Why Analysts See Li Auto’s Story Shifting Amid Valuation Cut And Global Expansion Uncertainty
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Li Auto’s latest valuation update reflects a lower Fair Value Estimate, cut from $28.09 to $24.43 per share, even as analysts grow more optimistic about the company’s long term revenue trajectory. A slightly higher discount rate, up from 11.58% to 11.66%, underscores a cautious reassessment of risk against this stronger top line outlook. Stay tuned to see how investors can track these shifting assumptions and keep up with the evolving narrative around Li Auto stock.
Piper Sandler’s Alexander Potter sees enough long term potential to initiate coverage at a Neutral rating with a $19 price target, signaling that Li Auto’s current execution and growth trajectory justify a baseline valuation rather than an outright negative stance.
The research note highlights the structural advantages some Chinese auto and electronics players enjoy through electronics self reliance, a backdrop that can support Li Auto’s cost control and product development efforts if effectively leveraged over time.
🐻 Bearish Takeaways
Piper Sandler underscores China’s auto market as characterized by cutthroat competition and extreme policy risk, a combination that can cap valuation multiples and inject volatility into Li Auto’s growth and margin outlook.
The firm is explicitly iffy on Li Auto’s global strategy, suggesting that successful expansion outside China is critical to justifying upside from current levels and that missteps abroad could limit both execution quality and long term growth prospects embedded in the stock.
Li Auto issued fourth quarter 2025 guidance calling for vehicle deliveries of 100,000 to 110,000 units, implying a year over year decline of 37% to 30.7%, and total revenue of ¥26.5 billion to ¥29.2 billion, down 40.1% to 34.2%. Management also noted that forecasts may shift as market conditions evolve.
The company scheduled a board meeting for November 26, 2025 to review and approve unaudited financial results for the quarter ended September 30, 2025, ahead of their public release.
Li Auto officially launched the Li i6, a five seat battery electric SUV priced at ¥249,800 for the standard configuration, with initial customer deliveries slated to begin on September 27, 2025.
Fair Value Estimate has fallen from $28.09 to $24.43 per share, reflecting a moderate downward revision in long term intrinsic valuation.
Discount Rate has risen slightly from 11.58% to 11.66%, indicating a marginally higher required return and perceived risk profile.
Revenue Growth has increased from 15.16% to 18.23%, signaling a more optimistic view of Li Auto’s top line expansion over the forecast period.
Net Profit Margin has edged up from 6.45% to 6.56%, suggesting a modest improvement in expected long term profitability.
Future P/E Multiple has declined from 20.1x to 17.8x, implying a lower valuation multiple being applied to earnings despite stronger growth and margin assumptions.
Narratives turn raw numbers into a clear story, connecting your view of a company’s future revenue, earnings, and margins to a Fair Value and an explicit buy or sell stance. On Simply Wall St’s Community page, millions of investors use Narratives to link a company’s strategy to a forecast, then compare Fair Value to the current price. As news, launches, or earnings arrive, Narratives update dynamically, making it an accessible, always on guide to when expectations and reality diverge.
Track how Li Auto’s shift from EREVs to premium BEVs and smart driving tech could drive market share gains and recurring high margin software revenue.
See how network buildout, charging innovation, and early global expansion feed into forecast revenue growth, margin improvement, and a future P/E of 17.8x.
Monitor key risks, from heavy R&D and capex to intense EV competition and regulatory shifts, and how they change the gap between Fair Value and the current share price.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include LI.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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