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Xpeng Inc. – The pullback is likely

Xpeng Inc is a Smart Electric Vehicle company designing, developing, manufacturing, and marketing smart electric vehicles in China. The company manufactures environmentally-friendly vehicles, namely an SUV (the G3) and a four-door sports sedan (the P7). It targets the mid-to-high-end segment in China's passenger vehicle market.

Xpeng Inc.

Xpeng Inc is a Smart Electric Vehicle company designing, developing, manufacturing, and marketing smart electric vehicles in China. The company manufactures environmentally-friendly vehicles, namely an SUV (the G3) and a four-door sports sedan (the P7). It targets the mid-to-high-end segment in China's passenger vehicle market.

This hot EV stock is a new competitor for Tesla in the USA and NIO in China. The chart looks like an EV boom is over, but there could be a substantial opportunity in the mid to long-term. The Q4/2020 was powerful as the company beat top revenue estimates (436 mil USD vs. 404 mil USD estimates). In our estimation based on calculation, we aimed at a conservative target of 428 mil USD. EPS is much harder to count accurately because it can have extraordinary costs, which would highly impact EPS. For this reason, we aim at "revenue targeting."

Financial calculations of Xpengs company Source: Author's calculation

The company delivered strong growth, where Year-Over-Year (YoY) revenue increase in 2020 was 151.8%. Car model P7 Quarter-over-Quarter (QoQ) increased more than 37%. The company still has negative EPS but is expected to deliver substantial gains in 2021. Its balance sheet looks very strong as there are very liquid assets and small current liabilities. The company has enough current assets "as a startup" so it could face worsening financial conditions for some time without bigger damage. However, the demand is still robust for EV and its products.

Gross revenue and profit of Xpeng stock Source: Flourish, Author's calculations.

Price and latest news

Graph of XPENG stocks price with indicators Souce: Tradingview

Xpeng is in an extraordinary situation. In some statistical cases, the company has never been trading in current oversold conditions. Many factors: RSI ultra oversold, EMA spread between slow and fast-moving averages is extraordinary high, and so on. There are six consecutively weekly declines and five consecutively 3Days declines. The company tested the price of its first trading day on the CBOE market exchange from September and filled many gaps. There are some bullish narratives in the short term: Q4 revenue beat, Q1/2021 reliable guidance, and the latest one is the news for XPENG, NIO, and LI - should be added to the Hong-Kong stock exchange in the first half of 2021. Xpeng is still very oversold but is gaining positive momentum in the short-term. However, if the future price somehow hit 60 USD, we could ask about fair valuation (overvaluation).

WALFIR Technologies is one of the three divisions of WALFIR s.r.o., which is based in Slovakia. The primary interests of this division are analytical, quantitative, and algorithmic...

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