Li Auto (NasdaqGS:LI): Assessing Valuation Following Revenue Guidance and Analyst Downgrades

Li Auto (NasdaqGS:LI) has caught investor attention after releasing October delivery numbers and issuing quarterly guidance that points to revenue declines compared to last year. The company delivered 31,767 vehicles in October, bringing cumulative deliveries to nearly 1.5 million.

See our latest analysis for Li Auto.

Li Auto’s share price has struggled over the past year, reflecting a fading momentum as short-term revenue concerns weigh heavier than its long-term investments in AI and infrastructure. While the 1-year total shareholder return sits at -17.8%, those who bought in three years ago have still seen an 11.3% total return. This highlights the company’s resilience amid market volatility.

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With a sharp fall in quarterly revenues expected and the share price trading well below consensus analyst targets, the key question now is whether Li Auto offers a compelling buying opportunity or if the market has already priced in its future growth.

Most Popular Narrative: 30.4% Undervalued

With Li Auto closing at $19.99 and the narrative fair value at $28.70, the consensus suggests notable upside potential if future growth is realised. This gap between price and value spotlights a key valuation debate.

The company's ongoing transition from extended-range vehicles (EREVs) to pure battery electric vehicles (BEVs), including successful launches of the Li MEGA and Li i8 and the upcoming Li i6, positions Li Auto to capture expanding market share as Chinese middle-class consumers upgrade and EV adoption accelerates, directly supporting long-term revenue growth and total addressable market expansion.

Read the complete narrative.

Curious what makes this fair value jump off the chart? The narrative leans on a bold pivot to pure electrics plus a surge in recurring tech revenues. What ambitious assumptions fuel these numbers? Click to unlock the entire forecast framework behind this price target.

Result: Fair Value of $28.70 (UNDERVALUED)

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

However, intensifying competition and slowing EV demand in China could undermine Li Auto’s growth story and prompt caution regarding its ambitious expansion plans.

Find out about the key risks to this Li Auto narrative.

Build Your Own Li Auto Narrative

If you want to dive deeper than the crowd’s consensus and follow your own instincts, try building your own narrative from the data in just a few minutes, and Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Li Auto.

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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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