Despite its impressive fundamentals, NASDAQ:LI remains undervalued.

Last update: Apr 22, 2024

Our stock screening tool has pinpointed LI AUTO INC - ADR (NASDAQ:LI) as an undervalued stock option. NASDAQ:LI retains a strong financial foundation and an attractive price tag. Let's delve into the specifics below.

Evaluating Valuation: NASDAQ:LI

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NASDAQ:LI has achieved a 8 out of 10:

76.32% of the companies in the same industry are more expensive than LI, based on the Price/Earnings ratio.
LI's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.75.
With a Price/Forward Earnings ratio of 11.78, the valuation of LI can be described as very reasonable.
78.95% of the companies in the same industry are more expensive than LI, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 21.23. LI is valued slightly cheaper when compared to this.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of LI indicates a rather cheap valuation: LI is cheaper than 89.47% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, LI is valued cheaper than 100.00% of the companies in the same industry.
LI's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of LI may justify a higher PE ratio.
A more expensive valuation may be justified as LI's earnings are expected to grow with 38.11% in the coming years.

Profitability Examination for NASDAQ:LI

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:LI scores a 6 out of 10:

LI has a better Return On Assets (8.16%) than 89.47% of its industry peers.
Looking at the Return On Equity, with a value of 19.46%, LI belongs to the top of the industry, outperforming 86.84% of the companies in the same industry.
LI has a Return On Invested Capital of 6.24%. This is amongst the best in the industry. LI outperforms 84.21% of its industry peers.
LI's Profit Margin of 9.45% is amongst the best of the industry. LI outperforms 86.84% of its industry peers.
LI has a Operating Margin of 5.98%. This is amongst the best in the industry. LI outperforms 81.58% of its industry peers.
With an excellent Gross Margin value of 22.20%, LI belongs to the best of the industry, outperforming 86.84% of the companies in the same industry.
In the last couple of years the Gross Margin of LI has grown nicely.

Looking at the Health

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:LI, the assigned 5 reflects its health status:

The Altman-Z score of LI (2.79) is better than 76.32% of its industry peers.
LI has a debt to FCF ratio of 0.58. This is a very positive value and a sign of high solvency as it would only need 0.58 years to pay back of all of its debts.
LI's Debt to FCF ratio of 0.58 is amongst the best of the industry. LI outperforms 100.00% of its industry peers.
A Debt/Equity ratio of 0.41 indicates that LI is not too dependend on debt financing.
LI's Quick ratio of 1.48 is fine compared to the rest of the industry. LI outperforms 68.42% of its industry peers.

Assessing Growth Metrics for NASDAQ:LI

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NASDAQ:LI has achieved a 7 out of 10:

LI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 632.69%, which is quite impressive.
Looking at the last year, LI shows a very strong growth in Revenue. The Revenue has grown by 173.48%.
The Revenue has been growing by 135.72% on average over the past years. This is a very strong growth!
The Revenue is expected to grow by 24.64% on average over the next years. This is a very strong growth

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Our latest full fundamental report of LI contains the most current fundamental analsysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.