Xiaomi (SEHK:1810) shares have shown uneven movement recently. The stock posted a nearly 20% drop in the past month, but is up over 55% year over year. Investors are watching closely to see how market sentiment develops.
After such a sharp rally over the past year, Xiaomi’s recent 1-month share price decline has caught attention, yet the company’s stellar 56.96% total shareholder return over 12 months shows that momentum has not disappeared; it has just shifted pace. While there is clear volatility in the short term, Xiaomi’s longer-term returns and profit growth suggest some investors are still betting on its story.
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With Xiaomi’s strong annual gains and recent correction, the question is whether today’s prices reflect lingering value or if the market has already factored in expectations for future growth. Is there still a buying opportunity here?
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Most Popular Narrative: 33.2% Undervalued
Xiaomi's consensus fair value sits significantly above the last close, suggesting notable upside from current levels. This perspective is based on robust growth expectations for both the company’s revenue and margins.
"Accelerated R&D investments in core areas like AI, chips, smart EVs, and connected hardware enable differentiated offerings and ecosystem lock-in. This allows Xiaomi to ride the trend of AI-hardware-software convergence. Over time, these capabilities should expand higher-margin services and recurring revenue, boosting earnings resilience."
Curious which bold moves underpin this valuation? One forecast stands out: future growth and profitability expectations that rival some of the industry’s biggest names. Want to see the full analyst playbook and uncover the surprising assumptions driving Xiaomi’s potential? Find out what could really send shares higher.
However, stalled smartphone demand or a tougher international landscape could undermine Xiaomi’s growth story and put pressure on long-term margins and profitability.
Looking at valuation through earnings ratios, Xiaomi trades at 27.8 times earnings, making it pricier than both its Asian Tech industry average of 23.3x and its peers’ 19.6x. The fair ratio is 23.9x, which suggests the market could become more cautious if expectations change. Is the recent optimism a bit too much?
If you have a different perspective or want to dig into the numbers yourself, shaping your own Xiaomi outlook takes just a few minutes. Go ahead and 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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