Xiaomi (SEHK:1810) has edged higher in recent trading, catching the attention of investors wondering what might be fueling the move. With a 2.6% rise in the past day and nearly 10% added over the past month, the company’s stock is turning heads in a market where tech sentiment can shift rapidly. The recent performance comes without a headline-making event. It may point to shifting investor confidence, new perspectives on Xiaomi’s future, or simply traders repositioning after a year of dramatic market moves.
Looking at the bigger picture, Xiaomi has more than doubled over the past year, surging 201%. The company has also notched an impressive 652% year-to-date run, though the three-year and five-year returns of 420% and 151% show that longer-term holders have also been rewarded. Still, with momentum building this year and earnings growth in the double digits, the story seems to be less about any single trigger and more about sustained investor interest in the business and its prospects.
After such a strong rally, the real question for investors now is whether Xiaomi’s recent price is an opportunity to buy in at a fair value or if future growth is already baked into the stock price.
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Most Popular Narrative: 8% Overvalued
According to Panayiotis, Xiaomi is seen as overvalued based on this popular narrative, with its current share price trading above the calculated fair value.
"Xiaomi’s revenue could realistically reach $80 to $100B by 2028, driven by:
• EV success (the biggest swing factor).
• IoT/services monetization (high-margin growth).
• Premium smartphone adoption offsetting market saturation.
Its ability to pivot from a hardware vendor to an integrated tech ecosystem (phones + AI + EVs) will determine if it joins the $100B revenue club. Watch for EV progress in 2024 to 2025 and margin trends in services."
Want to discover the strategy fueling this bold valuation? The narrative hints at powerful profit engines and a daring leap into new markets. Think record growth rates, margin improvements, and a valuation usually reserved for elite tech. What are the growth levers hidden in the full forecast? There is one stand-out factor driving their future revenue, and you may not guess what it is.
However, EV market uncertainty and ongoing margin pressure could quickly shift expectations and challenge the optimistic outlook for Xiaomi’s growth story.
Another View: Our DCF Model Challenges Market Optimism
Taking a step back, the SWS DCF model tells a different story. This cash flow approach points to Xiaomi being overvalued, which contrasts with the optimism seen in growth-focused forecasts. Which method will ultimately prove right?
If you have a different take or want to dig into the details on your own terms, you can put together your own Xiaomi outlook in just a few minutes. Do it your way.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.
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Kshitija (or Keisha) Bhandaru is an Equity Analyst at Simply Wall St and has over 6 years of experience in the finance industry and describes herself as a lifelong learner driven by her intellectual curiosity. She previously worked with Market Realist for 5 years as an Equity Analyst.
