There’s a pretty good chance that you’ve never thought about investing in China-based electric vehicle (EV) manufacturer Li Auto (NASDAQ:LI) before. Today, you’re invited to open your mind and possibly even start a position in LI stock. After delving into the data, you’ll surely be convinced that Li Auto is currently undervalued and underappreciated on Wall Street.
Li Auto’s growth story has been hampered by supply chain constraints, global inflation and other issues. Amid this challenging backdrop, it’s understandable if you’re reluctant to risk your investable capital on an EV startup like Li Auto.
Don’t dismiss Li Auto until you’ve learned more about the company, though. Within the next couple of years, you might see nearly a dozen Li Auto vehicle models on the roadways — and you may regret it if you didn’t take a share position in 2023.
Li Auto to Expand EV Model Lineup and Charging Station Network
This looks like potentially game-changing news in the new-energy vehicle space. Yet, it seems like some financial traders didn’t catch wind of it. Specifically, Li Auto intends to increase its lineup of EV models from four to 11 by the year 2025.
We don’t have all of the details yet, so it will be exciting to see what Li Auto comes up with. However, Li Auto President Ma Donghui did reveal that the new and expanded vehicle lineup will “include one flagship model, five range-extended electric models and five high-voltage pure electric models.”
If Li Auto can offer a wide range of price points and vehicle types, the company should be able to increase its sales figures. Furthermore, Li Auto has an opportunity to generate robust revenue through its growing network of charging stations.
By 2025, Li Auto “aims to build more than 3,000 supercharging stations across China,” Reuters reported. This, amazingly, would cover 90% of China’s “major cities and highways.”
EV Sales Surge Is Bullish for LI Stock
By now, you should already be convinced of Li Auto’s growth story through the year 2025. If not, I invite you to take a glance at the company’s jaw-dropping first-quarter 2023 results.
There’s so much positive data packed into Li Auto’s quarterly report, it is hard to know where to start. So, I’ll make it easier for you by condensing the most notable results into a handy bulleted list. The following data points represent Li Auto’s Q1 2023 results and year-over-year increases:
- 52,584 vehicle units delivered, up 65.8%
- 18.33 billion RMB ($2.67 billion) in vehicle sales, up 96.9%
- 18.79 billion RMB ($2.74 billion) in total revenue, up 96.5%
- 933.8 million RMB ($136 million) in net income, versus a net loss of 10.9 million RMB in the year-earlier quarter
- 6.7 billion RMB ($975.9 million) of free cash flow, compared to 502 million RMB of free cash flow in 2022’s first quarter
Furthermore, Li Auto reported quarterly earnings per U.S.-listed American depositary receipt (ADR) of 21 cents. That result handily beat the analyst consensus estimate of 10 cents.
Additionally, Li Auto provided an ambitious current-quarter outlook that involves a year-over-year vehicle delivery increase of 164.9% to 182.4%. Li Auto also guided for year-over-year total revenue improvement of 177.4% to 196.1%.
So, Here’s My LI Stock Price Prediction for 2025
Given all of those mind-blowing stats, it’s shocking that Li Auto isn’t top-of-mind on Wall Street. That’s fine, however, as it presents an opportunity to make Li Auto a secret growth driver for your portfolio.
Given the company’s astounding sales and income trajectory, I expect LI stock to easily top $50 in 2025. That might actually be too conservative an estimate. However, I believe it’s better to be cautious than greedy. So, feel free to start a small but confident share position in a fast-expanding EV standout, Li Auto.
On the date of publication, David Moadel 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.