Xpeng Stock Is a Great Long-Term Buy After Impressive Q1 Results


EV maker Xpeng (NASDAQ:XPEV) is firing on all cylinders. Despite going public only last year, XPEV stock is considered one for the long term. Investors who bought the stock immediately after the IPO have made massive gains in the past year.

Xpeng logo and P7 model in store XPEV stock
Source: Andy Feng / Shutterstock.com

Electric vehicles play a huge role in the transition towards an eco-friendly lifestyle and EV stocks generally are gearing up for massive tailwinds in the long run.

The demand for EVs is rising across the world and the support from the government in the form of regulations and subsidies will enhance EV development.

XPEV stock is far from its peak today. The stock hit an all-time high of $74 in November 2020 and is trading at about $28.50 currently.

It showed some volatility due to chip shortage but I believe that this dip is a great time to make the move and add this EV stock to your portfolio. Let’s take a look at the stellar fundamentals of the company.

Blow Out Q1 results

XPeng has had a great start to the year and the Q1 results are proof. The company reported a revenue of $450.4 million for the quarter which is a 616% rise from the same period the previous year. The gross margin was 11.2% as compared to a negative 4.8% in the previous year.

The company reported a net loss of $120.1 million and a net loss per share of $0.13, beating analyst estimates.

Achieving a 600% rise in revenue in a year is no mean feat. It shows the company’s ability to scale and meet the demands of the consumers. Xpeng has a product portfolio that appeals to the various needs of consumers.

For the next quarter, the company expects a rise of 475% in revenue and vehicle deliveries between 15,000 and 16,000 vehicles representing a 380% rise year over year. The revenue estimate shows that the company is strongly positioned in the market and working towards the long-term strategic plan of expanding its market share.

Impressive Delivery Numbers

XPeng reported record-breaking delivery numbers for April, while the sales of Tesla (NASDAQ:TSLA) declined by 27% in the past month.

The company delivered 13,340 vehicles in the first quarter. It is a 487% increase from the same period 2020 and a 3% increase from the fourth quarter. Despite the chip shortage, XPeng has managed to rake in some huge numbers.

It delivered 5,147 units in April showing a 285% rise year over year. The year-to-date deliveries as of April 30 stood at 18,487 units recording a 412% rise year over year. Improved leverage from high delivery numbers can lead to higher revenue and take the company closer to profitability.

Another positive for the company is its continual expansion of charging networks across China. The company’s own brand charging network across China has reached 1,140 stations across 164 cities.

It is the first EV maker in China to offer free charging services to customers. It complements the convenience and flexibility offered to the wide range of customers across China. XPeng recently launched 12 charging stations on the Sichuan-Tibet expressway.

The Final Word on XPEV Stock

The fundamentals and delivery numbers of XPeng are robust and they will take XPEV stock higher. It remains a hot EV stock and should be a part of your portfolio.

The company has marked its presence in the EV industry and as it continues to grow and report strong delivery numbers, the stock is only going upward. There is nothing to worry about the financial stability of XPeng.

With another strong quarter, the company is only proving its worth in the competitive EV industry. With multiple tailwinds in play, the stock is poised to have a wonderful 2021.

In short, XPEV stock is an excellent EV stock to own.

On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Article printed from InvestorPlace Media, https://investorplace.com/2021/05/xpev-stock-is-a-great-long-term-buy-after-impressive-q1-results/.

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