XPeng Q1 Earnings: Profitability Test After Record Quarter

XPeng (XPEV) heads into its Q1 2026 earnings report after a record Q4 2025 for profitability. However, guidance for lower deliveries and a year-over-year revenue decline puts investor focus squarely on margins.

XPeng's recent guidance for softer Q1 revenue comes alongside a weaker share price backdrop. The stock is at US$15.62 and the year-to-date share price return is down 23.54%, while the 3-year total shareholder return of 65.99% highlights how sentiment around longer term prospects has shifted over time.

If you want to see how other EV and automation plays are trading ahead of earnings, this is a good moment to scan 34 robotics and automation stocks

With XPeng’s share price down over the past year despite recent profitability momentum, and with the stock trading at a discount to the average analyst price target, investors may ask whether there is genuine value here or whether the market has already fully reflected expectations for future growth.

Most Popular Narrative: 44.5% Undervalued

XPeng's most followed narrative pegs fair value at $28.16 versus the current $15.62, framing a wide gap that hinges on future software and AI economics.

XPeng's rapid in-house development and deployment of proprietary AI hardware (Turing AI SoC) and vision-based ADAS are expected to significantly advance its vehicle autonomy and smart cockpit solutions, aligning with surging consumer demand for intelligent, software-centric vehicles, setting the stage for higher-margin software revenue and enhanced gross/net margins.

Want to see what kind of revenue mix, margin trajectory, and earnings power this narrative assumes? The core thesis rests on software heavy cash flows and a premium pricing shift.

Result: Fair Value of $28.16 (UNDERVALUED)

However, this depends on XPeng reversing its persistent net losses and managing intense Chinese EV price competition, which could pressure both revenue growth and margins.

Another Lens On Value

That 44.5% undervaluation narrative sits awkwardly next to Simply Wall St’s DCF view. The SWS DCF model estimates XPeng’s future cash flows at about $7.93 per share, while the stock trades at $15.62, suggesting it could be overvalued on this framework. Which set of assumptions do you trust more?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out XPeng for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 51 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

The mixed signals around XPeng's valuation make this a good time to review the data yourself and decide quickly where you stand, beginning with its 2 key rewards.

Looking for more investment ideas?

If XPeng has your attention, do not stop here. Use the Screener to line up alternative stocks, compare quality, and sharpen where your capital goes next.

• Spot potential underpriced opportunities before the crowd by scanning 51 high quality undervalued stocks and seeing which companies currently line up with your return and risk expectations.
• Prioritise financial strength by reviewing companies in the solid balance sheet and fundamentals stocks screener (45 results) and focus on those with fundamentals that better match your comfort zone.
• Get ahead of the market by tracking the screener containing 21 high quality undiscovered gems, where you can find lesser known stocks that still meet clear quality filters.

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.