Why Li Auto’s latest MEGA delivery milestone matters for shareholders

Li Auto (LI) has crossed 30,000 cumulative deliveries of its flagship Li MEGA electric MPV, following a period that included a sizeable recall, putting fresh attention on what this means for the stock today.

At a share price of $17.15, Li Auto’s 1-day and 7-day share price returns of 2.39% and 6.39% sit against a 90-day share price decline of 16.30% and a 1-year total shareholder return decline of 25.85%. This suggests recent momentum has picked up after a weak stretch that included the MEGA recall, store closures and a renewed push into AI and higher end models.

If Li Auto’s MEGA milestone has you rethinking the whole sector, this is a handy moment to scan auto manufacturers for other potential opportunities in the auto space.

With Li Auto trading at $17.15, showing a 1-year total shareholder return decline of 25.85% but identified with an intrinsic discount of about 22%, investors may ask whether this represents a reset entry point or whether the market is already accounting for future growth.

Most Popular Narrative: 29.8% Undervalued

At $17.15, the most followed narrative implies Li Auto’s fair value sits close to the mid $20s, putting this recent MEGA delivery milestone into a wider long term context.

The analysts have a consensus price target of $29.298 for Li Auto based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $39.04, and the most bearish reporting a price target of just $18.13.

To see what sits behind that fair value gap, and why long term revenue growth, margins and future earnings multiples all pull in different directions, the full narrative lays out the numbers driving that $24.43 estimate and the 11.7% discount rate in a way the share price alone does not.

Result: Fair Value of $24.43 (UNDERVALUED)

However, the story can change quickly if heavy AI and R&D spending keeps cash flow under pressure, or if intense EV competition in China squeezes margins further.

Another View: Market Multiple Sends A Different Signal

While the SWS DCF model suggests Li Auto is undervalued at $17.15 versus a future cash flow value of $21.96, the P/E picture is less straightforward. The current 25.9x P/E is higher than the global auto average of 18.5x and the 23.1x peer average, yet sits below the 27.3x fair ratio. That mix of discount and premium raises a simple question: how much risk are you really being paid for here?

Build Your Own Li Auto Narrative

If you see the numbers differently or prefer to work from your own assumptions, you can test every input and shape your own view in minutes. Do it your way.

A great starting point for your Li Auto research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Ready to hunt for more opportunities?

If Li Auto has sharpened your thinking, do not stop here. Broaden your watchlist with targeted ideas that line up with how you like to invest.

• Kick off a search for potential value by scanning these 875 undervalued stocks based on cash flows that may offer compelling cash flow based pricing.
• Zero in on future facing themes by checking out these 24 AI penny stocks that are tied to artificial intelligence trends.
• Strengthen your income focus by reviewing these 14 dividend stocks with yields > 3% that might suit a yield driven approach.

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.