NIO Inc. (NIO) reports Q4 2020 earnings after Monday’s closing bell, with analysts looking for a loss of $0.38 per-share on $6.7 billion in revenue. If met, earnings-per-share (EPS) will mark an 85% loss reduction compared to the same quarter last year, when the Chinese EV manufacturer was trading at just 1/15^th of its current price. The stock fell in November after beating Q3 estimates but recovered quickly, posting an all-time high at 66.99 on Jan 11.

NVIDIA Partnership

NVIDIA Inc. (NVDA) and NIO just announced a partnership to develop a new generation of self-driving vehicles, using NVDA’s DRIVE Orin system-on-a-chip to power E7 sedan technology. The first production vehicle is expected to roll off the assembly line in 2022. The stock topped out right after the news in reaction to the fourth debt offering since 2019, reminding shareholders the company still hasn’t posted a profitable quarter.

Still, NIO continues to grow at a phenomenal rate, with January deliveries increasing by 352.1% year-over-year to a record 7,225 vehicles. Breaking it down, the company noted “deliveries consisted of 1,660 ES8s, the Company’s 6-seater and 7-seater flagship premium smart electric SUV, 2,720 ES6s, the Company’s 5-seater high-performance premium smart electric SUV, and 2,845 EC6s, the Company’s 5-seater premium electric coupe SUV. As of January 31, 2021, cumulative deliveries of the ES8, ES6 and EC6 reached 82,866 vehicles”.

Wall Street and Technical Outlook

Wall Street consensus has grown more cautious after strong 2020 returns, with a ‘Moderate Buy’ rating based upon 7 ‘Buy’ and 4 ‘Hold’ recommendations. No analysts are recommending that shareholders close positions and move to the sidelines. Price targets currently range from a low of $54 to a Street-high $80 while the stock is now trading nearly $6 below the low target. The worldwide chip shortage is impacting this poor placement, which has also weighed on Tesla Inc. (TSLA).

The stock topped out at 13.80 just two days after coming public in the United States at 6.00 in September 2018. It mounted that resistance level in July 2020, entering a momentum-fueled advance that lost steam after stretching above 50 in November. A January breakout above that barrier failed about two weeks ago, dropping NIO into an intermediate correction that’s held, so far at least, above December range support at 38.43.

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Disclosure: the author held no positions in aforementioned securities at the time of publication.