Shares of NIO Inc. (NASDAQ:NIO) are soaring Friday after the company alerted the market to its first profitable quarter.
Company To Have First Profitable Quarter
The company is expected to achieve an adjusted profit from operations in the range of approximately $100 million to $172 million for the fourth quarter of 2025, which is defined as profit from operations excluding share-based compensation expenses.
The growth is attributable to sales volume in the fourth quarter of 2025 and “the optimization of vehicle margin driven by a favorable product mix.” In addition, under the GAAP measures, the company is expected to record a profit from operations of approximately $29 million to approximately US$100 million for the fourth quarter of 2025.
While the anticipated revenue surging signals a significant recovery from last year's losses, shares trading at $4.99 —well below the $7 analyst target— reflect a lingering skepticism that must be addressed.
Market Expects Significant Growth This Quarter
The upcoming earnings date is critical for assessing whether Nio’s recent operational successes, particularly a 96% jump in January deliveries driven by the ES8 model, can translate into sustainable financial growth.
- EPS Estimate: $-0.07 (Up from $-0.43 YoY) – EPS expectations of $-0.07 represent a crucial step toward profitability that investors are eager to see materialize.
- Revenue Estimate: $4.77 billion (Up from $2.70 billion YoY) – Revenue of $4.77 billion would validate Nio’s turnaround strategy and its ability to capitalize on growing demand for electric vehicles.
Past Performance Remains A Mixed Bag
The company has beat estimates in 2 of the last 4 quarters, with an average EPS surprise of +10.2%. In the most recent quarter on November 25, 2025, Nio delivered EPS of $-0.15, outperforming the estimate of $-0.24, while revenue came in at $3.06 billion, slightly below the $3.26 billion forecast. This pattern of mixed results, including a notable revenue miss in June 2025, suggests that while Nio is improving, the upcoming earnings report will be closely watched for signs of consistent growth and profitability.
Nio’s Path to Profitability and Market Dynamics
NIO is poised for a significant milestone, expecting its first profitable quarter in Q4 2025, a stark contrast to its performance in 2024. This optimism is bolstered by its exceptional January deliveries, which surged 96%, largely due to the ES8’s dominance. While competitors like Li Auto and XPeng struggle with declining deliveries, NIO’s robust demand underscores its competitive edge and potential for market leadership, setting a positive tone ahead of the earnings report.
However, the electric vehicle (EV) market remains fiercely competitive and unpredictable. Despite NIO’s current strong demand, the broader challenges faced by its rivals highlight the volatile nature of the EV sector.
Wall Street’s Mixed Views on Nio
The stock carries a Hold Rating with an average price target of $7.36. Notable recent moves include:
- Freedom Capital Markets: Upgraded to Buy (Raised Target from $6.50 to $7.00) (Nov 28)
- Barclays: Underweight (Raised Target from $3.00 to $4.00) (Nov 28)
- Citigroup: Buy (Lowered Target from $8.60 to $6.90) (Nov 26)
- Macquarie: Upgraded to Neutral (Lowered Target from $6.70 to $5.30) (Nov 26)
Full analyst coverage indicates a wide divergence in price targets from 50 analysts, reflecting the market’s split view on Nio’s valuation.
Essential Indicators for Nio’s Success
Investors should keep an eye on delivery numbers, particularly for the ES8 model, which has driven recent growth; January’s 96% increase sets a strong precedent. Additionally, monitor the gross margin trends, as improvements here will be essential for validating Nio’s path to profitability amidst rising competition in the EV market.
Nio’s Influence in Key ETFs
- Invesco Golden Dragon China ETF (NASDAQ:PGJ): 3.71% Weight
Significance: Because NIO carries meaningful weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.
Nio’s Stock Sees Positive Momentum
NIO Price Action: Nio shares were up 7.23% at $5.04 at the time of publication on Friday, according to Benzinga Pro data.
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