Li Auto’s Stock Slides Following Disappointing Earnings and Outlook
Li Auto Inc (NASDAQ:LI) shares plummeted on Monday after the company reported disappointing Q4 earnings and a lackluster Q1 2025 outlook. The stock fell by 7% in Hong Kong, notably trailing behind the Hang Seng Index’s rise of 1%. This followed a 4.3% decline in its U.S.-listed shares on Friday.
Highlights from Li Autoโs Financial Report
- Q4 Revenue: Recorded a substantial 44.3 billion yuan (~$6.1 billion), indicating strong growth.
- Q4 Earnings per Share (EPS): Reported at 10.04 yuan, down from previous levels, signaling squeezed profit margins.
- Q1 2025 Revenue Outlook: Projected between 23.4 billion yuan and 24.7 billion yuan (~$3.2 billion to $3.4 billion), which significantly underperforms analyst expectations of 33.5 billion yuan.
Market Reaction
- Li Auto’s Stock: Experienced a drop of 7% in Hong Kong and a 4.3% decrease in U.S. trading.
- Competitors: Meanwhile, shares of rival EV manufacturers like BYD, NIO, and Xpeng surged by as much as 3.7%.
Analysts and Investor Reactions
- Analysts’ Ratings: Macquarie downgraded Li Auto from Outperform to Neutral, citing concerns over its capacity to generate consistent earnings growth amidst escalating competition.
- Nomura also downgraded its rating from Buy to Neutral, expressing caution given Liโs lower outlook and impending product launches from competitors.
Competitive Landscape and Future Models
- Li Auto plans to introduce two new all-electric SUVs, the Li i8 and Li i6, by late 2025.
- Although the company has seen impressive sales growth, price wars within the Chinese EV market have pressured profit margins.
Conclusion
Li Auto’s disappointing financial outlook and analyst downgrades underscore concerns regarding its ability to maintain growth in a competitive landscape. Investors should keep a keen eye on the upcoming product launches, which could play a critical role in the companyโs recovery.