XPEV - XPeng: Sitting On The Fence For Now
2024-03-22 09:20:20 ET
Summary
- XPeng reported strong earnings for Q4'23, beating consensus estimates and showing improving vehicle margins.
- However, the company is still not profitable, and its valuation is not attractive compared to Li Auto, which is still crushing it.
- Li Auto remains my preferred choice in the Chinese EV start-up market due to superior performance and lower valuation.
Chinese electric vehicle manufacturer XPeng ( XPEV ) submitted a strong earnings sheet for the fourth fiscal quarter on Tuesday that saw a significant earnings beat, continual top-line momentum related to EV sales, and an improving trajectory in terms of vehicle margins. However, the company is still not profitable and not expected to be at least for a few more years. While the margin picture clearly improved in Q4'23, I believe XPeng's valuation especially is not attractive enough to justify establishing a long position in this EV maker at the current time. My preference in the Chinese EV start-up market, due to superior performance, better execution, and a lower valuation, remains Li Auto ( LI ) which I believe is still the best deal in the Chinese EV start-up niche that investors can buy!...
XPeng: Sitting On The Fence For Now