Li Auto (LI) AI Stock Analysis

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Li Auto

(NASDAQ:LI)

Rating:81Outperform

Price Target:

$33.00

▲(16.44%Upside)

Li Auto's stock is rated favorably due to its strong financial performance and positive technical indicators. The company's strategic focus on growth and innovation, alongside a stable balance sheet, positions it well for future success. Valuation and earnings call sentiment highlight some challenges but are outweighed by the company's growth potential.

Positive Factors

Financial performance

Gross margin improved to 20.5% and vehicle margin was 19.8% this quarter, with improvements primarily due to cost reduction.

Product expansion

Li Auto plans to launch i8 in July and i6 in September, which is expected to enhance its presence in the RMB200k+ BEV market in China.

Sales growth

The revamped Li Mega has a strong order backlog and is ramping up production capacity.

Negative Factors

Incentive strategy

Li Auto had narrowed its purchase incentives for the L6 and Mega.

Model strategy

Li Auto is trying to extend its current aging model cycle solely by updating the ADAS system, which is seen as a challenging and unconventional move.

Li Auto (LI) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$28.71B

Dividend YieldN/A

Average Volume (3M)3.53M

Price to Earnings (P/E)26.8

Beta (1Y)0.86

Revenue Growth10.28%

EPS Growth-29.75%

CountryUS

Employees32,248

SectorConsumer Cyclical

Sector Strength77

IndustryAuto - Manufacturers

Share Statistics

EPS (TTM)0.34

Shares Outstanding892,535,100

10 Day Avg. Volume3,808,825

30 Day Avg. Volume3,528,025

Financial Highlights & Ratios

PEG Ratio2.00

Price to Book (P/B)1.45

Price to Sales (P/S)0.00

P/FCF Ratio9.50

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$33.22

Price Target Upside17.22% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering11

Li Auto Business Overview & Revenue Model

Company DescriptionLi Auto Inc. (LI) is a Chinese electric vehicle manufacturer that focuses on the design, development, manufacturing, and sale of smart electric vehicles. Founded in 2015 and headquartered in Beijing, China, the company primarily operates in the automotive sector with a focus on sustainable mobility solutions. Li Auto is known for its extended-range electric vehicles (EREVs), which integrate both electric and internal combustion engine technologies to enhance driving range and efficiency. The company's flagship model, the Li ONE, combines advanced technology features with innovative design, catering to the growing demand for eco-friendly transportation in China.

How the Company Makes MoneyLi Auto generates revenue primarily through the sale of its electric vehicles, particularly its flagship model, the Li ONE. The company's revenue model centers on the direct sale of vehicles to consumers, emphasizing advanced features and performance to capture a significant share of the Chinese electric vehicle market. Additionally, Li Auto benefits from government incentives and subsidies for electric vehicles, which can enhance the affordability and attractiveness of its products to consumers. The company may also explore additional revenue streams through after-sales services, including maintenance and software upgrades, which can provide ongoing income and strengthen customer relationships. Significant partnerships with technology firms and suppliers contribute to the development and production efficiencies that support Li Auto's revenue growth.

Li Auto Key Performance Indicators (KPIs)

Any

Deliveries

Deliveries
Tracks the number of vehicles delivered to customers, indicating sales performance, production capacity, and market demand for Li Auto's models.

Chart InsightsLi Auto's vehicle deliveries have shown robust growth, with a notable increase in the third and fourth quarters of 2024. Despite a seasonal dip in Q1 2025, the company achieved a 15.5% year-over-year increase. The earnings call highlights strong market leadership and product innovation, with new models driving demand. However, quarter-over-quarter declines in revenue and deliveries, attributed to seasonal factors, suggest potential volatility. The expansion of the supercharging network and upcoming BEV models are strategic moves to sustain growth and market competitiveness.

Data provided by:

Main Street Data

Li Auto Earnings Call Summary

Earnings Call Date:May 29, 2025

(Q1-2025)

% Change Since: 1.58%|

Next Earnings Date:Sep 02, 2025

Earnings Call Sentiment Neutral

Li Auto demonstrated strong year-over-year growth in vehicle deliveries and maintained a leading market position. Despite quarter-over-quarter declines in revenue and deliveries due to seasonal factors, the company showed resilience with ongoing product innovations and network expansions, offsetting some challenges. The sentiment is balanced with both positive achievements and notable challenges.

Q1-2025 Updates

Positive Updates

Strong Vehicle Deliveries

Li Auto delivered over 92,000 vehicles in the first quarter of 2025, marking an increase of 15.5% year-over-year. The company maintained a strong market presence with a 14.1% share in April.

Revenue and Market Leadership

The company achieved total revenues of RMB25.9 billion, with significant growth in the RMB200,000 and above NEV market in China, growing at twice the market rate.

Product Innovation and Launch

Launch of new models like Li MEGA Home and new Li L Series, featuring advanced technologies such as NVIDIA's Thor-U chip and ATL LiDAR sensors. Li MEGA Home accounted for over 90% of orders with a strong backlog.

Supercharging Network Expansion

Li Auto operates 2,350 supercharging stations and plans to increase this to 4,000 by the end of the year, covering extensive urban and highway networks.

Net Income Growth

Net income for the quarter was RMB646.6 million, up 9.4% year-over-year, despite a quarter-over-quarter decrease.

Negative Updates

Quarter-over-Quarter Revenue Decline

Total revenue decreased by 41.4% quarter-over-quarter, affected by seasonal factors related to the Chinese New Year holiday.

Decrease in Vehicle Deliveries

Vehicle sales revenue decreased by 22.1% quarter-over-quarter, primarily due to a decrease in vehicle delivery.

