What happened

While it may not receive as much media attention as its electrical-vehicle (EV) brethren, Niu Technologies (NIU -13.95%), an electric-scooter manufacturer, grabbed the interest of investors in 2020 and soared 229% higher. Investors may have eased up on the accelerator a little in the first half of 2021, but the stock was still off to a fast start and raced 16% higher, according to data from S&P Global Market Intelligence

In addition to the company reporting higher year-over-year sales volumes and encouraging earnings reports, favorable attention from analysts fueled investors' enthusiasm for the stock through the first half of the year.

A couple at the beach leans against a scooter.

Image source: Getty Images.

So what

Wall Street didn't wait long after the New Year's Eve ball dropped in Times Square before it started revealing its bullish outlook on the stock. On Jan. 15, for example, Needham hiked its price target to $46 from $36, while keeping a buy rating on the stock, according to Thefly.com. Providing a slightly more auspicious take on the stock, Citi raised its price target two months later to $48 from $37 and kept its buy rating on the stock. Similarly, in April, Piper Sandler lifted its price target to $47 from $38 and maintained an overweight rating.

Besides the analysts' interest in the stock, investors took note of the company's success in growing sales of its e-scooters. In January, for example, Niu reported that it had sold 600,892 e-scooters in 2020, compared to 421,326 in 2019.

Three months later, Niu charged up investors' enthusiasm with a Q1 2021 update on e-scooter sales. Niu sold 149,649 e-scooters in the first quarter of 2021, compared to 40,160 units in Q1 2020, which represented year-over-year growth of 273%.

NIU Chart

NIU data by YCharts.

Changing lanes from sales volumes to financials, investors had additional reasons to park Niu in their portfolios. In March, the company reported that it grew revenue 17.7% from 2019 to 2020. More notably, however, the company significantly increased its operating cash flow about 161% from 2019 to 2020. And momentum continued to remain strong when the company released Q1 2021 earnings, as well.

In May, Niu reported Q1 2021 revenue of 547.3 million renminbi, representing a year-over-year increase of 135%. While the company still failed to generate a profit in the quarter, the loss was considerably less than the previous year, narrowing from 26.4 million renminbi in Q1 2020 to 5.4 million renminbi in Q1 2021.

Now what

Although shares of Niu rode higher in the first half of 2021, investors have pumped the brakes on this growth stock and shifted into reverse -- shares are down 14% so far in July. This pullback, however, doesn't reflect any material change to the company's business.

Instead, it's likely that investors are cashing in on the stock's recent rise. This provides investors who have been wary of hitching a ride with the e-scooter manufacturer to hop on at a more reasonable price.