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XPeng (NASDAQ:XPEV) Q3 Earnings Preview: Here’s What to Expect

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XPeng is scheduled to report its third-quarter results on November 30. The company’s performance is likely to have been affected by elevated lithium prices and other macro challenges.

Chinese electric vehicle (EV) maker XPeng (NYSE:XPEV) is scheduled to report its third-quarter results on November 30, before the market opens.

Currently, the Street expects XPeng to post a loss of $0.33 per share in Q3, compared with a much higher loss of $1.89 per share reported in the prior-year period. Meanwhile, revenue is expected to register year-over-year growth of nearly 27% to $1.01 billion.

The resurgence of COVID-19 in China led to strict lockdown measures by the Chinese government. This is likely to have impacted the company’s production capacity in the quarter.

Further, performance in the quarter is likely to have been marred by persistent geopolitical tensions, along with intense competition from peers.

Nevertheless, XPeng’s third-quarter vehicle delivery report was encouraging. The company made total deliveries of 29,570 vehicles at the end of Q3, up 15% year-over-year. This is expected to have supported the top-line growth of XPeng.

Analyst Trims Price Target Ahead of Q3 Earnings 

Jefferies analyst Johnson Wan lowered the price target on XPeng to $4.20 from $18.60 and downgraded the rating on the stock to Sell from Hold. The analyst expects the company’s future margins to decline due to rising lithium prices and the expectation of the removal of EV subsidies by the Chinese government.

Also, Wan is of the opinion that the price cuts announced by Tesla (NASDAQ:TSLA) may be a challenge for XPeng, as some of its models are in direct competition with Tesla’s cars.

Is XPEV Stock a Buy? 

Overall, XPeng has a Moderate Buy consensus rating based on six Buys, one Hold, and two Sells. The average XPEV stock price target of $17.71 implies 157.04% upside potential. The stock has tumbled nearly 86.3% year-to-date.

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