NASDAQ:LI is showing decent growth, but is still valued reasonably.

Last update: Jan 7, 2025

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.

Evaluating Growth: 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 59.14%, 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.
The Earnings Per Share is expected to grow by 8.56% on average over the next years. This is quite good.
The Revenue is expected to grow by 20.31% on average over the next years. This is a very strong growth

Assessing Valuation Metrics 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 a bit cheaper than 80.00% of the companies in the same industry.
LI is valuated rather cheaply when we compare the Price/Earnings ratio to 27.40, which is the current average of the S&P500 Index.
80.00% of the companies in the same industry are more expensive than LI, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.67, LI is valued a bit cheaper.
Based on the Enterprise Value to EBITDA ratio, LI is valued cheaply inside the industry as 87.50% of the companies are valued more expensively.
LI's Price/Free Cash Flow ratio is rather cheap when compared to the industry. LI is cheaper than 92.50% of the companies in the same industry.
The decent profitability rating of LI may justify a higher PE ratio.
LI's earnings are expected to grow with 18.06% in the coming years. This may justify a more expensive valuation.

A Closer Look at Health for NASDAQ:LI

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:

LI has a debt to FCF ratio of 0.39. This is a very positive value and a sign of high solvency as it would only need 0.39 years to pay back of all of its debts.
LI has a Debt to FCF ratio of 0.39. This is amongst the best in the industry. LI outperforms 100.00% of its industry peers.
LI has a Debt/Equity ratio of 0.13. This is a healthy value indicating a solid balance between debt and equity.
LI's Debt to Equity ratio of 0.13 is fine compared to the rest of the industry. LI outperforms 72.50% of its industry peers.
Looking at the Current ratio, with a value of 1.76, LI is in the better half of the industry, outperforming 65.00% of the companies in the same industry.
The Quick ratio of LI (1.64) is better than 77.50% of its industry peers.

Assessing Profitability for 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:

LI has a Return On Assets of 6.57%. This is amongst the best in the industry. LI outperforms 90.00% of its industry peers.
With an excellent Return On Equity value of 15.27%, LI belongs to the best of the industry, outperforming 82.50% of the companies in the same industry.
LI has a better Return On Invested Capital (5.78%) than 80.00% of its industry peers.
With an excellent Profit Margin value of 7.16%, LI belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
LI has a Operating Margin of 4.48%. This is in the better half of the industry: LI outperforms 77.50% of its industry peers.
LI has a Gross Margin of 21.47%. This is in the better half of the industry: LI outperforms 80.00% of its industry peers.
In the last couple of years the Gross Margin of LI has grown nicely.

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

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

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.