LI - Li Auto: Deep Value For EV Investors

2024-05-28 12:52:44 ET

Summary

• Li Auto missed Q1 expectations on the bottom and top line last week.
• Vehicle margins declined Q/Q, but the EV company remained profitable.
• Li Auto continued to lead the start-up sector in terms of vehicle and gross margins.
• The EV maker offers the best value in the Chinese electric vehicle start-up group with leading delivery volumes and margins/profitability.

Li Auto ( LI ) delivered a mixed earnings sheet for the first fiscal quarter last week, but the EV company nonetheless saw strong delivery and top line growth. While Li Auto missed top and bottom line estimates, the electric vehicle maker also saw a sequential decline in its vehicle margins, which I believe is the single most important metric for Chinese electric vehicle start-ups right now. Even under consideration of a sequential contraction in vehicle margins, I believe Li Auto still represents the best value for long term EV investors as the company continues to outclass its competition in terms of delivery growth and is already profitable on a net income basis!...

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