50K delivery milestone strengthens case for LI stock


Start-up of Chinese electric vehicles (EVs) Li Auto (NASDAQ:LI) is certainly not a market darling. Indeed, if we were to judge the company simply on the basis of the price action of LI stock, we could assume that Li Auto is not achieving its goals at all.

Source: Carrie Fereday / Shutterstock.com

The point is, stock prices don’t always reflect a company’s true value. Sometimes there is a mismatch between asset prices and a company’s potential – and this is where great investment opportunities arise.

Is LI stock one of those opportunities? Suffice it to say, the share price has been beaten even as Li Auto continues to deliver – literally.

So, with that in mind, let’s take a look at the technicalities of this stock and see if there is really a good deal here.

A look at LI Stock

Let’s turn the clock back for a moment. In July 2020, Li Auto set the price for its initial public offering (IPO) at $ 11.50 per US custodian share. That’s higher than the previously offered price range of $ 8 to $ 10.

It was a time when the market fad over EV stocks was really starting to heat up. So LI stock jumped to around $ 23 in August. But it got even wilder after that. Surprisingly, the stock hit a 52-week high of $ 47.70 on November 24.

Generally speaking, this is not my preferred strategy for buying a stock after a rapid, vertical movement in price. However, not everyone follows this principle of caution.

People who bought LI at the end of November were severely punished as the stock price fell in December and throughout the first quarter of 2021. In May of this year, the stock was below the $ 20 level. .

But is this a sign of disaster? Or a great buying opportunity? As usual, we’ll use the data – rather than market mania – to determine if the LI stock deserves a buy signal now.

A good month deserves another

In April, I reported on Li Auto’s March delivery update and what it meant for LI stock.

The company’s flagship electric SUV, known as Li ONE, was apparently selling like hot cakes. For the month, the automaker delivered 4,900 Li ONE.

Year over year (YOY), this represented an increase of almost 239%. With this, the story of Li Auto’s growth began to remind me Nio (NYSE:NIO) and this company fast improvement in delivery figures.

Fast forward to mid-May and it’s time for Li Auto to release its delivery data for April. Of course, there was (and still is) a shortage of chips. The question was whether Li could overcome the flea crisis.

Thankfully, it looks like the company is still pulling all cylinders despite headwinds in the industry. Apparently Li Auto delivered 5539 Li ONE in April. This translates into a 113% year-over-year increase.

The fastest record, perhaps

Okay, so the 113% yoy increase in Li ONE shipments in April is not as large as the over 200% increase in March. But let’s not be so insensitive to a triple digit jump here. The achievement is always impressive – 113% is pretty amazing.

And if you like numbers with lots of zeros, then you should take advantage of this next treat; according to Li Auto, the company reaches the milestone of 50,000 units for deliveries “in just 17 months after the launch of the first LI ONE in December 2019.”

To be precise, Li’s total deliveries now stand at 51,575 vehicle deliveries. Additionally, boldly but perhaps accurately, Li Auto claims that this quick step marks the “fastest record of all new energy vehicle companies.”

I invite all detectives out there to verify or refute this claim. But, while it’s not necessarily the “fastest record,” you have to admit that this feat is still pretty damn quick. This is a good thing for the LI stock.

The Bottom Line on LI Stock

It’s hard to find a lot of enthusiastic LI stock bulls right now. Sentiment, it seems, is decidedly bearish.

However, this sentiment contrasts sharply with the company’s exceptional vehicle delivery statistics.

Sooner or later the market should recognize the true value of Li Auto. Hopefully this will also be reflected more accurately in the share price.

At the time of publication, David Moadel did not hold (directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com Publication guidelines.

David Moadel provided compelling content – and at times crossed the finish line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga and (of course) InvestorPlace.com. He is also a chief analyst and market researcher for Portfolio Wealth Global and hosts the popular YouTube financial channel Looking at the Markets.


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