For those who appreciate growth without the sticker shock, NASDAQ:LI is worth considering.

Discover LI AUTO INC - ADR (NASDAQ:LI), an undervalued growth gem identified by our stock screener. NASDAQ:LI is shining in terms of growth metrics, and it's also displaying strong financial health and profitability. What's more, it retains an appealing valuation. We'll break it down further.

Understanding NASDAQ:LI's Growth

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:LI, the assigned 8 reflects its growth potential:

• The Earnings Per Share has grown by an impressive 1025.86% over the past year.
• LI shows a strong growth in Revenue. In the last year, the Revenue has grown by 139.76%.
• LI shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 135.72% yearly.
• LI is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.49% yearly.
• LI is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 21.99% yearly.

Understanding NASDAQ:LI's Valuation

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NASDAQ:LI has earned a 7 for valuation:

• Compared to the rest of the industry, the Price/Earnings ratio of LI indicates a somewhat cheap valuation: LI is cheaper than 78.05% of the companies listed in the same industry.
• The average S&P500 Price/Earnings ratio is at 29.43. LI is valued rather cheaply when compared to this.
• The Price/Forward Earnings ratio is 9.93, which indicates a very decent valuation of LI.
• Based on the Price/Forward Earnings ratio, LI is valued cheaply inside the industry as 82.93% of the companies are valued more expensively.
• The average S&P500 Price/Forward Earnings ratio is at 20.82. LI is valued rather cheaply when compared to this.
• Based on the Enterprise Value to EBITDA ratio, LI is valued cheaply inside the industry as 97.56% of the companies are valued more expensively.
• 97.56% of the companies in the same industry are more expensive than LI, based on the Price/Free Cash Flow ratio.
• 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 21.48% in the coming years.

Health Insights: NASDAQ:LI

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:LI has achieved a 5 out of 10:

• With an excellent Altman-Z score value of 2.53, LI belongs to the best of the industry, outperforming 82.93% of the companies in the same industry.
• 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.
• Looking at the Debt to FCF ratio, with a value of 0.58, LI belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
• A Debt/Equity ratio of 0.41 indicates that LI is not too dependend on debt financing.
• With a decent Quick ratio value of 1.48, LI is doing good in the industry, outperforming 75.61% of the companies in the same industry.

Evaluating Profitability: 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:

• The Return On Assets of LI (8.16%) is better than 87.80% 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 85.37% 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 82.93% of its industry peers.
• Looking at the Profit Margin, with a value of 9.45%, LI belongs to the top 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 has a better Gross Margin (22.20%) than 82.93% of its industry peers.
• LI's Gross Margin has improved in the last couple of years.

More Affordable Growth stocks can be found in our Affordable Growth screener.

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

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.