XPeng Earnings: XPEV stock soars 11% despite earnings miss

XPeng (XPEV) added 11.4% on Friday morning to trade near $9.30 after issuing quarterly earnings that missed analyst targets for the fourth quarter. Despite the misses on both top and bottom lines and forward guidance that showed a drop-off in deliveries, the electric vehicle company touted a cost-saving strategy that the market appeared to eat up.

XPeng stock news: Cost cuts are on the table, details are slim

XPeng reported adjusted EPS of $-0.37, which missed the $-0.35 consensus mark. Revenue of $750 million was $24.4 million below the Wall Street consensus and measured 40% less than the same period a year ago. Of course, sales were already expected to fall due to China's covid-related shutdowns during the fourth quarter.

Fourth quarter deliveries amounted to 22,204 vehicles, which was down a whopping 47% YoY. Its leading vehicle, the G9 SUV, made up nearly 6,200 of those deliveries. To make matters worse, gross margin dropped from 12% to 8.7% from the fourth quarter of 2021. 

"With the optimization of our product portfolio and the significant improvement of our marketing capabilities, we will resume growth in our sales and market share," said Dr. Hongdi Brian Gu, Honorary Vice Chairman and Co-President of XPeng. "In the meantime, we will improve operational efficiency across our business processes and continue to reduce costs."

Those costs seem quite necessary with the outlook management gave for the present first quarter. For Q1 managment expects about $595 million in revenue, which would be a 45% drop-off in revenue from the same quarter one year ago. Likewise, managmenet expects XPeng to deliver between 18,000 and 19,000 vehicles in Q1. This would mean a fall of 45% to 48% YoY.

The most positive news was that XPeng had expanded its charging stations to 1,014 and its stores to 420.

XPeng stock forecast

XPeng stock may be roaring ahead here on Friday, but do not get too excited. XPEV has faced a slew of lower highs over the past three months. This could be the fifth lower high in a row since December 5, 2022. Friday's session high appears to have sold off before even making it to resistance at $9.55. Without a break of $9.55, expect XPEV to dwindle over the next two months to support at $6.25 from last autumn.

XPEV daily chart