NASDAQ:LI, a strong growth stock, setting up for a breakout.

Last update: Jul 23, 2024

For growth-minded investors, high revenue and EPS growth are key criteria. Today, we'll examine whether LI AUTO INC - ADR (NASDAQ:LI) fits the bill for growth investing, particularly as it forms a base and hints at a potential breakout. Remember, due diligence is essential, but LI AUTO INC - ADR has caught our attention on our screen for growth with base formation. It may warrant additional investigation.

Growth Analysis for NASDAQ:LI

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:LI has received a 8 out of 10:

LI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 1025.86%, which is quite impressive.
Looking at the last year, LI shows a very strong growth in Revenue. The Revenue has grown by 139.76%.
The Revenue has been growing by 135.72% on average over the past years. This is a very strong growth!
Based on estimates for the next years, LI will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.49% on average per year.
Based on estimates for the next years, LI will show a very strong growth in Revenue. The Revenue will grow by 21.99% on average per year.

Looking at the Health

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:LI scores a 5 out of 10:

LI has a better Altman-Z score (2.55) than 80.49% of its industry peers.
The Debt to FCF ratio of LI is 0.58, which is an excellent value as it means it would take LI, only 0.58 years of fcf income to pay off all of its debts.
LI has a Debt to FCF ratio of 0.58. This is amongst the best in the industry. LI outperforms 100.00% of its industry peers.
LI has a Debt/Equity ratio of 0.41. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Quick ratio, with a value of 1.48, LI is in the better half of the industry, outperforming 75.61% of the companies in the same industry.

A Closer Look at Profitability for NASDAQ:LI

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NASDAQ:LI, the assigned 6 is a significant indicator of profitability:

With an excellent Return On Assets value of 8.16%, LI belongs to the best of the industry, outperforming 87.80% of the companies in the same industry.
The Return On Equity of LI (19.46%) is better than 85.37% of its industry peers.
LI's Return On Invested Capital of 6.24% is amongst the best of the industry. LI outperforms 82.93% of its industry peers.
With an excellent Profit Margin value of 9.45%, LI belongs to the best of the industry, outperforming 87.80% of the companies in the same industry.
Looking at the Operating Margin, with a value of 5.98%, LI is in the better half of the industry, outperforming 78.05% of the companies in the same industry.
LI's Gross Margin of 22.20% is amongst the best of the industry. LI outperforms 80.49% of its industry peers.
In the last couple of years the Gross Margin of LI has grown nicely.

How does the Setup look for NASDAQ:LI

Alongside the Technical Rating, ChartMill assigns a Setup Rating to evaluate the consolidation level of a stock. This rating, ranging from 0 to 10, is updated daily and considers various short-term technical indicators. The current setup rating for NASDAQ:LI is 7:

Although the technical rating is bad, LI does present a nice setup opportunity. Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 21.28. Right above this resistance zone may be a good entry point.

Every day, new Strong Growth stocks can be found on ChartMill in our Strong Growth screener.

Check the latest full fundamental report of LI for a complete fundamental analysis.

For an up to date full technical analysis you can check the technical report of LI

Keep in mind

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.