Operating Margin Decrease

Operating margin was 1.0% in the first quarter, down from 8.4% in the prior quarter, despite an improvement from the negative margin in the same period last year.

Negative Free Cash Flow

Free cash flow was negative RMB2.5 billion in the first quarter, although this was an improvement from the same period last year.

Company Guidance

During the first quarter of 2025, Li Auto delivered over 92,000 vehicles, marking a 15.5% year-over-year increase, and reported total revenues of RMB 25.9 billion. The company achieved a market-leading 14.1% market share in the RMB 200,000 and above NEV segment in China as of April. Li Auto's gross profit for the quarter was RMB 5.3 billion, with a gross margin of 20.5%. Vehicle deliveries for the second quarter are expected to be between 123,000 and 128,000 units, with anticipated revenues ranging from RMB 32.5 billion to RMB 33.8 billion, reflecting a 2.5% to 6.7% year-over-year increase. The company has also expanded its supercharging network to 2,350 stations and plans to grow this to 4,000 stations by the end of the year, supporting the upcoming launch of BEV models.

Li Auto Financial Statement Overview

Summary

Li Auto's financial performance is impressive with solid revenue growth, profitability improvements, and robust cash flow generation. The income statement shows significant revenue growth and improved margins, while the balance sheet reflects financial stability and a healthy equity ratio. Cash flow analysis indicates strong cash generation capabilities, supporting sustainable growth and financial flexibility.

Income Statement

Very Positive

Li Auto has demonstrated significant revenue growth with a remarkable increase in total revenue from 2019 to 2024. The gross profit margin has consistently improved, indicating effective cost management. The company transitioned from negative to positive net income since 2023, enhancing its net profit margin. EBIT and EBITDA margins have also shown substantial improvement, showcasing better operational efficiency and profitability.

Balance Sheet

Very Positive

The balance sheet reflects strong equity growth and a healthy equity ratio, highlighting financial stability. The debt-to-equity ratio is manageable, indicating prudent leverage. The return on equity has turned positive, driven by improved profitability. Overall, the balance sheet presents a solid financial footing with increasing asset base and equity.

Cash Flow

Very Positive

Li Auto has shown robust growth in free cash flow, demonstrating effective cash generation capabilities. The operating cash flow to net income ratio is strong, indicating efficient conversion of income to cash. The company has maintained a positive free cash flow to net income ratio, supporting sustainable growth and financial flexibility.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
144.46B	123.85B	45.29B	27.01B	9.46B
	Gross Profit
29.66B	27.50B	8.79B	5.76B	1.55B
	EBIT
7.02B	7.41B	-3.65B	-1.02B	-669.34M
	EBITDA
8.82B	9.21B	-2.05B	500.83M	199.03M
	Net Income Common Stockholders
8.03B	11.70B	-2.03B	-321.45M	-166.03M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
112.81B	103.26B	56.51B	47.52B	28.64B
	Total Assets
162.35B	143.47B	86.54B	61.85B	36.37B
	Total Debt
16.34B	13.55B	12.26B	7.84B	2.11B
	Net Debt
-49.56B	-77.78B	-26.21B	-20.01B	-6.82B
	Total Liabilities
91.03B	82.89B	41.35B	20.78B	6.57B
	Stockholders Equity
70.87B	60.14B	44.86B	41.06B	29.80B
Cash Flow		Free Cash Flow
8.20B	44.19B	2.25B	4.90B	2.46B
	Operating Cash Flow
15.93B	50.69B	7.38B	8.34B	3.14B
	Investing Cash Flow
-41.14B	-12.07M	-4.36B	-4.26B	-18.74B
	Financing Cash Flow
-415.65M	185.38M	5.64B	16.71B	24.71B

Li Auto Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price28.34

Price Trends

50DMA

25.61

Positive

100DMA

25.71

Positive

200DMA

24.58

Positive

Market Momentum

MACD

0.80

Positive

RSI

54.29

Neutral

STOCH

26.96

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LI, the sentiment is Neutral. The current price of 28.34 is above the 20-day moving average (MA) of 27.88, above the 50-day MA of 25.61, and above the 200-day MA of 24.58, indicating a neutral trend. The MACD of 0.80 indicates Positive momentum. The RSI at 54.29 is Neutral, neither overbought nor oversold. The STOCH value of 26.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LI.

Li Auto Risk Analysis

Li Auto disclosed 108 risk factors in its most recent earnings report. Li Auto reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Li Auto Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LI	81 Outperform	$28.71B	26.84	12.22%	―	10.28%	-29.75%
Sector *	62 Neutral	$6.90B	11.12	2.92%	3.89%	2.68%	-25.06%
RIVN	56 Neutral	$16.16B	―	-53.82%	―	0.58%	35.39%
XPEV	55 Neutral	$18.51B	―	-15.52%	―	50.45%	49.81%
NIO	48 Neutral	$7.28B	―	-142.49%	―	16.99%	12.99%
VFS	44 Neutral	$7.72B	―	36.15%	―	139.64%	-159.15%
LCID	41 Neutral	$6.80B	―	-50.06%	―	40.67%	3.40%

* Consumer Cyclical Sector Average

Performance Comparison

Li Auto

27.82

7.78

38.82%

NIO

Nio

3.52

-1.69

-32.44%

XPEV

XPeng, Inc. ADR

19.26

11.16

137.78%

LCID

Lucid Group

2.20

-0.65

-22.81%

VFS

VinFast Auto

3.30

-1.30

-28.26%

RIVN

Rivian Automotive

14.10

2.88

25.67%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.