XPeng (XPEV) -- Profitable or Not?

Does large-cap Auto Manufacturers company XPeng have a sustainably profitable business model? By studying its gross margins and comparing them to its operating margins, we can gain insight into quality of its business. With gross margins at 12.7%, you might be telling yourself the XPeng is profitable — but there could be more to the story.

Date Reported Revenue ($) Cost of Revenue ($) Gross Margins (%) YoY Growth (%)
2021-12-31 20,988,131,000 18,330,987,000 12.66 124.87
2020-12-31 5,844,321,000 5,515,081,000 5.63 127.29
2019-12-31 2,321,219,000 2,800,175,000 -20.63 15.21
2018-12-31 9,706,000 12,067,000 -24.33 n/a

By reviewing several years of XPeng's income statemet, we can see that, although gross margins are currently positive, the company has on average lost money on each of its sales with an average gross margin of -6.7%. Cost of revenue has been changing at a rate of 11829.9%, while its revenues have a growth rate of 8075.4%. As a result, gross margins have a delta of 89.1%.

Date Reported Total Revenue ($) Operating Expenses ($) Operating Margins (%) YoY Growth (%)
2021-12-31 20,988,131,000 27,665,803,000 -31.82 56.04
2020-12-31 5,844,321,000 10,074,806,000 -72.39 54.6
2019-12-31 2,321,219,000 6,022,608,000 -159.46 99.09
2018-12-31 9,706,000 1,704,340,000 -17459.7 n/a

The table above tells us that, on average, XPeng has not been profitable over the last four years, which should be a warning sign to prospective investors. One bright spot, however, is that the company's operating margins are growing at an average yearly rate of 69.9%.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.