XPeng Inc. (NYSE:XPEV) Consensus Forecasts Have Become A Little Darker Since Its Latest Report
There's been a notable change in appetite for XPeng Inc. (NYSE:XPEV) shares in the week since its yearly report, with the stock down 12% to US$8.52. Despite revenues of CN¥31b falling 2.9% short of expectations, statutory losses of CN¥11.92 per share were well contained, and in line with analyst models. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for XPeng
Taking into account the latest results, the most recent consensus for XPeng from 34 analysts is for revenues of CN¥49.9b in 2024. If met, it would imply a substantial 63% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 23% to CN¥8.49. Before this earnings announcement, the analysts had been modelling revenues of CN¥56.8b and losses of CN¥8.04 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.
The consensus price target fell 11% to US$14.65, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values XPeng at US$28.21 per share, while the most bearish prices it at US$7.27. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting XPeng's growth to accelerate, with the forecast 63% annualised growth to the end of 2024 ranking favourably alongside historical growth of 45% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that XPeng is expected to grow much faster than its industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at XPeng. They also downgraded XPeng's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of XPeng's future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple XPeng analysts - going out to 2026, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 2 warning signs for XPeng that you need to be mindful of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
