Now Could Be the Best Time to Buy Nio Stock as It Slumps to 52-Week Lows

Now Could Be the Best Time to Buy Nio Stock as It Slumps to 52-Week Lows

Mohit Oberoi

Thu, September 3, 2026 at 8:11 PM GMT+3 4 min read

• NIO -1.55%
• LI +2.57%

Chinese electric vehicle (EV) stocks are having a rough ride this year amid the slowdown in the country's auto market, which is the biggest in the world by a fairly wide margin. Among the listed names, Nio (NIO) and XPeng Motors (XPEV) hit their 52-week lows yesterday, Sept. 2. Li Auto (LI) is also not very far from 52-week lows as investors have shunned Chinese EV stocks this year.

Notably, Nio stood out among peers this year, but pessimism toward Chinese EV stocks has caught up of late, and NIO stock has lost nearly a quarter of its market cap, with a drawdown from the 2026 peak of nearly 45%. Let's analyze Nio's recent slump and examine whether the dip is a buying opportunity.

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Why Has Nio's Stock Fallen?

While the broader slump in Chinese EV stocks is to blame for NIO's decline, the company's recent financial performance has also failed to impress. Nio's Q2 2026 deliveries rose 49.4% year-over-year (YoY) but fell short of the company's guidance. Its August deliveries also rose 14.5% YoY but marked the second consecutive month when deliveries fell on a sequential basis.

The company's Q3 delivery guidance also failed to impress. While it calls for a YoY rise of between 24% and 28%, the bottom end of the range implies flat sequential growth, and even the top end implies a bare 3.1% growth over Q2. Nio's Q2 earnings also added to the gloom, with the company missing on revenues. While the losses did narrow, the management's commentary on rising component costs, particularly memory and battery prices, dampened sentiment.

NIO Stock Forecast

The analyst community's reaction to Nio's Q2 earnings was on expected lines, and Citi lowered the stock's target price from $8.20 to $7.10. JPMorgan went a step further and downgraded the stock from "Overweight" to "Neutral" while lowering the target price from $7 to $4.50.

Overall, of the 16 analysts polled by Barchart, seven rate NIO stock as a "Strong Buy" and two as a "Moderate Buy." Six analysts rate Nio as a "Hold" and one as a "Strong Sell." Amid the recent slump, Nio has fallen even below its Street-low target price of $4, while the mean target price of $6.17 is over 59% higher than current levels.

The Selloff Has Gone a Bit Too Far

I believe while Nio's recent financial performance hasn't been that impressive, the market's reaction has been a bit too harsh. The company's gross margins have improved significantly over the last year, even though they did come off sequentially in Q2 on higher costs. The company has now posted adjusted operating profit for three consecutive quarters, and while it is still posting GAAP losses, the management's focus on cost cuts seems to be having a positive impact on the bottomline.

Moreover, while Nio's mass-market Onvo brand hasn't performed well amid the intense competition in that segment, the eponymous Nio brand has been doing quite well. The pricing for the Nio brand has also held up well, and its average selling prices in Q2 were higher than mainstream luxury brands like Mercedes and Audi. Nio generated positive free cash flows in the first half, and the management is optimistic about repeating the feat in the back half of the year.

Should You Buy NIO Stock?

The EV industry is no longer as compelling a story as it was a couple of years back. That said, on a relative basis, Nio now looks quite cheap compared to not only U.S.-based peers but also Chinese companies. The stock trades at less than half its expected sales over the next 12 months, while the corresponding numbers for XPEV and LI are 0.70x and 0.63x, respectively. Looking at the U.S.-based rivals, Rivian's (RIVN) next 12-month price-to-sales multiple is 2.29x, and with all its woes, Lucid Group (LCID) trades at 0.78x.

While the Chinese EV industry might remain challenged given the slowdown in the economy and the intense domestic competition, exports are emerging as a key growth driver. Especially as China has been quietly mending relations with other countries, including those that had imposed steep tariffs on imports of Chinese EVs. Overall, I see NIO stock as quite attractive here and am buying the dip in the stock on low valuations and the strength of its brand.

On the date of publication, Mohit Oberoi had a position in: NIO, LI, XPEV, RIVN. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com