Xiaomi (SEHK:1810): Assessing Valuation After Recent Cooling in Share Price

Xiaomi (SEHK:1810) shares have come under pressure recently, slipping around 2% today and extending their slide over the past month. Investors are closely watching for signs of stability or a shift in sentiment as the stock retraces from earlier gains.

See our latest analysis for Xiaomi.

After rallying earlier in the year, Xiaomi’s share price has cooled recently, with momentum fading a bit in the short term. Still, its one-year total shareholder return stands at an impressive 119.16 percent, showing strong long-term gains despite recent pullbacks.

If you’re looking to widen your search after Xiaomi’s run, now is a great moment to explore fast growing stocks with high insider ownership

With Xiaomi’s shares cooling after a stellar one-year run, the key question now is whether investors are overlooking further upside or if the market already reflects all of the future growth potential. Is there more value to unlock, or is everything priced in?

Most Popular Narrative: 21.1% Undervalued

Xiaomi's latest closing price of HK$52.05 sits well below the narrative’s fair value estimate of HK$66.01, indicating meaningful upside if assumptions hold. With this gap, the valuation hinges on Xiaomi’s drive into new tech sectors and bolder earnings forecasts.

The company's successful push into premiumization, evidenced by growing sales of high-end smartphones, appliances, and electric vehicles, along with the launch of proprietary 3nm chips and advanced AI features, supports higher average selling prices and improves net margins as Xiaomi captures greater value per customer.

Read the complete narrative.

Want to know what’s fueling this ambitious price target? This narrative is built on Xiaomi pivoting to high-end markets, launching daring tech, and projecting earnings trends that only top-tier innovators achieve. The secret sauce? You’ll have to read the full story for these growth projections and future profit multiples, which might surprise you.

Result: Fair Value of $66.01 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, slowing global smartphone growth and fierce competition could limit Xiaomi’s pricing power and weigh on margins. This may test the bullish narrative’s assumptions.

Find out about the key risks to this Xiaomi narrative.

Another View: Valuing by Earnings Multiples

While the fair value narrative leans optimistic, a look at Xiaomi’s price-to-earnings ratio gives a more cautious picture. At 33.3x, it is well above both the Asian tech industry average of 23.9x and the peer average of 21x. The fair ratio, based on fundamentals, sits at 26.4x, which highlights meaningful valuation risk if growth wobbles. Should investors be worried that Xiaomi’s premium is too steep?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Xiaomi Narrative

If you have a different take on Xiaomi’s outlook or want to dig deeper into the numbers yourself, you can craft your own perspective in just a few minutes, so why not Do it your way?

A great starting point for your Xiaomi research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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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