Financial Analysis: Lotus Technology (NASDAQ:LOT) vs. NIO (NYSE:NIO)

Lotus Technology (NASDAQ:LOT) and NIO (NYSE:NIO) are both auto/tires/trucks companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, risk, analyst recommendations, earnings and profitability.

Insider & Institutional Ownership

63.4% of Lotus Technology shares are held by institutional investors. Comparatively, 48.5% of NIO shares are held by institutional investors. 0.2% of Lotus Technology shares are held by company insiders. Comparatively, 1.0% of NIO shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Lotus Technology and NIO”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lotus Technology	$1.01 billion	0.79	-$742.00 million	($1.56)	-0.76
NIO	$65.73 billion	0.11	-$2.94 billion	($1.53)	-2.29

Lotus Technology has higher earnings, but lower revenue than NIO. NIO is trading at a lower price-to-earnings ratio than Lotus Technology, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Lotus Technology and NIO’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lotus Technology	-87.61%	N/A	-38.53%
NIO	-33.41%	-113.83%	-19.82%

Analyst Ratings

This is a summary of recent ratings for Lotus Technology and NIO, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lotus Technology	0	1	0	0	2.00
NIO	1	8	1	1	2.18

Lotus Technology presently has a consensus price target of $7.00, indicating a potential upside of 493.22%. NIO has a consensus price target of $5.05, indicating a potential upside of 44.37%. Given Lotus Technology’s higher probable upside, analysts plainly believe Lotus Technology is more favorable than NIO.

Volatility and Risk

Lotus Technology has a beta of 0.28, meaning that its share price is 72% less volatile than the S&P 500. Comparatively, NIO has a beta of 1.74, meaning that its share price is 74% more volatile than the S&P 500.

Summary

NIO beats Lotus Technology on 9 of the 15 factors compared between the two stocks.

About Lotus Technology

Lotus Technology Inc. engages in the design, development, and sale of battery electric lifestyle vehicles worldwide. It also distributes sports cars. The company sells its products under the Lotus brand. Lotus Technology Inc. is based in Shanghai, China.

About NIO

NIO Inc. designs, manufactures, and sells electric vehicles in the People's Republic of China. The company is also involved in the manufacture of e-powertrain, battery packs, and components; and racing management, technology development, and sales and after-sales management activities. In addition, it offers power solutions for battery charging needs; and other value-added services. The company was formerly known as NextEV Inc. and changed its name to NIO Inc. in July 2017. NIO Inc. was founded in 2014 and is headquartered in Shanghai, the People's Republic of China.