Nio and Zoom's earnings tell vastly different tales
It is earnings season in the US and two of the biggest stocks of the year delivered reports this week with differing levels of success. Josh Gilbert, an analyst at the multi-asset investment platform eToro, runs the ruler of Zoom and Nio.
Zoom - NASDAQ:ZM
Understandably, Zoom has had a stand-out season with people still stuck at home and reliant on their video services.
Zoom is now the leader in modern enterprise video communications.
Once again (Zoom) delivered an earnings beat with $1.22 per share on revenues of $888.25 million, compared to analyst expectations of profits of 78 cents per share on revenues of $810 million," says
Zoom’s share price has already reacted out of hours, climbing more than 10 per cent.
Zoom has been a huge successor of the global pandemic, gaining recognition for helping individuals, groups and workplaces to stay connected. As a result, this earnings report has signed off with a fiscal year adjusted profit of $995 million.
Cash flow also doesn’t seem to be an issue for Zoom, with the company reporting a 994 per cent year-over-year increase in operating cash flow. Zoom will be focused on increasing security measures over the next quarter, as this seems to be its biggest downfall at present.
Zoom’s guidance for the fiscal Q1 2021, demonstrates that the company is still expected to see its huge growth continue. Revenue outlook has been pegged at around $900 million, above Wall Street expectations and proving that Zoom still may have significant room to flourish and grow.
However, with the pandemic starting to ease in many western countries and a return to offices in sight for many this year, what will be in Zoom’s product roadmap to keep fuelling demand beyond lockdown?
Nio - NYSE: NIO
In today’s Q4 earnings report, Nio smashed through analyst revenue expectations of $742 million, to instead turn out $1.02 billion in revenues.
Figures from January and February 2021 sales were particularly positive for Nio, showing 352 per cent and 689 per cent increases in sales year-over-year.
However, share price has already fallen by 6 per cent out of hours, as investors were disappointed with Nio reporting a larger than anticipated loss of $0.14 per share.
Gross margins increased to 17.2 per cent up from 12.9 per cent, which means that higher vehicle deliveries will be key to ensuring that the company can turn a notable profit in the future.
The earnings report depicts a positive cash flow for Nio, which climbed to $6.5 billion up from $3.3 billion in Q3.
Production increases are key for Nio, as this will move towards further deliveries. Its strong balance sheet will certainly help this key metric in 2021.
Moving forward, Nios 2021’s growth will likely depend on government policies in China, as well as its planned expansion into Europe through the year.
Will Nio continue to nip at Tesla’s heels in 2021? Or will it run out of energy?