XPeng shares are down about 46% this year, far worse than the 5% drop in the S&P 500.
Hector Retamal/AFP via Getty Images
Chinese electric vehicle maker XPeng will report fourth quarter numbers Monday morning. Weary investors will be looking for good news. They might not get it.
Coming into the report, XPeng (ticker: XPEV) stock has been badly beaten up. Shares are down about 46% year to date, far worse then the 5% and 4% comparable, respective drops of the S&P 500 and Dow Jones Industrial Average.
Rising interest rates and inflation have sapped some investor willingness to hold richly valued high growth stocks. But that isn’t all that’s happened to Chinese EV makers. Stock in EV leader Tesla (TSLA), after all, is only down about 4% year to date.
Fears about U.S. delisting of Chinese stocks is another issue. Fears started to rise again earlier in March after the SEC identified five U.S. listed Chinese firms that didn’t meet U.S. auditing requirements. None were Chinese EV makers.
And falling deliveries at XPeng, Li Auto (LI) and NIO (NIO) have also dented investor sentiment. EV deliveries hit records in China at the end of 2021, just before purchase incentives were cut. Combined deliveries came in around 20,000 units for February, down from more than 40,000 reported in December, although February includes the Chinese New Year holiday which skews comparability.
For XPeng’s fourth quarter, Wall Street is looking for a 38 cent per share loss from $1.28 billion in sales. Gross profit margins are expected to be about 12.6%, down from 14.4% reported in the third quarter of 2021. Falling deliveries and rising costs are two reasons margins are expected to come in a little.
Looking ahead, analysts project the company will deliver about 38,000 vehicles in the first quarter of 2022. XPeng delivered just over 19,000 vehicles in January and February combined, meaning analyst expect 19,000 delivered in March. That might be a high bar to clear given persistent supply chain problems such as semiconductor shortages.
XPeng delivered 16,000 vehicles in December. That was a record month for the auto maker.
Options markets imply the stock will move 10%, up or down, after earnings are reported. That is more volatile than trading following recent reports. Shares have moved an average of roughly 4%, up or down, following the past four quarterly reports. Shares have fallen three times and risen once after the past four reports.
NIO reported earnings this past week. First quarter delivery guidance missed Street expectations and shares fell 9.4%. That may have helped de-risk the XPeng quarter, however. XPeng shares dropped 7.6% Friday, the trading session after NIO reported figures.
Write to Al Root at [email protected]
