Li Auto deliveries put fresh focus on the stock ahead of earnings

Li Auto (LI) just released its July delivery update, reporting 30,468 vehicles for the month and 1,764,155 vehicles year to date. This operational snapshot comes as investors watch the upcoming earnings release.

Despite the fresh delivery update, Li Auto’s share price tells a mixed story, with a 1 day share price return of 2.05%, a year to date share price return down 24.93%, and a 1 year total shareholder return down 47.76%. This suggests that recent optimism is emerging after a much tougher longer term performance.

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Li Auto now trades at a discount to both analyst targets and some intrinsic estimates after a sharp pullback. Is this simply cautious pricing for a loss making EV company ahead of earnings, or a mispriced opportunity?

Most Popular Narrative: 28.6% Undervalued

Li Auto’s most followed narrative points to a fair value of $18.14 compared with the last close at $12.95, which frames the stock as meaningfully discounted based on that model.

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.

Curious what kind of revenue pace and profit margins would need to line up with that fair value. The narrative leans on rising earnings power, expanding software income and a richer product mix to justify the gap to today’s share price.

Result: Fair Value of $18.14 (UNDERVALUED)

However, investors still need to weigh rising R&D and AI spending against current losses and the risk that tougher EV competition squeezes Li Auto’s pricing power.

Another view on Li Auto valuation

The SWS DCF model estimates Li Auto shares at $14.18, which is only 8.6% above the current $12.95 price. That still points to undervaluation, but the gap is much smaller than the $18.14 narrative fair value. Which set of assumptions appears more realistic to you?

Next Steps

If the mixed sentiment on Li Auto so far has you on the fence, it makes sense to move quickly and test the numbers yourself. To see why some investors are still optimistic, take a closer look at the 2 key rewards.

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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.