Rebounding from a 7% drop in September, shares of Niu Technologies (NASDAQ:NIU) climbed 37%, according to data from S&P Global Market Intelligence. In addition to the company’s reporting of third-quarter sales, investors were motivated to pick up shares of the Chinese electric-scooter manufacturer after Wall Street shared a favorable outlook on the stock.
While the impact of COVID-19 acutely affected Niu’s first-quarter scooter sales, the company recovered in the second quarter, reporting year-over-year growth in scooters sold of 81% in China, though international sales shrank 62%.
To the delight of shareholders, however, the company reported Q3 year-over-year scooter sales growth in both China and international markets, 70% and 6%, respectively. Although the company credited the rising sales in international markets to “demand recovery in July and August after the severe impact from COVID-19 in the second quarter,” management attributed growth in China to the introduction of new e-bicycle models: GO, MQi2, and MQiS.
Investors also responded to Wall Street’s optimistic outlook on the stock last month. Maintaining an overweight rating on the stocks, Alexander Potter, an analyst at Piper Sandler, raised his price target to $31 from $25, according to Thefly.com. The bullish take on the stock was a welcome sign for investors, since Citi had downgraded the stock to “neutral” from “buy,” with a price target of $23.50.
While Niu notched a big win with investors in selling more scooters in the third quarter, it’s unclear how this affected the company’s financials; therefore, investors will want to pay close attention to the company’s Q3 earnings report later this month. In addition, the company acknowledged that while sales bounced back in the third quarter, the resurgence of COVID-19 negatively affected sales in September. Moreover, with the resurgence of COVID cases in Europe and the U.S., investors should prepare for fourth-quarter sales volume to also take a hit.