Chinese start-up Xpeng (NYSE:XPEV) has recently joined a growing list of red-hot names in the electric-vehicle (EV) space. Perhaps you could even say that XPEV stock was too hot to handle, as the share price rocketed upwards but is now retracing.
So, what propelled XPEV so high only for it to run out of juice in late November? That’s the billion-dollar question. Suffice it to say, there are a multitude of factors at play here, including the overall market sentiment surrounding EVs.
One thing that I can say with certainty, though, is that XPEV stock is a fast mover. On the afternoon of Nov. 25, the share price was down roughly 9%. That’s actually a typical day for this name, so prepare for a bumpy ride if you’re going to take a position.
So, is the recent share-price dip worth your consideration, or are holders in this stock destined for more losses ahead? Buckle up as we explore one of the speediest stocks in the burgeoning EV space.
A Closer Look at XPEV Stock
Although Xpeng originally sold 100 million American depository receipts (ADRs) for $15 apiece, most retail traders never really had a chance to own XPEV stock at that price.
That’s because when XPEV debuted on the New York Stock Exchange, the share price quickly pushed up through the $21 level.
And the growth spurt didn’t end there. On Nov. 24, XPEV stock reached a startling 52-week high of $74.49. However, just two days later, Xpeng was down to $63 and change midday. As of today, it’s trading around $53.
But if you’re planning on waiting for the stock to pull back to $25 or even $50, you might never get to buy the shares. The trend is still firmly on the upside and the recent dip could be your best passport to profits with this EV maker.
A Real Eyecatcher
One thing that analysts rarely talk about when discussing next-generation vehicles is their appearance. Like it or not, looks matter when people buy cars.
On that front, I actually believe that Xpeng is a leader in the looks department. If you’re on the fence when it comes to XPEV stock, I invite you to take a look at the company’s P7 Wing Limited Edition.
The company describes the P7 as a “super-long range sports sedan,” but I would describe it as totally awesome. The doors look like bat wings and they rotate upwards when opened. And, by the way, there are five different ways to unlock them, only one of which involves a car key.
But Xpeng is not just flash. If you’d prefer something more sensible, check out the G3. The features include intelligent auto-parking, AI (artificial intelligence) voice interaction and more.
Clearly, the company is designing vehicles with both practicality and style in mind.
Results over Politics
In seeking a reason to own XPEV stock, some commentators might point to the incoming Joe Biden administration that will presumably be friendly toward clean-energy vehicles. They might also suggest that the new administration will have friendlier trade relations with China. Of course, that could hypothetically benefit Xpeng.
However, I believe we don’t need to look to politics for a reason to buy and hold XPEV stock today. Sure, the share-price dip offers a more favorable entry point. But the sales figures offer even more encouragement to prospective shareholders.
According to Xpeng’s third-quarter unaudited financial results, the company delivered 8,578 vehicles over three months. Amazingly, this represents a nearly 266% increase compared to the 2,345 vehicles delivered in the year-ago quarter.
Moreover — as InvestorPlace contributor William White reported — Xpeng’s third-quarter revenues showed a whopping 342.5% improvement compared to the same period of the prior year. Those are some promising results.
Political catalysts might favor a long position in XPEV stock. However, in my opinion those factors aren’t even necessary for optimistic investors.
For one, the sales and revenue figures can’t be argued with. And frankly, Xpeng’s cars just look awesome. What more could you ask for?
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
David Moadel has provided compelling content -and crossed the occasional line -on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.