The XPeng stock price has remained in a tight range in the past few months as investors focus on its revenue growth and the health of the Chinese EV sector. XPEV was trading at $23, up from 105% from its lowest level this year. This article explores whether it is a good EV stock to buy today.
XPeng growth is accelerating
The Chinese electric vehicle industry is seeing strong growth this year, leading to major challenges for Western companies that dominated the market, like Volkswagen and BMW.
Local Chinese brands are doing well and are beating their Western rivals like Tesla. XPeng has been one of the fastest-growing companies in the industry.
The most recent delivery numbers showed that its deliveries rose by 95% in September as it crossed the important milestone of over 40,000 vehicles. Its quarterly deliveries rose by 149% to 116,007, bringing the cumulative total vehicles sold to 313,196.
Xpeng’s deliveries are growing because of the quality of its vehicles, including its advanced technology. It has also offered some promotional discounts as competition with companies like Nio, BYD, and Li Auto.
READ MORE: Xpeng CEO just loaded up on company shares: should you buy XPEV stock too?
This growth has translated in strong financial results, which analysts expect to continue accelerating in the coming years.
The most recent results showed that its revenue jumped by 125% in the second quarter to $2.5 billion. This growth was notable as Tesla, which was once the gold standard in the EV industry, has been shrinking in the past few quarters.
Xpeng’s gross margin continued growing, hitting 17% during the quarter, up from 14% from the same period last year.
Most importantly, the company’s losses continued narrowing during the quarter. Its net loss was $0.07 billion, a big improvement from the $180 million in the same period last year.
Analysts expect that the company’s revenue growth will accelerate in the coming years as it continues to gain market share in China and other countries, especially in Europe.
The average estimate is that the company’s revenue growth for the last quarter will be CNY 20.58 billion, up by 103% from the same period last year.
Its loss-per-share will be CNY 44 cents, a big improvement from the previous CNY 1.62. The annual revenue growth is expected to be CNY 80 billion, up by 96% from the same period last year. It will then make CNY 115 billion next year, when it will make a profit.
Xpeng stock price technical analysis
The daily timeframe chart shows that Xpeng share price has remained inside an ascending channel. It is now inside this ascending channel.
The stock has remained above the 50-day and 100-day Exponential Moving Averages (EMA). Also, the Relative Strength Index (RSI) and the MACD have pointed upwards.
Therefore, the most likely scenario is where the stock continues rising, with the key resistance level to watch being at $27.28, its highest level on March 11. A move below the support level at $20.85 will invalidate the bullish outlook and point to more downside.
READ MORE: XPeng stock price forms rare pattern points to a 125% surge
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