Li Auto releases earnings on Wednesday, and the stock can break out from a recent range.
LI – Weekly Chart
The price of LI has been trading in a very tight range, and this earnings report will determine whether we return to support or breakout higher.
Chinese EV makers BYD and Li Auto are set to release second-quarter earnings early on Wednesday. The Q2 earnings will come out a few days before BYD, Li Auto, and its rivals report August sales. BYD will release its August deliveries on Sept. 1-2, while the other firms will report around that date.
Last week, XPeng and Zeekr reported earnings, highlighting another quarter of losses, although both firms had strong revenue growth. BYD and Li Auto stand out because both firms are profitable.
Analysts expect BYD to post earnings of 43 cents a share, up 34% from a year ago. At the same time, revenue is seen moving higher by 28% to $24.58 billion.
Analysts expect 17 cents for Li Auto, down 53% from a year ago. That would be the second successive year-over-year drop since a 342% surge in Q4 2023. Revenue is expected to grow by almost 12% to $4.4 billion.
Li Auto sales were well below its previous targets earlier this year. Some of that is being driven by increased competition in the EV space. There was also disappointing demand for its first all-battery electric vehicle, the Mega minivan, launched in March.
July sales hit a record 51,000, up 49.4% from a year earlier and 6.75% from June, thanks to Li’s incentives and new Chinese government subsidies. Expectations for more robust deliveries have been pulled back recently.
Analysts will now be focused on management guidance for sales for the rest of the year. The stock is poised at resistance, and a strong quarter could see a higher breakout. Any disappointment would take the price back to support.
