XPeng (XPEV) drew fresh attention after reporting July 2026 deliveries of 38,027 vehicles, a 4% year over year increase. The company also crossed 1.2 million cumulative deliveries and outlined new international expansion plans.

The July delivery update arrived after a weak share price run for XPeng, with the stock down 36.37% on a year to date share price return and a 27.98% decline in 1 year total shareholder return. The recent 7 day share price return of 5.43% suggests some short term momentum is building as investors weigh the latest delivery data and expansion plans against that longer term performance record.

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XPeng's share price is still down sharply over the past year, even after the recent bounce on July deliveries and expansion plans. This puts you at a fork in the road: Is it worth stepping in now, or waiting for a clearer margin of safety as the valuation picture comes into focus next?

Most Popular Narrative: 41.9% Undervalued

XPeng's most followed narrative anchors on a fair value of $22.36 against a last close of $13.00, which implies a wide valuation gap that investors are now weighing against the latest delivery momentum and expansion headlines.

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 and setting the stage for higher-margin software revenue and enhanced gross/net margins.

Want to see how this AI hardware push feeds into the valuation gap? Revenue mix, margin shifts and a punchy future earnings multiple are doing the heavy lifting. The full narrative joins those moving parts into one clear fair value story.

Result: Fair Value of $22.36 (UNDERVALUED)

However, XPeng still carries key risks, including ongoing net losses and intense Chinese EV price competition, which could pressure margins and challenge this undervalued narrative.

Another View on XPeng's Valuation

While the analyst narrative for XPeng leans on a fair value of $22.36 and labels the stock as undervalued, the SWS DCF model points in a different direction. At a current price of $13, XPeng trades above a future cash flow value estimate of $9.91, which frames the shares as overvalued on this method. For investors, the key question is which set of assumptions feels closer to reality.

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 55 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

With mixed sentiment around XPeng's valuation and growth story, this is a good time to review the data yourself and act promptly. To see what has investors optimistic, take a closer look at XPeng's 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.