Ever since 2023 started, the electric vehicle (EV) market has been struggling in a climate of decreasing demand and increased competition. The trend continued into January 2024, and by the end of the month, as companies in the sectors appeared to be reaching for new all-time lows, many believed the bubble might finally be bursting.
Some companies fared significantly better than others, and there was a general trend for Chinese EV makers performing slightly better in the stock market than their American counterparts – a rather impressive feat given that the country’s markets found a reprieve from their 3-year $7 trillion fall only in early late January.
February, however, brought a radical change to the trend, and multiple electric vehicle companies started surging on both sides of the Pacific with Elon Musk’s Tesla (NASDAQ: TSLA), along with the Chinese BYD (SHE: 002594), Xpeng Inc (NYSE: XPEV) all finding themselves in the green in the last 30 days.
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Still, few had a surge as impressive as Li Auto (NASDAQ: LI, HKG: 2015), which, in late February, broke out and saw the EV maker surge more than 60% in the American exchange as well as in the Chinese one.
Why is Li Auto stock surging?
The main driver for the staggering surge Li Auto has been experiencing recently is its latest earnings report, which provided figures that significantly beat forecasts.
The February 26 filing revealed that Li accrued sales worth $5.8 billion for $0.60 earnings per share (EPS) – well above the expected sales of $5.5 billion and an EPS of $0.40.
The final trimester of 2023 also saw Li Auto’s operating margin rise to 7.3%, and the numbers only become more impressive when compared to the EV maker’s results only one year earlier when its sales, for example, amounted to $2.5 billion.
Li Auto stock price chart
While the bulk of Li Auto stock’s shooting up occurred in the wake of its earning report on February 26 – and indeed, the last 5 days of trading saw the EV maker’s shares rise 30.11% – LI has generally been doing well in recent weeks.
The latest 30 days, for example, saw the company rise a total of 62.62%. Li Auto stock’s year-to-date (YTD) chart, however, resembles a river bed as the company started 2024 on a decline and only started rising late in January.
Still, in total, LI shares are 30.93% in the green in the time frame.
Even longer term, Li Auto has been fairly well in the stock market as it spent much of 2023 either rising or trading sideways, and its brief decline started in earnest only very late in December. In the last 52 weeks, LI rose a total of 84.78%.
On the other hand, Li Auto closed 1.99% in the red on Wednesday, February 28 – the latest full trading day – at $45.29.
Li Auto stock 12-month price target
Given Li Auto stock’s strong performance, it isn’t surprising that the EV maker holds a “strong buy” rating on the stock analysis platform TipRanks and an average price target of $52.30.
In fact, none of the 4 experts represented on the platform rate LI shares as anything other than “buy,” the highest price target forecasting a surge to $63, and even the lowest foreseeing only a slight decline from Li Auto stock’s current value at $41.
It is also noteworthy that there have been no changes to forecasts and ratings for Li Auto stock since early February meaning the experts are yet to account for the EV maker’s most recent surge.
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