Exploring the Growth Potential of NASDAQ:LI as It Nears a Breakout.

In this article we will dive into LI AUTO INC - ADR (NASDAQ:LI) as a possible candidate for growth investing. Investors should always do their own research, but we noticed LI AUTO INC - ADR showing up in our strong growth, ready to breakout screen, which makes it worth to investigate a bit more.

Understanding NASDAQ:LI's Growth

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NASDAQ:LI boasts a 8 out of 10:

• 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.
• Based on estimates for the next years, LI will show a very strong growth in Revenue. The Revenue will grow by 20.25% on average per year.

Health Analysis for NASDAQ:LI

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 has a better Debt to FCF ratio (0.39) than 100.00% of its industry peers.
• A Debt/Equity ratio of 0.13 indicates that LI is not too dependend on debt financing.
• With a decent Debt to Equity ratio value of 0.13, LI is doing good in the industry, outperforming 78.95% of the companies in the same industry.
• LI's Current ratio of 1.76 is fine compared to the rest of the industry. LI outperforms 65.79% of its industry peers.
• The Quick ratio of LI (1.64) is better than 78.95% of its industry peers.

Understanding NASDAQ:LI's Profitability

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:LI was assigned a score of 6 for profitability:

• LI has a Return On Assets of 6.57%. This is amongst the best in the industry. LI outperforms 94.74% of its industry peers.
• With an excellent Return On Equity value of 15.27%, LI belongs to the best of the industry, outperforming 89.47% of the companies in the same industry.
• With an excellent Return On Invested Capital value of 5.78%, LI belongs to the best of the industry, outperforming 84.21% of the companies in the same industry.
• The Profit Margin of LI (7.16%) is better than 84.21% of its industry peers.
• LI has a better Operating Margin (4.48%) than 78.95% of its industry peers.
• The Gross Margin of LI (21.47%) is better than 81.58% of its industry peers.
• LI's Gross Margin has improved in the last couple of years.

How does the Setup look for NASDAQ:LI

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NASDAQ:LI currently has a 7 as setup rating:

Although the technical rating is only medium, LI does present a nice setup opportunity. Prices have been consolidating lately. A pullback is taking place, which may present a nice opportunity for an entry. There is a resistance zone just above the current price starting at 26.18. Right above this resistance zone may be a good entry point.

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.

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.