Analyst Estimates: Here's What Brokers Think Of XPeng Inc. (NYSE:XPEV) After Its First-Quarter Report

XPeng Inc. (NYSE:XPEV) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. Revenues and losses per share were both better than expected, with revenues of CN¥6.5b leading estimates by 6.5%. Statutory losses were smaller than the analystsexpected, coming in at CN¥1.45 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on XPeng after the latest results.

Check out our latest analysis for XPeng

Taking into account the latest results, the consensus forecast from XPeng's 38 analysts is for revenues of CN¥43.4b in 2024. This reflects a major 31% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 24% to CN¥7.58. Yet prior to the latest earnings, the analysts had been forecasting revenues of CN¥49.3b and losses of CN¥8.45 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue forecasts while also reducing the estimated losses the business will incur.

There was no major change to the US$12.69average price target, suggesting that the adjustments to revenue and earnings are not expected to have a long-term impact on the business. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic XPeng analyst has a price target of US$20.08 per share, while the most pessimistic values it at US$7.69. This is a very narrow spread of estimates, implying either that XPeng is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the XPeng's past performance and to peers in the same industry. It's clear from the latest estimates that XPeng's rate of growth is expected to accelerate meaningfully, with the forecast 43% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 26% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 13% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that XPeng is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. With that said, earnings are more important to the long-term value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on XPeng. Long-term earnings power is much more important than next year's profits. We have forecasts for XPeng going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for XPeng that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.