- Li Auto produced Q1 earnings before the open on Tuesday.
- LI beats on earnings but guidance disappoints.
- The Chinese EV company stock was also named by the SEC for potential delisting.
Li Auto (LI) stock is stronger in Tuesday's premarket as the electric automaker released Q1 earnings ahead of Wall Street estimates. LI stock fell though heavily on Monday by over 9%, so this may be partly a relief rally. The stock has come under intense pressure this year as the EV sector suffers.
The SEC has added to that pressure by adding Li Auto to its list of stocks that may be potentially forced to delist from the US markets due to failure to comply with the Holding Foreign Companies Accountable Act. The SEC expanded the list this week and included EV names Li, Xpeng (XPEV), and NIO. Li Auto stock is down 41% so far in 2022.
Li Auto (LI) stock news: Relief rally might be overdone
Li Auto (LI) reported earnings before the open. Revenue totaled $1.5 billion and was marginally ahead of estimates. Earnings per share (EPS) came in at $0.07 versus estimates for $0.03. Deliveries for the first quarter reached 31,716 vehicles and margins grew to nearly 23% from 17% a year ago.Q2 revenue and delivery forecasts were weak though. Revenue is forecast for Q2 at $970 to $1.1 billion versus estimates at $1.75 billion.
China has seen increasing lockdowns hitting production and supply chains as well as demand. As mentioned, Li Auto stock is up 5% in Tuesday's premarket. We feel this is overdone based on revenue estimates being way below forecasts. The threat of delisting also hangs over the stock.
Li Auto (LI) stock forecast: Dismal outlook on US delisting fears and EV sector issues
A strong performance from LI stock, but terrible outlook. Add this to delisting fears and we feel there is just too much risk here. We also have Chinese car data out this morning showing sales of new energy vehicles fell 38% in April versus March.
LI stock daily price chart
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