One-glance verdict
Undervalued
$71.71 our estimate vs market $11.93
Wall Street consensus: $15.20 (-78.8% lower than our fair-value estimate)
83% below our estimate, below the bear case
Fundamentals snapshot
Li Auto Inc.
LI · NMS · Consumer Cyclical · Auto Manufacturers
Current price
$11.93
52-week range
$10.66 - $22.44
Market cap
$11.66B
Balance sheet
Healthy
-3.10x Concerning
Net cash $10.62B. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
3 Risks
1 rewards · 3 risks
- Reward Free cash flow was positive in 5/10 years.
- Risk Insider ownership is only 0.0% (peer median: 15.4%).
- Risk Return on equity was -6.6% last year — the company lost money on shareholders' equity.
- Risk Operating margin compressed from -8.1% to -8.5% over 3 years.
What this company does
Li Auto Inc.
Li Auto designs and sells fancy electric cars in China, with their main money coming from selling these vehicles. This matters because it shows how well they are doing at getting people to buy their electric car models, impacting their overall success.
How the company got here
Li Auto Inc. was founded in 2015 by Li Xiang, who previously started the car website Autohome. Initially, the company was called CHJ Automotive and planned to make a small city car. However, they shifted focus to a larger family SUV, which became the Li ONE. This vehicle used a range-extender system, meaning a small gasoline engine charged the battery, while electric motors powered the wheels, allowing for electric driving day-to-day without range anxiety on longer trips. Li Auto went public on the Nasdaq stock market in July 2020, raising significant funds to grow its operations. The company has since expanded its product line and manufacturing capabilities, including building a second plant in Beijing.
What it actually does
Li Auto designs, develops, manufactures, and sells premium smart electric vehicles. They focus on creating vehicles that are safe, convenient, and comfortable for families. Their product lineup includes both range-extended electric vehicles (REEVs) and fully battery-electric vehicles (BEVs). Li Auto also develops its own core technologies, such as its range extension system, advanced driver-assistance systems (ADAS), and smart vehicle solutions, aiming to provide a seamless and intelligent driving experience.
Li L Series (Range-Extended Electric SUVs)
This is Li Auto's core business and has historically been its main revenue driver. The L series consists of SUVs that use a range-extender system. This means they have a small gasoline engine that acts as a generator to charge the battery, while electric motors provide the power to drive the wheels. This setup allows drivers to enjoy electric driving for daily commutes while having the flexibility of gasoline for longer journeys, alleviating range anxiety. Models in this series include the L6, L7, L8, and L9, catering to different family needs and sizes.
Li i Series (Battery Electric SUVs) and Li MEGA (Electric MPV)
This segment represents Li Auto's expansion into fully battery-electric vehicles (BEVs). The i series includes battery-electric SUVs, offering a zero-emission driving experience. The Li MEGA is a high-tech, flagship family MPV (multi-purpose vehicle) that is also fully electric. This diversification into BEVs aims to capture a broader market segment and cater to the growing demand for pure electric transportation.
In-house Technology Development
Li Auto invests heavily in developing its own core technologies. This includes proprietary range extension systems, next-generation electric vehicle platforms, and smart vehicle solutions like advanced driver-assistance systems (ADAS) and navigation-based assisted driving. They are also developing their own chips, such as the Mach M100, and silicon carbide modules. This vertical integration allows Li Auto to control key components, optimize performance, and potentially offer these technologies to other manufacturers in the future.
What management is betting on now
Li Auto's current strategy focuses on reinforcing its leadership in the premium range-extended vehicle segment while also expanding its fully electric offerings. Management is prioritizing the development of advanced in-house technologies, including AI-powered vehicles and autonomous driving systems, to create a differentiated user experience. The company is also pursuing international expansion, with plans to launch vehicles in markets like Kazakhstan, Uzbekistan, Dubai, and Europe. Furthermore, Li Auto is exploring opportunities to commercialize its in-house developed chips and components to external customers, creating new revenue streams and spreading research and development costs.
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$1.12B
FY2025 Q4
$-1.83B
Revenue
$16.06B
Net income
—
Diluted EPS
0.08
Operating cash flow
$-1.23B
Free cash flow
$-1.83B
Fetching…
Sources
Revenue
$19.79B
Net income
—
Diluted EPS
0.52
Operating cash flow
$2.18B
Free cash flow
$1.12B
Fetching…
Sources
Is it cheap or expensive?
Fair value $71.71 vs current price $11.93
Wall Street consensus is the average analyst price target: $15.20 (-78.8% lower than our fair-value estimate).
Our most-likely fair value is $71.71 a share — about 501.0% above today's price of $11.93, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $10.6B - more cash than debt. Interest coverage -3.1x.
Net debt
$-10.62B
Interest coverage
-3.10x
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.
Healthy
Worse cushion
Baseline
Better cushion
LI
BASELINE
Li Auto Inc.
Total debt $2.20B Interest coverage -3.10x This is the baseline the peer rows are being compared against.
Total debt $4.34B Interest coverage -15.86x Neither company has much profit cushion over interest right now.
Total debt $4.02B Interest coverage -6.99x Neither company has much profit cushion over interest right now.
Total debt $5.35B Interest coverage -13.08x Neither company has much profit cushion over interest right now.
Total debt $3.66B Interest coverage -36.82x Neither company has much profit cushion over interest right now.
Total debt $6.02B Interest coverage -5.29x Neither company has much profit cushion over interest right now.
What you should know
The case for and against LI
1 Reward
3 Risks
Rewards
-
Free cash flow was positive in 5/10 years.
Risks
-
Insider ownership is only 0.0% (peer median: 15.4%).
-
Return on equity was -6.6% last year — the company lost money on shareholders' equity.
-
Operating margin compressed from -8.1% to -8.5% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
—
Forward P/E
21.48x
P/B
1.20x
P/S
0.11x
EV/EBITDA
52.32x
PEG ratio
4.18x
Profitability
How much profit each dollar creates
Gross margin
13.6%
Operating margin
-8.5%
Net margin
-4.4%
ROE
-6.6%
ROA
-2.8%
Health
Liquidity and balance-sheet strength
Debt / equity
0.22x
Current ratio
1.81x
Quick ratio
1.57x
Total debt
$2.20B
Total cash
$12.82B
Growth
How the business has been compounding
Revenue TTM
$59.86B
Revenue 5Y CAGR
39.5%
EPS TTM
-0.65
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$9.16B
Free CF TTM
$-1.83B
FCF margin
-3.1%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
—