Li Auto Inc. ($LI) Earnings (Q2 FY22)

 Li Auto Inc. ($LI) Earnings and Opinion:

Li Auto is a company in the Consumer Cyclical sector and operates in the Auto Manufacturers industry. The company designs, develops, manufactures, and sells new energy vehicles in China. Li Auto was founded in 2015 and is headquartered in Beijing, China. The company made its debut to the stock market in 2020.

Li Auto Earnings Results:

  • Revenues of $8.73B beating expectations of $7.99B
  • Gross Profit of $1.88B beating expectations of $1.68B
  • Adjusted EPS of -$0.08 beating expectations of -$0.19
  • Guided revenues for Q3 of $9.26B missing expectations of $13.98B
  • Guided deliveries for Q3 of 28,000 missing expectations of 39,000
Opinion:
Li Auto is currently moving a slight bit higher after reporting earnings before the markets opened this morning. The stock has done a solid job of outperforming the market after the recent downturn. Li Auto has been very productive in becoming a rising auto maker in China. The company is starting to bring in some solid revenues and the shift now seems to be to retention and profitability. Looking at the earnings results, the current quarter saw some solid beats against expectations. However, the guidance for next quarter seemed to disappoint. This is probably due to rising costs and hardships in getting products for manufacturing. It seems the Gross Profit margin is pretty slim which is due to the cost of goods sold being a big portion of revenues. The margin will start to widen when supply chain woes go away and production becomes more efficient and less costly. For valuation, we can see that the company reported a loss this past quarter. This means they currently don't have a P/E ratio metric, but P/S seems to be at a low value. The thing that sticks out to me, has to be the annual revenue growth, it seems to be growing at a solid number right now. As far as debt goes, the current ratio sits way above where it needs to be, and the cash the company holds is an absurd amount. I'm a little skeptical when it comes to buying the stock though, I feel like China is going through a lot of regulation right now in its economy. This causes some concern for auto makers like Li Auto. I will look for profitability from this company and also want to see some expansion to expand the market and not be focused solely on the Chinese market.


*Information from Yahoo Finance, Consensus Guru, CMLVIZ 

Comments

Post a Comment

Popular posts from this blog

Weekly Earnings Review: September 25, 2023- September 29, 2023

     It was a nice little break in the earnings report, but just like that we are back! We are slowly easing our way back into earnings season. However, this week marked the end of Q3 and September. September was a downturn from the rally we saw earlier in the year. There is a lot of stuff looming as the government is set to shut down on October 1st. The Fed is keeping a close eye on inflation but this weeks prints showed some signs of improvement. The average consumer is struggling as savings keep dwindling. In terms of our earnings, we just had two companies that reported this week. One is a warehouse style retailer and the other is a wide range consulting firm.  Tuesday, September 26, 2023 Costco Wholesale Corporation (COST)-     Costco beat expectations on both the top and bottom line. The stock saw a decline after the initial earnings report, but by the end of the week it has hit a new 52-week high. The revenue growth was impressive as it grew by a hair under 10%. The COGS growth
Read more

Weekly Earnings Review: October 16, 2023- October 20, 2023

      Well earnings season is finally among us, so we will start producing more beefier blog posts and cover a lot more companies over these next few weeks. I had one company report last week that I decided to throw into this weeks post, because I felt that it was pointless to make a post with just one boring company. With the inclusion of that company, we will cover 7 companies that report earnings this week and will give your our thoughts and opinions on how they performed during the quarter and the outlook. There is a lot of controversy going on with a war breaking out in Israel and the House of Representatives with out a speaker. This year seems to be the year of how geopolitics affect the market. There seems to be a lot of confusion with the outlook of the market right now, but inflation numbers still look to be fair and the earnings of major companies will be able to tell us a little bit more about where this is headed.  Thursday, October 12, 2023 Walgreens Boots Alliance (WBA)-
Read more

Weekly Earnings Review: November 27, 2023- December 1, 2023

Image
     Stocks continue to rise as we enter the final month of trading for the year. The S&P 500 and Nasdaq had another stellar month. Bond yields continue to fall, as interest rates have seemed to reach their peak. Estimates are all over the place when it comes to when cutting will start and how many cuts we will see next year. I added a new mantra to particular companies. I want to add some visual pieces to the post to entice the readers. Hope you guys enjoy the visuals and the excerpts. Stay investing! Monday, November 27, 2023 Zscaler (ZS)-      Zscaler continues to carry its momentum, as the company beat on both the top and bottom lines. The company achieved 40% growth on the top line and saw impressive growth on the bottom line as well. Management raised guidance and are expecting around 30% growth on both the top and bottom line. What is so impressive about this company is that they are achieving high growth and high profitability. This is a feat that a lot of software companie
Read more