NASDAQ:LI, a growth stock which is not overvalued.

Last update: Nov 26, 2024

LI AUTO INC - ADR (NASDAQ:LI) has caught the eye of our stock screener as an affordable growth stock. NASDAQ:LI is displaying robust growth metrics and also excels in terms of profitability, solvency, and liquidity. Additionally, it appears to be reasonably priced. Let's delve into the details.

How do we evaluate the Growth for NASDAQ:LI?

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NASDAQ:LI was assigned a score of 8 for growth:

LI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 59.18%, which is quite impressive.
LI shows a strong growth in Revenue. In the last year, the Revenue has grown by 42.25%.
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.
LI is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.57% yearly.
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.

Valuation Analysis for NASDAQ:LI

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NASDAQ:LI boasts a 6 out of 10:

Based on the Price/Earnings ratio, LI is valued cheaper than 80.95% of the companies in the same industry.
LI is valuated rather cheaply when we compare the Price/Earnings ratio to 29.56, which is the current average of the S&P500 Index.
83.33% of the companies in the same industry are more expensive than LI, based on the Price/Forward Earnings ratio.
LI is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.20, which is the current average of the S&P500 Index.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of LI indicates a rather cheap valuation: LI is cheaper than 80.95% of the companies listed in the same industry.
LI's Price/Free Cash Flow ratio is rather cheap when compared to the industry. LI is cheaper than 95.24% of the companies in the same industry.
LI has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as LI's earnings are expected to grow with 18.07% in the coming years.

A Closer Look at Health for 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:

LI's Altman-Z score of 2.74 is amongst the best of the industry. LI outperforms 85.71% of its industry peers.
The Debt to FCF ratio of LI is 1.05, which is an excellent value as it means it would take LI, only 1.05 years of fcf income to pay off all of its debts.
LI has a better Debt to FCF ratio (1.05) than 100.00% of its industry peers.
A Debt/Equity ratio of 0.44 indicates that LI is not too dependend on debt financing.
LI has a Quick ratio of 1.63. This is in the better half of the industry: LI outperforms 73.81% of its industry peers.

Evaluating Profitability: NASDAQ:LI

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:LI, the assigned 6 is noteworthy for profitability:

Looking at the Return On Assets, with a value of 7.01%, LI belongs to the top of the industry, outperforming 90.48% of the companies in the same industry.
With an excellent Return On Equity value of 16.18%, LI belongs to the best of the industry, outperforming 85.71% of the companies in the same industry.
LI has a Return On Invested Capital of 4.08%. This is in the better half of the industry: LI outperforms 71.43% of its industry peers.
LI has a better Profit Margin (7.61%) than 85.71% of its industry peers.
LI's Operating Margin of 3.93% is fine compared to the rest of the industry. LI outperforms 73.81% of its industry peers.
The Gross Margin of LI (21.61%) is better than 83.33% of its industry peers.
LI's Gross Margin has improved in the last couple of years.

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

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

Keep in mind

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.