XPeng (XPEV) Q4 Earnings to Suffer Amid Soft Deliveries

XPeng Inc. XPEV is slated to release fourth-quarter 2022 results on Mar 17, before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s loss per American Depository Receipt (ADR) is pegged at 5 cents and implies a year-over-year improvement of 77.3%. The consensus estimate for loss has remained stable over the past 90 days.

XPeng Inc. Sponsored ADR Price and EPS Surprise

XPeng Inc. Sponsored ADR Price and EPS Surprise

XPeng Inc. Sponsored ADR price-eps-surprise | XPeng Inc. Sponsored ADR Quote

Q3 Highlights

In third-quarter 2022, XPeng’s adjusted losses per ADR of 36 cents were narrower than the consensus estimate of 46 cents. Revenues for the quarter were $0.96 billion, up 19.3% year over year on higher vehicle sales.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for China’s electric vehicle (EV) manufacturer for the quarter to be reported, as it does not have the right combination of the two key ingredients. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: XPeng has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate is in line with the Zacks Consensus Estimate.

Zacks Rank: It currently carries a Zacks Rank #3.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors at Play

XPeng delivered 5,101, 5,811 and 11,292 vehicles in October, November and December 2022, respectively, making a total of 22,024 deliveries for the to-be-reported quarter. The deliveries tanked 47.2% from the year-ago level of 41,751 units. This is likely to have hurt the firm’s revenues in the to-be-reported quarter.

In the last reported quarter, the company’s gross margins slid 0.9 percentage points from the year-ago levels. Persistent commodity cost inflation is likely to have dented XPeng’s fourth-quarter gross margins as well. Moreover, escalating operating expenses amid the launch of new models and expansion of the company's sales network have been denting profit levels over the past several quarters and the trend is likely to have continued in the fourth quarter of 2022.

Peer Releases

NIO Inc. NIO incurred a loss per American Depositary Share (ADS) of 51 cents in the fourth quarter of 2022, wider than the year-ago loss of 21 cents due to lower vehicle margins and higher operating expenses, despite improved deliveries. The company posted revenues of $2,329 million, up 62.2% year over year on the back of robust deliveries. The revenues generated from vehicle sales amounted to $2,139.9 million, rising 60.2% year over year. The increase in vehicle sales was mainly led by higher deliveries. Other sales amounted to $189.1 million, up 90.3%. The vehicle margin in the reported quarter declined to 6.8% from 20.9%.

Cash and cash equivalents totaled $2,883.4 million as of Dec 31, 2022. The long-term debt was $1,578.3 million as of the same date. For the first quarter of 2023, NIO expects deliveries in the band of 31,000-33,000 vehicles, signaling a year-over-year uptick of 20.3-28.1%. Revenues are envisioned between $1,584 million and $1,674 million, indicating a year-over-year increase of 10.2-16.5%.

Li Auto LI reported earnings per ADS of 13 cents for the fourth quarter of 2022 versus the Zacks Consensus Estimate of a loss of 19 cents. In the year-ago period, the firm had posted earnings of 68 cents a share. Revenues of $2.56 billion were up 66.2% year over year on higher vehicle sales. Li Auto delivered 46,319 vehicles in the fourth quarter, up 31.5% year over year. The revenues generated from vehicle sales amounted to $2.5 billion, rising 66.4% year over year. Other sales amounted to $55.3 million, up 55.9%. Vehicle margin came in at 20% in the quarter under review.

As of Dec 31, cash and cash equivalents were $5.57 billion. Total long-term debt was $1.33 billion. For the first quarter of 2023, Li Auto expects deliveries in the band of 52,000-55,000 vehicles, signaling a year-over-year jump of 64-73.4%. Revenues are envisioned between $2.53 and $2.68 billion, indicating a year-over-year rise of 82.5-93%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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