NASDAQ:LI is probably undervalued for the fundamentals it is displaying.

Last update: Aug 19, 2024

LI AUTO INC - ADR (NASDAQ:LI) is a hidden gem identified by our stock screening tool, featuring undervaluation and robust fundamentals. NASDAQ:LI showcases decent financial health and profitability, coupled with an attractive price. Let's dig deeper into the analysis.

Understanding NASDAQ:LI's Valuation Score

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 7 out of 10:

Based on the Price/Earnings ratio, LI is valued a bit cheaper than the industry average as 78.05% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 29.43, LI is valued rather cheaply.
A Price/Forward Earnings ratio of 9.93 indicates a reasonable 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.
LI's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. LI is cheaper than 97.56% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of LI indicates a rather cheap valuation: LI is cheaper than 97.56% of the companies listed in the same industry.
LI has a very decent profitability rating, which may justify a higher PE ratio.
LI's earnings are expected to grow with 21.48% in the coming years. This may justify a more expensive valuation.

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

Exploring NASDAQ:LI's Health

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NASDAQ:LI was assigned a score of 5 for health:

LI has a better Altman-Z score (2.53) than 82.93% 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.
The Debt to FCF ratio of LI (0.58) is better than 100.00% of its industry peers.
A Debt/Equity ratio of 0.41 indicates that LI is not too dependend on debt financing.
LI has a Quick ratio of 1.48. This is in the better half of the industry: LI outperforms 75.61% of its industry peers.

Assessing Growth for NASDAQ:LI

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:

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%.
Measured over the past years, LI shows a very strong growth in Revenue. The Revenue has been growing by 135.72% on average per year.
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.
The Revenue is expected to grow by 21.99% on average over the next years. This is a very strong growth

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

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

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.