Why NASDAQ:LI Is a Promising High-Growth Stock in the Midst of Consolidation.

Last update: Jan 28, 2025

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.

Deciphering NASDAQ:LI's Growth Rating

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:

The Earnings Per Share has grown by an impressive 59.14% over the past year.
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.
Based on estimates for the next years, LI will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.56% on average per year.
LI is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 20.31% yearly.

Understanding NASDAQ:LI's Health

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:LI has received a 5 out of 10:

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's Debt to FCF ratio of 0.39 is amongst the best of the industry. LI outperforms 100.00% of its industry peers.
A Debt/Equity ratio of 0.13 indicates that LI is not too dependend on debt financing.
LI has a Debt to Equity ratio of 0.13. This is in the better half of the industry: LI outperforms 75.00% of its industry peers.
LI has a better Current ratio (1.76) than 65.00% of its industry peers.
LI has a better Quick ratio (1.64) than 77.50% of its industry peers.

Exploring NASDAQ:LI's Profitability

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:LI has achieved a 6:

The Return On Assets of LI (6.57%) is better than 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 85.00% of the companies in the same industry.
LI has a Return On Invested Capital of 5.78%. This is amongst the best in the industry. LI outperforms 82.50% of its industry peers.
LI's Profit Margin of 7.16% is amongst the best of the industry. LI outperforms 85.00% of its industry peers.
LI has a Operating Margin of 4.48%. This is in the better half of the industry: LI outperforms 80.00% 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.

Looking at the Setup

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the level of consolidation in the stock based on multiple short-term technical indicators. Currently, NASDAQ:LI has a 7 as its setup rating, indicating its current consolidation status.

LI has a bad technical rating, but it does show a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. There is a resistance zone just above the current price starting at 23.61. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 23.44, a Stop Loss order could be placed below this zone.

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

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

Our latest full technical report of LI contains the most current technical 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.