XPeng (NYSE: XPEV) has outperformed NIO (NYSE: NIO) over the last three months, bringing cutting edge-driver assisted technology to the Chinese EV market.
The company, currently undervalued according to analysts, has been reporting record revenues and vehicle deliveries. I rate XPeng as bullish and assume higher valuations for the company as it continues to meet a high demand EV market.
Q3 2021 Performance
XPeng delivered 25,666 smart vehicles during Q3, representing a 199.2% increase compared to last year’s same quarter, and 47.5% increase from last quarter. The company reported revenues of $887.7 million, representing an 187.4% increase compared to last year’s same quarter and 52.3% increase from last quarter.
The company reported a net loss of $247.5 million. Cash and short-term investments totaled $7.039 billion.
The company estimates Q4 revenues to be around $1.1 billion and deliveries to be between 24,500 and 36,500 vehicles. The company reported October deliveries of 10,138 vehicles and November deliveries of 15,613. It is on track to fulfill its delivery and revenue estimates for Q4 2021.
XPeng’s Operations and Advanced Technology
The company has a full line of smart EVs, including sedans and SUVs. XPeng launched its newest model, the G9, in November. The smart EV features an updated driver assist program called XPILOT 4.0, which updates the older XPILOT 3.5.
The company manufactures its smart EVs in Zhaoqing within the Guangdong province. XPeng has 271 stores covering 95 cities and 439 branded charging stations covering 121 cities. The company has recently introduced discounted charging packages for its customers.
XPeng’s smart EVs are not the top performers in terms of distance driven per battery charge, but they beat the rest of the competitors with their auto assist driving technology.
The company’s XPILOT driver assistance system features autonomous driving level 4 and has a displayable tracking system which graphically shows all other cars and events occurring outside of the vehicle. The driver simply monitors the steering wheel and tracking system.
The company’s G9 model features its newest driver assistance technology. The computer system is capable of running over 500 trillion operations per second.
XPeng is also developing a self-driving taxi which it will introduce as China law allows. The company is well known for its advanced technology and conducts research on low-altitude flying vehicles.
Its affiliate, HT Aero, is in the process of being funded for research and product design of low-flying vehicles.
Wall Street’s Take
According to Wall Street, XPeng has a Strong Buy consensus rating, based on five Buys assigned in the past three months. The average Xpeng price target is $62.95, which implies 43.2% upside potential.
Conclusion
XPeng is strong player in the Chinese EV market with its advanced driver assist technology and strong financial performance. The company is undervalued and has outperformed other EV stocks.
XPeng expects continued revenue growth and higher vehicle deliveries. The company’s line of smart EVs are in high demand and the company has been able to deliver, despite the silicon chip shortage occurring in the industry.
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Disclosure: At the time of publication, Alan Sumler was long Li Auto.
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