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XPeng Inc. (NYSE:XPEV) Just Reported First-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

As you might know, XPeng Inc. (NYSE:XPEV) just kicked off its latest quarterly results with some very strong numbers. Results overall were solid, with revenues arriving 6.5% better than analyst forecasts at CN¥6.5b. Higher revenues also resulted in substantially lower statutory losses which, at CN¥1.45 per share, were 6.5% smaller than the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for XPeng

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earnings-and-revenue-growth

Taking into account the latest results, the most recent consensus for XPeng from 38 analysts is for revenues of CN¥43.4b in 2024. If met, it would imply a huge 31% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 47% to CN¥5.29. Before this earnings announcement, the analysts had been modelling revenues of CN¥49.3b and losses of CN¥8.45 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue forecasts while also reducing the estimated losses the business will incur.

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The consensus price target was broadly unchanged at US$12.71, implying that the business is performing roughly in line with expectations, despite adjustments to both revenue and earnings estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic XPeng analyst has a price target of US$20.07 per share, while the most pessimistic values it at US$7.69. This is a very narrow spread of estimates, implying either that XPeng is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that XPeng's rate of growth is expected to accelerate meaningfully, with the forecast 43% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 26% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect XPeng to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. With that said, earnings are more important to the long-term value of the business. The consensus price target held steady at US$12.71, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on XPeng. Long-term earnings power is much more important than next year's profits. We have forecasts for XPeng going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for XPeng that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.