NIO (NIO) just reported July delivery figures that caught market attention, with 35,934 vehicles delivered for the month and 227,057 year to date, alongside the launch of the All-New ES8 Five-Seat Version.

NIO’s July delivery update comes after a mixed price stretch, with the share price at US$4.81 and a 7-day share price return of 2.78%, while the 90-day share price return has declined 18.47%. Over a longer horizon, the 1-year total shareholder return of 6.89% contrasts with a 3-year total shareholder return that has declined 65.81%. This suggests recent momentum is tentative after heavy longer term losses.

If NIO’s latest delivery numbers have you thinking about where growth stories could emerge next, it might be worth scanning 36 robotics and automation stocks.

NIO’s shares are still trading near multi year lows despite stronger July deliveries and a modest 1 year gain. Does that tilt the risk reward toward buyers, or does it indicate that the market remains wary of the stock’s valuation?

Most Popular NIO Narrative: 34.2% Undervalued

The most followed valuation narrative for NIO puts fair value at about $7.31 per share compared with the recent close of $4.81. That gap rests on some punchy assumptions about future growth and profitability.

Analysts are assuming NIO's revenue will grow by 20.3% annually over the next 3 years.

Analysts assume that profit margins will increase from -9.1% today to 2.5% in 3 years time.

Want to understand why this narrative treats NIO more like a high growth compounder rather than a challenged automaker? The story leans heavily on sustained double digit revenue gains, a swing into lasting profitability and a richer future earnings multiple than many traditional car stocks. The full narrative spells out how those ingredients combine to support that higher fair value.

Result: Fair Value of $7.31 (UNDERVALUED)

However, NIO’s story can shift quickly if competition in China leads to increased price pressure or if ongoing regulatory and geopolitical questions begin to weigh on sentiment.

Another View On NIO’s Valuation

While the analyst narrative points to NIO being undervalued at a fair value of about $7.31 per share, the Simply Wall St DCF model paints a more cautious picture. At a current price of $4.81, the stock sits slightly above an estimated future cash flow value of $4.64. Which version of “fair” do you find more persuasive?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out NIO for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 54 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With sentiment on NIO still split, this is a good moment to look at the data first hand and decide where you stand. To see exactly what investors view as the key upside for the stock, review the 1 key reward

Looking for more ideas beyond NIO?

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• Target higher quality potential bargains by scanning companies on the 54 high quality undervalued stocks that combine solid fundamentals with prices that may not fully reflect their strengths.
• Strengthen the defensive side of your portfolio by reviewing the 79 resilient stocks with low risk scores that prioritises resilient balance sheets and lower overall risk scores.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.