivery growth but revenue disappointment. Freedom Broker analyst Dmitriy Pozdnyakov made the downgrade citing concerns about near-term profitability.
NIO delivered 72,056 vehicles in Q2, representing growth of 25.6% year-over-year. However, second quarter revenue came in at $2.65 billion, falling short of the $2.73 billion consensus estimate.
Pricing Pressure Weighs on Margins
The company’s average selling price declined during the quarter as NIO refreshed its model lineup. This pricing pressure has created headwinds for margin expansion despite the delivery volume increases.
Pozdnyakov noted that while the new FIREFLY sub-brand contributed to delivery growth, the model refresh strategy has weakened pricing power. The analyst expressed concern that profitability recovery may take longer than expected.
Adjusted earnings per ADS came in at $0.32, slightly beating the $0.31 forecast. However, the revenue miss overshadowed this modest earnings beat.
Q3 Outlook Falls Short
NIO’s third quarter guidance disappointed investors and analysts. The company projects deliveries of 87,000 to 91,000 vehicles, representing growth of 41% to 47% year-over-year.
Revenue guidance for Q3 ranges from $3.04 billion to $3.19 billion, up 16.8% to 22.5% from last year. Despite showing growth, these projections came in below Wall Street expectations.
The weaker-than-expected outlook prompted Pozdnyakov to move to the sidelines on NIO stock. The analyst believes upside will remain limited until the company can stabilize pricing and show clearer progress toward profitability.
Multiple analysts have recently adjusted their NIO price targets. Bernstein set a $5.50 target while BofA Securities raised its target to $7.10. Mizuho increased its target to $6.00 and US Tiger Securities boosted its target to $8.00.
NIO stock has gained 40.6% year-to-date and trades near its recent highs. The company disclosed 31,305 vehicle deliveries for August 2025 in its latest SEC filing as it continues monthly delivery updates.
