Fundamentals snapshot
LI · NMS · Consumer Cyclical · Auto Manufacturers
Current price
$14.53
52-week range
$14.41 - $32.02
Market cap
$14.74B
One-glance verdict
Fair-value range $46.35 – $129.34 (cautious → optimistic — tap the ? for the math)
Wall Street consensus: $18.74 (-67.6% lower than our fair-value estimate)
Buy below $46.25 for a 20% safety cushion
Balance sheet
Net cash $11.11B. Interest coverage shows how many times profit covers the interest bill.
What stands out
Quick scan of the biggest positives and negatives from the detailed checklist below.
What this company does
Li Auto is a Chinese company that builds and sells high-end smart electric cars, focusing on spacious SUVs designed for families. The company makes nearly all of its money from selling these vehicles in China, which is the world's largest market for electric cars. This focus on a popular type of vehicle in a massive and growing market is central to its business strategy.
Li Auto was founded in 2015 by entrepreneur Li Xiang, who had previously founded Autohome, a popular car information website. The company's initial focus was on a unique technology called extended-range electric vehicles (EREVs), which use a small gasoline engine to charge the battery and eliminate 'range anxiety' (the fear of running out of power). This strategy proved very popular with Chinese families who wanted the benefits of an electric car without being limited by the availability of charging stations. After launching its first model, the Li ONE, in 2019, the company grew rapidly and went public on the Nasdaq stock exchange in the U.S. in 2020 to raise money for expansion.
Li Auto designs, builds, and sells premium electric vehicles aimed at families in China. Think of them as spacious, high-tech 'mobile homes' on wheels, with a focus on comfort and smart features. Unlike many electric car companies that only sell pure battery-powered cars, Li Auto became famous for its extended-range models that include a small gasoline generator to recharge the battery on the go. They sell their cars directly to customers through their own stores and online channels, rather than through traditional dealerships.
The vast majority of Li Auto's money, about 94-95%, comes from selling its cars. The company offers a lineup of large, premium sport utility vehicles (SUVs) and multi-purpose vehicles (MPVs), such as the L-series (L6, L7, L8, L9) and the all-electric MEGA. Customers pay for the vehicles themselves, which are positioned in the premium price range, competing with brands like BMW and Mercedes-Benz in China. This is the company's core business and the primary driver of its financial performance.
A smaller, but growing, part of the business comes from a collection of other offerings that support their car owners. This includes selling home charging stations, accessories, and offering extended warranties for the vehicles. It also includes revenue from services like internet connectivity in the car and access to their network of fast-charging stations. While this segment is much smaller than vehicle sales, it creates ongoing relationships with customers and provides recurring revenue (income that is predictable and likely to continue in the future).
Management is making a big push to expand beyond its successful extended-range vehicles into the world of pure battery electric vehicles (BEVs). To support this, they are investing heavily in building out their own network of thousands of high-speed '5C' supercharging stations across China to make charging faster and more convenient. The company is also focused on developing more advanced autonomous driving technology, aiming to make its cars smarter and safer. Finally, Li Auto is beginning to expand internationally, starting with markets in the Middle East and Central Asia that have a strong demand for large, premium SUVs.
Price history
Earnings history
Click any quarter to read the call summary and what the numbers say.
Is it cheap or expensive?
Wall Street consensus is the average analyst price target: $18.74 (-67.6% lower than our fair-value estimate).
Buy below $46.25 for a 20% safety cushion. That means buying at least 20% below our fair value, as a buffer in case our estimate turns out too rosy.
Our most-likely fair value is $57.81 a share — about 297.9% above today's price of $14.53, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Net cash $11.1B - more cash than debt. Interest coverage -3.1x.
Li Auto Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 5 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Total debt $2.62B Interest coverage -3.10x This is the baseline the peer rows are being compared against.
Total debt $3.92B Interest coverage -15.86x Neither company has much profit cushion over interest right now.
Total debt $3.49B Interest coverage -6.99x Neither company has much profit cushion over interest right now.
Total debt $5.23B Interest coverage -13.08x Neither company has much profit cushion over interest right now.
Total debt $3.17B Interest coverage -36.82x Neither company has much profit cushion over interest right now.
Total debt $6.62B Interest coverage -5.29x Neither company has much profit cushion over interest right now.
What you should know
The numbers
Tap any ? icon to learn what it means.
Valuation
Profitability
Health
Growth
Cash flow
Dividend
Metric explainer
Debt comparison
What you should know