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Finance

NIO Stock a Good Investment, Better Bet Than Lucid Motors

To determine whether NIO or LCID is the better EV stock, we need to see the growth prospects, execution potential, and valuation. As far as
the growth potential is concerned, NIO has already shown its commitment to growth through back-to-back delivery records. NIO’s international expansion marks its next step towards growth. Recently, NIO entered into an agreement with JAC to increase the annual capacity to 240,000 cars from 100,000 cars annually. NIO posted gross profits for the first time in 2020. Lucid Motors is still a pre-revenue stage company with a great concept but no vehicles commercially available right now. While Lucid’s forecasts for growth and profitability are encouraging, we should take them with a large grain of salt.

Based on NIO’s enterprise value and analysts’ estimate regarding its 2022 and 2023 revenues, it’s trading at EV-to-revenue multiples
of 8.1x and 6.7x for 2022 and 2023, respectively. Based on Lucid’s EV of $57 billion, its own revenue forecasts for 2022 and 2023 are $2.2 billion and $5.5 billion, respectively. These figures imply EV-to-revenue multiples of 15.5x and 7.8x for 2022 and 2023, respectively. Even before delivering anything to the market, Lucid is trading at a premium multiple to NIO.

NIO has proven itself through continuous execution, while Lucid has yet to pass that test. Based on all the above-mentioned factors, NIO stock seems to be a far better and safer bet compared to LCID.

View more information: https://marketrealist.com/p/is-nio-stock-a-good-investment/

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