One-glance verdict
Undervalued
$82.62 our estimate vs market $11.12
Wall Street consensus: $15.16 (-81.7% lower than our fair-value estimate)
87% below our estimate, below the bear case
Fundamentals snapshot
Li Auto Inc.
LI · NMS · Consumer Cyclical · Auto Manufacturers
Current price
$11.12
52-week range
$11.09 - $25.39
Market cap
$10.87B
Balance sheet
Healthy
-3.10x Concerning
Net cash $10.58B. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
3 Risks
1 rewards · 3 risks
- Reward Free cash flow was positive in 5/10 years.
- Risk Insider ownership is only 0.0% (peer median: 15.4%).
- Risk Return on equity was -6.6% last year — the company lost money on shareholders' equity.
- Risk Operating margin compressed from -8.1% to -8.5% over 3 years.
What this company does
Li Auto Inc.
Li Auto is a Chinese company that builds and sells high-end electric vehicles, mainly family-sized SUVs. Its income comes almost entirely from selling these cars, which stand out because they include a small gas generator that can recharge the battery on the go. This unique feature helps drivers overcome "range anxiety" (the fear of running out of electric power on a long trip), making the cars a popular choice in China.
How the company got here
Li Auto was started in 2015 by a successful tech entrepreneur named Li Xiang. He wanted to solve a big problem for electric car buyers in China: 'range anxiety,' which is the fear of running out of battery power on a long trip. The company's first car, the Li ONE, was an electric SUV with a small gasoline engine that could charge the battery, giving drivers peace of mind. This unique approach was very popular with Chinese families, and the company grew quickly, eventually listing its shares on the Nasdaq stock exchange in the U.S. in 2020.
What it actually does
Li Auto designs, builds, and sells premium smart electric vehicles, primarily for families in China. Think of them as high-tech, spacious cars that run on electricity, with a focus on safety and comfort. Their vehicles are known for having advanced features, like smart driving assistance and voice controls. Besides selling cars, the company also provides related services like installing home charging stations and offering after-sales maintenance.
Vehicle Sales
This is the main way Li Auto makes money, accounting for the vast majority of its income. The company sells different models of electric vehicles, including large SUVs (Sport Utility Vehicles) and MPVs (Multi-Purpose Vehicles, which are like minivans). Customers, who are typically families in China, pay for the cars themselves. This part of the business is the company's entire focus and generates almost all of its revenue (the total money it brings in).
Services and Other
This is a much smaller, but growing, part of Li Auto's business. It includes things like selling charging stations for customers' homes, providing vehicle maintenance and repairs, and other services related to owning one of their cars. While it only makes up a small fraction of the company's total revenue (the total money it brings in), it's an important part of the overall customer experience.
What management is betting on now
The company's leadership is focused on expanding its line of vehicles to attract more customers. A key part of their strategy is to offer both their signature extended-range electric vehicles and fully battery-powered models. They are also investing heavily in their own technology, such as self-driving features and super-fast charging networks, to make their cars more appealing. Additionally, Li Auto is beginning to expand its sales into markets outside of China, starting with the Middle East.
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$1.12B
FY2025 Q4
$-1.83B
Revenue
$16.06B
Net income
—
Diluted EPS
0.08
Operating cash flow
$-1.23B
Free cash flow
$-1.83B
Fetching…
Sources
Revenue
$19.79B
Net income
—
Diluted EPS
0.52
Operating cash flow
$2.18B
Free cash flow
$1.12B
Fetching…
Sources
Is it cheap or expensive?
Fair value $82.62 vs current price $11.12
Wall Street consensus is the average analyst price target: $15.16 (-81.7% lower than our fair-value estimate).
Our most-likely fair value is $82.62 a share — about 643.0% above today's price of $11.12, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $10.6B - more cash than debt. Interest coverage -3.1x.
Net debt
$-10.58B
Interest coverage
-3.10x
Li Auto Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 5 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
LI
BASELINE
Li Auto Inc.
Total debt $2.19B Interest coverage -3.10x This is the baseline the peer rows are being compared against.
Total debt $4.33B Interest coverage -15.86x Neither company has much profit cushion over interest right now.
Total debt $4.01B Interest coverage -6.99x Neither company has much profit cushion over interest right now.
Total debt $5.35B Interest coverage -13.08x Neither company has much profit cushion over interest right now.
Total debt $3.66B Interest coverage -36.82x Neither company has much profit cushion over interest right now.
Total debt $6.02B Interest coverage -5.29x Neither company has much profit cushion over interest right now.
What you should know
The case for and against LI
1 Reward
3 Risks
Rewards
-
Free cash flow was positive in 5/10 years.
Risks
-
Insider ownership is only 0.0% (peer median: 15.4%).
-
Return on equity was -6.6% last year — the company lost money on shareholders' equity.
-
Operating margin compressed from -8.1% to -8.5% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
—
Forward P/E
20.06x
P/B
1.12x
P/S
0.10x
EV/EBITDA
53.04x
PEG ratio
4.19x
Profitability
How much profit each dollar creates
Gross margin
13.6%
Operating margin
-8.5%
Net margin
-4.4%
ROE
-6.6%
ROA
-2.8%
Health
Liquidity and balance-sheet strength
Debt / equity
0.22x
Current ratio
1.81x
Quick ratio
1.57x
Total debt
$2.19B
Total cash
$12.78B
Growth
How the business has been compounding
Revenue TTM
$59.86B
Revenue 5Y CAGR
39.5%
EPS TTM
-0.67
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$9.16B
Free CF TTM
$-1.83B
FCF margin
-3.1%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
—