Today we're going to take a closer look at Large-Cap Consumer Discretionary company Li Auto, whose shares are currently trading at $24.31. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!
an Exceptionally Low P/B Ratio but Priced Beyond Its Margin of Safety:
Li Auto Inc. operates in the energy vehicle market in the People's Republic of China. The company belongs to the Consumer Discretionary sector, which has an average price to earnings (P/E) ratio of 20.93 and an average price to book (P/B) ratio of 2.93. In contrast, Li Auto has a trailing 12 month P/E ratio of 23.4 and a P/B ratio of 0.34.
Li Auto has moved -7.5% over the last year compared to 9.8% for the S&P 500 — a difference of -17.3%. Li Auto has a 52 week high of $33.12 and a 52 week low of $17.44.
Wider Gross Margins Than the Industry Average of 15.91%:
| 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|
| Revenue (M) | $1,449 | $4,238 | $6,566 | $17,444 |
| Gross Margins | 16% | 21% | 19% | 22% |
| Net Margins | -2% | -1% | -4% | 10% |
| Net Income (M) | -$23 | -$50 | -$295 | $1,663 |
| Net Interest Expense (M) | $10 | $29 | $91 | $148 |
| Depreciation & Amort. (M) | $49 | $93 | $176 | $254 |
| Diluted Shares (M) | 8,700 | 1,853 | 1,941 | 2,115 |
| Earnings Per Share | -$0.0 | -$0.03 | -$0.15 | $0.78 |
| EPS Growth | n/a | n/a | -400.0% | 620.0% |
| Free Cash Flow (M) | $378 | $768 | $327 | $6,224 |
| CAPEX (M) | $103 | $541 | $743 | $917 |
| Total Debt (M) | $78 | $2,418 | $4,355 | $9,517 |
| Net Debt / EBITDA | 24.19 | -28.44 | 8.93 | -1.94 |
| Current Ratio | 7.28 | 4.33 | 2.45 | 1.57 |
Li Auto has rapidly growing revenues and increasing reinvestment in the business, exceptional EPS growth, and generally positive cash flows. The company also benefits from wider gross margins than its peer group, a decent current ratio of 1.57, and healthy leverage levels.
