Is Nio stock set for $2 after disappointing Q1 results?

Core Viewpoint - Nio's Q1 2025 earnings report missed analyst expectations, leading to a decline in stock price and raising concerns about future performance [1][5]. Financial Performance - Nio reported Q1 2025 revenue of $1.66 billion, a 21.5% increase from $1.37 billion in the same quarter last year, driven by an 18.6% rise in vehicle sales and a 37.2% increase in other revenue streams [3]. - The revenue fell short of the consensus estimate of $1.73 billion by approximately 4% [3]. - The company posted an adjusted loss per share of $0.41, wider than the expected loss of $0.35, representing a 24.2% year-over-year decline [4]. Future Outlook - Nio provided a positive Q2 2025 outlook, projecting vehicle deliveries between 72,000 and 75,000 units, which represents a year-over-year increase of 25.5% to 30.7% [4]. - Analysts remain optimistic, with a consensus price target of $5.07 for Nio over the next 12 months, indicating nearly 50% upside from current levels [6]. - Morgan Stanley reaffirmed its 'Overweight' rating on Nio, maintaining a price target of $5.90, citing optimism around Q2 volume recovery and improving cash flow [8]. Market Dynamics - Morgan Stanley anticipates a 20% average selling price (ASP) decline through 2025, partially offset by rising sales of the lower-cost Firefly model [9]. - The positive outlook is contingent on Nio's ability to meet Q2 delivery goals and enhance operational efficiency in a challenging EV market [10].