Long-established in the Vehicles & Parts industry, Li Auto Inc (LI, Financial) has enjoyed a stellar reputation. However, it has recently witnessed a daily loss of 9.04%, juxtaposed with a three-month change of 6.91%. Fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Li Auto Inc.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 6/10
- Profitability rank: 2/10
- Growth rank: 0/10
- GF Value rank: 4/10
- Momentum rank: 3/10
Based on the above method, GuruFocus assigned Li Auto Inc the GF Score of 53 out of 100, which signals poor future outperformance potential.
Li Auto Inc: A Snapshot
Li Auto is a leading Chinese NEV manufacturer that designs, develops, manufactures, and sells premium smart NEVs. The company started volume production of its first model Li One in November 2019. The model is a six-seater, large, premium plug-in electric SUV equipped with a range extension system and advanced smart vehicle solutions. It sold over 133,000 NEVs in 2022, accounting for about 2% of China's passenger new energy vehicle market. Beyond Li One, the company will expand its product line, including both BEVs and PHEVs, to target a broader consumer base.
Profitability Breakdown
Li Auto Inc's low Profitability rank can also raise warning signals. Li Auto Inc's Operating Margin has declined over the past five years ((-80,705.00%)), as shown by the following data: 2018: 0; 2019: -647.24; 2020: -7.08; 2021: -3.77; 2022: -8.07; .
Growth Prospects
A lack of significant growth is another area where Li Auto Inc seems to falter, as evidenced by the company's low Growth rank.
Conclusion
Given the company's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential underperformance. While Li Auto Inc has made significant strides in the Vehicles & Parts industry, its current performance metrics suggest that it may struggle to maintain its growth trajectory. Investors should consider these factors when making investment decisions.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
