• Xpeng reported EPS of $-0.28 on $1.18 billion, both beats.
  • Covid-19 shutdowns are leading to reduced deliveries in current quarter.
  • XPEV may drop to long-term support at $17.12.

Xpeng (XPEV), the Chinese electric vehicle maker, announced first quarter earnings before the bell that beat consensus forecasts. The Guangzhou-based manufacturer reported earnings per share (EPS) of $-0.28 on revenue of $1.18 billion. Despite the beat, XPEV shares remain down 2.5% at $22.68.

Wall Street had expected $-0.30 in EPS on revenues of $1.11 billion. April delivery figures released earlier this month showed that though XPeng had seen year-to-date deliveries climb 136% YoY, April deliveries dropped 42% over the previous month due to supply chain shortages caused by China's Covid-19 shutdowns. In comparison, EV competitors Nio (NIO) and Li Auto (LI) had MoM declines of 50% and 62%, respectively.

For the second quarter, XPeng sees deliveries between 31,000 and 34,000, which is below the 34,561 units delivered in Q1.

XPEV stock continues to suffer from tepid interest in the US market as the company was placed on the Securities & Exchange Commission's (SEC) 88-member list of stocks that are in danger of being delisted. If XPeng fails to meet the SEC's criteria for proper auditing by May 25, then it gets placed on a three-year probationary period before being outright delisted. Investors are also watching for whether the Chinese government extends subsidies for EV purchases into 2023. As of now, they are slated to be suspended at the end of this year.

XPeng Stock Forecast: Flat guidance could send XPEV down to $17

XPEV stock seems unlikely to gain any ground due to this earnings call, because the guidance is the most important aspect of any earnings release. With deliveries falling for Q2 due to the Covid-19 shutdowns of April and May, it seems like most traders will take a wait-and-see approach. 

Most likely, since XPEV has already lost the $23 level of support, shares may droop over the next month to support at $17.12, which held in September 2020. The Moving Average Convergence Divergence (MACD) has crossed over the signal line, but it would be better to wait until it crosses above the 0 threshold. 

 

XPEV daily chart


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