Is XPeng Stock Still Attractive After 104% Rally and Latest Analyst Forecasts?

If you are looking at XPeng stock and wondering what your next move should be, you are not alone. XPeng has certainly caught the eye of many growth-minded investors, thanks to an impressive 104.6% climb so far this year. Even in just the past month, the stock is up 19.2%, suggesting renewed confidence from the market. While some of these gains can be traced back to optimistic developments in the electric vehicle space and positive sentiment around Chinese technology stocks, investors are also re-thinking what kind of risk and reward XPeng might offer for the future.

It's not just the short-term moves that are grabbing attention. Looking back over three years, the stock is up a remarkable 147.7%. This kind of trajectory naturally sparks the question, is XPeng still trading at a reasonable value, or has the market already priced in too much enthusiasm? According to most valuation checks, the company comes out undervalued in just 1 out of 6 categories, which suggests some disconnect between the recent excitement and classic measures of company worth.

So how does XPeng stack up when we break down the numbers and compare it with peers? In the next section, we will dig into the key valuation techniques the market relies on. And stick around, as we will also explore a perspective on company valuation that most investors overlook, but which could make all the difference.

XPeng scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: XPeng Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) analysis estimates what a business is worth today based on projections of how much cash it will generate in the future. By taking forecasted cash flows and discounting them back to present value, the model attempts to capture the company’s true intrinsic value.

For XPeng, the latest reported Free Cash Flow (FCF) stands at a deficit of CN¥5.46 billion. Despite this negative base, projections show a rapid turnaround, with analysts expecting FCF to reach CN¥11.29 billion by 2027. Beyond that, extended forecasts suggest FCF could climb as high as CN¥18.70 billion in 2035. It is important to note that only the next five years receive direct analyst estimates and numbers after that come from modeling assumptions.

Pulling all these cash flow forecasts together, the DCF model calculates an estimated fair value of $21.57 per share for XPeng (with all cash flows in CN¥ but share price quoted in USD on the NYSE). At the current share price, XPeng trades at a 9.5% premium to this intrinsic value, implying the market is slightly more optimistic than the long-term fundamentals suggest.

Result: ABOUT RIGHT

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for XPeng.

Simply Wall St performs a valuation analysis on every stock in the world every day (check out XPeng's valuation analysis). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes.

Approach 2: XPeng Price vs Sales

The Price-to-Sales (P/S) ratio is often the go-to multiple for valuing high-growth companies that are not yet consistently profitable, such as XPeng. This metric helps investors see how much they are paying for each dollar of revenue and is especially relevant when earnings are negative or volatile.

Growth expectations and risk both play a big part in what investors consider a “fair” P/S ratio. A higher multiple can be justified by strong sales growth and a proven ability to scale revenues. Risk factors like uncertain profitability or reliance on future projections tend to keep valuations in check.

Currently, XPeng is trading at a P/S ratio of 2.66x. This is above the broader auto industry average of 1.39x, but below the peer group average of 3.57x. On the surface, this might look reasonable, but it misses the nuances specific to XPeng’s growth profile, margins, and risk characteristics.

This is where Simply Wall St’s Fair Ratio comes in. The Fair Ratio for XPeng, based on factors such as its topline growth, risk profile, industry, and market capitalization, stands at 2.13x. This proprietary figure gives a richer view than blanket industry or peer comparisons because it actually weighs XPeng’s unique strengths and challenges instead of assuming every company should be valued the same way.

With XPeng’s actual P/S ratio only slightly above the Fair Ratio, the difference is small and suggests the stock is trading around its fair value based on current fundamentals and outlook.

Result: ABOUT RIGHT

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your XPeng Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is simply a story you create about a company, linking your perspective (why XPeng will succeed or struggle) to actual forecasts for its future revenue, earnings, and profit margins. This approach connects the human side (your assumptions and insights) to the numbers (your estimated fair value), giving context and meaning to all those calculations.

Narratives are easy to use and built right into Simply Wall St's Community page, where millions of investors craft and share their stories about companies like XPeng. What makes Narratives powerful is that they help you decide when to buy, sell, or hold by showing how your fair value stacks up next to the current price. As soon as new information like earnings results or news emerges, your Narrative updates automatically, so your analysis always reflects the latest facts.

For example, one investor might believe XPeng will capture global EV market share through AI and partnerships, leading to a fair value as high as $33.26. Meanwhile, a more cautious view focusing on risks like heavy competition and ongoing losses lands at a much lower fair value of $18.27. Narratives help you clarify which story you believe, so your investment decisions stay aligned with your own outlook.

Do you think there's more to the story for XPeng? Create your own Narrative to let the Community know!

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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