Li Auto Inc. (NASDAQ:LI) Stock Has Shown Weakness Lately But Financials Look Strong: Should Prospective Shareholders Make The Leap?

Simply Wall St.11-18

It is hard to get excited after looking at Li Auto's (NASDAQ:LI) recent performance, when its stock has declined 10% over the past month. However, a closer look at its sound financials might cause you...

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(NASDAQ:LI) Stock Has Shown Weakness Lately But Financials Look Strong: Should Prospective Shareholders Make The Leap?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-18 19:19 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/li-auto-inc-nasdaq-li-111944010.html><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>It is hard to get excited after looking at Li Auto's (NASDAQ:LI) recent performance, when its stock has declined 10% over the past month. However, a closer look at its sound financials might cause you...</p>\n\n<a href=\"https://finance.yahoo.com/news/li-auto-inc-nasdaq-li-111944010.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4585","symbol_name":"ETF&股票定投概念","start_time":0,"source_url":"https://finance.yahoo.com/news/li-auto-inc-nasdaq-li-111944010.html","article_id":"2484262536","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/OKdkOy0U71Q_0Cn3Ad.Ckg--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/dcf3a88c75d56323d24e22a8db14dddc"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2484262536","pubTimestamp":1731928784,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"It is hard to get excited after looking at Li Auto's  recent performance, when its stock has declined 10% over the past month. However, a closer look at its sound financials might cause you to think again. Given that fundamentals usually drive long-term market outcomes, the company is worth looking at. Specifically, we decided to study Li Auto's  ROE in this article.ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In simpler terms, it measures the profitability of a company in relation to shareholder's equity.Return on equity can be calculated by using the formula:. Return on Equity = Net Profit  ÷ Shareholders' Equity. So, based on the above formula, the ROE for Li Auto is:. A Side By Side comparison of Li Auto's Earnings Growth And 15% ROE. As a next step, we compared Li Auto's net income growth with the industry, and pleasingly, we found that the growth seen by the company is higher","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4585":"ETF&股票定投概念","BK4555":"新能源车","LAAOF":"Li Auto Inc.","IE00B64PRP62.GBP":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (GBP) ACC","SQQQ":"纳指三倍做空ETF","IE00B3QW5Z07.USD":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (USD) ACC","LI":"理想汽车","QLD":"纳指两倍做多ETF","IE00BGHQF748.EUR":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (EUR) ACC","PSQ":"纳指反向ETF","BK4526":"热门中概股","BK4588":"碎股","BK4503":"景林资产持仓","EVS.SI":"MSCI China Electric Vehicles and Future Mobility ETF-NikkoAM","BK4551":"寇图资本持仓","TQQQ":"纳指三倍做多ETF",".IXIC":"NASDAQ Composite","NDAQ":"纳斯达克OMX交易所","BK4099":"汽车制造商","BK4112":"金融交易所和数据","BK4563":"昨日强势股","BK4548":"巴美列捷福持仓","LU2210149790.SGD":"Natixis Thematics Subscription Economy R/A SGD-H","QID":"纳指两倍做空ETF","LU2095319765.USD":"Natixis Thematics Subscription Economy R/A USD","LU2210150020.SGD":"Natixis Thematics Subscription Economy R/A SGD","IE00BKPKM429.USD":"NEUBERGER BERMAN GLOBAL SUSTAINABLE EQUITY \"A\" (USD) ACC"},"translate_title":"理想汽车公司（纳斯达克：LI）股价最近表现疲软，但财务状况看起来强劲：潜在股东应该迈出这一步吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"NDAQ":1,"LI":1,"LAAOF":1,".IXIC":1,"TQQQ":0.6,"SQQQ":0.6,"QLD":0.6,"QID":0.6,"PSQ":0.6,"NQmain":0.6,"MNQmain":0.6,"EVS.SI":0.6},"content_text":"It is hard to get excited after looking at Li Auto's (NASDAQ:LI) recent performance, when its stock has declined 10% over the past month. However, a closer look at its sound financials might cause you to think again. Given that fundamentals usually drive long-term market outcomes, the company is worth looking at. Specifically, we decided to study Li Auto's  ROE in this article. \n ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In simpler terms, it measures the profitability of a company in relation to shareholder's equity. \n See our latest analysis for Li Auto \n How Is ROE Calculated? \n Return on equity can be calculated by using the formula: \n Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity \nSo, based on the above formula, the ROE for Li Auto is:\n15% = CN¥10b ÷ CN¥67b (Based on the trailing twelve months to September 2024).\n The 'return' is the income the business earned over the last year. One way to conceptualize this is that for each $1 of shareholders' capital it has, the company made $0.15 in profit. \n What Has ROE Got To Do With Earnings Growth? \n We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. We now need to evaluate how much profit the company reinvests or \"retains\" for future growth which then gives us an idea about the growth potential of the company. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics. \n A Side By Side comparison of Li Auto's Earnings Growth And 15% ROE \n At first glance, Li Auto seems to have a decent ROE. Even when compared to the industry average of 15% the company's ROE looks quite decent. This certainly adds some context to Li Auto's exceptional 77% net income growth seen over the past five years. We believe that there might also be other aspects that are positively influencing the company's earnings growth. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio. \n As a next step, we compared Li Auto's net income growth with the industry, and pleasingly, we found that the growth seen by the company is higher than the average industry growth of 18%. \n\n\n\n  NasdaqGS:LI Past Earnings Growth November 18th 2024\n \n\n Earnings growth is a huge factor in stock valuation. It’s important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Has the market priced in the future outlook for LI? You can find out in our latest intrinsic value infographic research report.  \n Is Li Auto Making Efficient Use Of Its Profits? \n Li Auto doesn't pay any regular dividends to its shareholders, meaning that the company has been reinvesting all of its profits into the business. This is likely what's driving the high earnings growth number discussed above. \n Summary \n Overall, we are quite pleased with Li Auto's performance. Specifically, we like that the company is reinvesting a huge chunk of its profits at a high rate of return. This of course has caused the company to see substantial growth in its earnings. Having said that, the company's earnings growth is expected to slow down, as forecasted in the current analyst estimates. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more. \nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2484262536"}