Li Auto (NasdaqGS:LI): Is the Recent Earnings Decline Reflected in Its Current Valuation?

Li Auto (NasdaqGS:LI) just released its third quarter results, revealing a clear year-over-year drop in both sales and revenue. The company also warned that fourth quarter deliveries and revenue will likely fall sharply compared to last year.

See our latest analysis for Li Auto.

It has been a volatile period for Li Auto, as the stock has lost momentum over the past year, with a 1-year total shareholder return of -16.1% and a steep 23.7% share price drop year-to-date. The bigger picture is clear: after a promising start, recent profit warnings and weaker delivery outlooks have weighed on sentiment. Investors are now reassessing the company’s growth prospects in light of shifting market dynamics.

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With shares trading well below analyst price targets and recent results shaking market confidence, the pressing question is whether Li Auto is now undervalued or if the market has already priced in further challenges. Could this be a buying opportunity, or is caution still warranted?

Most Popular Narrative: 34.8% Undervalued

Li Auto’s most followed narrative puts its fair value at $28.09, which is substantially above the last close of $18.32. This sizable gap spotlights optimism about future growth compared to current market pricing, raising the stakes for whether expectations will be met in the coming years.

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.

Want to see what powers that bold valuation call? This narrative’s secret sauce combines aggressive electrification, fresh premium models, and assumptions about untapped global demand. The real story is under the hood. Dive in to uncover the financial leaps and competitive moves analysts are banking on.

Result: Fair Value of $28.09 (UNDERVALUED)

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

However, intensifying EV competition and rising capital demands could weigh on Li Auto’s margins and may slow its international expansion ambitions.

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

Build Your Own Li Auto Narrative

Don’t buy into the consensus if it doesn’t fit your view. If you believe your own analysis tells a different story, you can generate your own in just a few minutes. 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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