To The Moon

$XPeng Inc.(XPEV)$ is scheduled to report its Q4 2024 earnings on next Tuesday, 18 March 2025, before the U.S. markets open.

Xpeng delivered a record 91,507 vehicles in Q4 2024, exceeding their previously provided guidance range. This is a very positive sign. The company has provided revenue guidance of RMB 15.3 billion to RMB 16.2 billion. This indicates projected year-over-year growth.

Xpeng's deliveries stayed strong in February, despite the start of the year being a traditionally slow period for auto sales in China. XPEV delivered 30,453 vehicles in February, up 570.03 percent from 4,545 in the same month last year, and essentially flat from 30,350 in January.

The analyst estimates for the revenue is forecast for Q4 2024 at RMB 16.153B. The EPS consensus forecast is expected to come in for Q4 2024 at -1.664 RMB or -0.22.

Xpeng (XPEV) Last Positive Earnings Call Saw Share Price Surge 90.08%

Xpeng had a positive earnings call which saw its share price gain 90.08% since 19 Nov 2024.

XPeng's Q3 2024 earnings call presented a largely positive outlook with significant growth in deliveries and revenue, improvements in gross margin, and successful global expansion. However, ongoing operational losses and increased R&D expenses were noted as challenges.

Xpeng (XPEV) Guidance On Cash Flow Improvement

In the third quarter of 2024, XPeng surpassed its key performance targets, delivering 46,533 units, reflecting a 54% increase quarter-over-quarter and a 16% increase year-over-year, which exceeded their prior quarterly guidance. September deliveries exceeded 20,000 units, setting a new record. This performance was bolstered by a gross profit margin increase to 15.3%, marking continuous improvement for five consecutive quarters. For the fourth quarter of 2024, XPeng forecasts total deliveries between 87,000 to 91,000 units, representing a quarter-over-quarter increase of 87% to 95.6%, and a year-over-year increase of 44.6% to 51.3%. The company also projects total revenue for the fourth quarter to range from RMB 15.3 billion to RMB 16.2 billion, reflecting a quarter-over-quarter rise of 51.5% to 60.4% and a year-over-year increase of 17.2% to 24.1%.

Furthermore, XPeng expects significant improvements in cash flow, projecting cash on hand to exceed RMB 40 billion by year-end.

Key Factors Influencing Xpeng's Q4 2024 Earnings

Market Position & Competition

Xpeng operates in China's competitive EV market, facing rivals like BYD, Nio, Li Auto, and Tesla. Market share will hinge on new model launches (e.g., G6 SUV, potential sedans), pricing strategies, and technological differentiation, particularly in autonomous driving (XPILOT).

The P7 Plus model received over 30,000 firm orders shortly after its launch. XPeng anticipates delivery volumes for the P7 Plus to exceed 10,000 units in December.

Vehicle Deliveries

Growth in deliveries is critical. Expansion into international markets (e.g., Europe) and successful ramp-up of production could boost revenue. New models launched by 2024 may drive demand. XPeng delivered 46,533 units in Q3 2024, marking a 54% increase quarter-over-quarter and a 16% increase year-over-year.

Xpeng delivered a record 91,507 vehicles in Q4 2024, exceeding their previously provided guidance range.

Margins and Profitability

Improved economies of scale, battery cost reductions (via partnerships or supply chain efficiencies), and potential subscription revenue from advanced driver-assistance systems (ADAS) could enhance gross margins. However, ongoing R&D costs and price wars may pressure profitability.

Total revenue for Q3 2024 was RMB 10.1 billion, an increase of 18.4% year-over-year and 24.5% quarter-over-quarter. The gross profit margin increased to 15.3% in Q3 2024, up from negative 2.7% the previous year and 14% in the previous quarter. September's deliveries exceeded 20,000 units, marking a new record high for the company.

XPeng expects positive free cash flow for the second half of the year, with cash on hand anticipated to exceed RMB 40 billion by year-end.

Autonomous Driving Tech

Advancements in XPILOT could differentiate Xpeng, offering a premium revenue stream if commercialized effectively by 2024.

Regulatory and Macro Environment

Chinese EV policies (subsidies, emissions targets) and global economic conditions (recession risks, exchange rates) will impact sales. Supply chain stability (e.g., chips, batteries) is also a factor.

Partnerships

Collaborations, such as with Volkswagen, may aid technology sharing, cost savings, and market access. Overseas sales increased by 70% sequentially, accounting for 15% of total sales volume. XPeng plans to expand its international sales network to over 300 stores by 2025.

Xpeng (XPEV) Price Target - Nearer To The Highest End

Based on 8 Wall Street analysts offering 12 month price targets for XPeng, Inc. ADR in the last 3 months. The average price target is $17.28 with a high forecast of $29.00 and a low forecast of $7.00. The average price target represents a -31.83% change from the last price of $25.35.

There have been good deliveries report for Q4 2024 as well as most recent February, but I think there are some factors that might impact its share price, these factors includes:

1. Price Wars: Intense competition could force price cuts, squeezing margins.

2. Regulatory Changes: Reduction in EV subsidies or geopolitical tensions (e.g., US-China relations) might affect operations.

3. Execution Risks: Production delays, supply chain disruptions, or failed international expansion could hinder growth.

Technical Analysis - Exponential Moving Average (EMA)

If we were to look at XPEV, we can see that there have been much investors interest as RSI is currently trending in the overbought region, this signal a strong momentum.

We can see from the share price currently well above the 12-EMA, which represent that the bulls are in control and we could expect more upside trading as investors continued their strong sentiment in XPEV.

XPEV recent deliveries number have suggested that the EV cars are being well received and not forgetting they are going into robotics with humanoid robot. This could continued to gather investors interest and I am expecting to see more buying demand into XPEV.

This might be a good time to load up XPEV.

Summary

If Xpeng successfully executes on delivery growth, margin improvement, and technology monetization, Q4 2024 could show strong revenue growth and progress toward profitability. However, challenges like competition, macroeconomic headwinds, and operational risks remain.

The Chinese EV market is highly competitive, and Xpeng faces challenges from both domestic and international rivals. Economic conditions in China can also impact consumer demand.

In essence, Xpeng's Q4 2024 results are anticipated with considerable interest, particularly given their robust delivery figures. It will be crucial to analyze the financial details and management's forward-looking statements to gain a comprehensive understanding of the company's performance and prospects.

Xpeng's strong delivery numbers suggest a potentially positive earnings report. Factors to watch include:

• Gross profit margins.

• Cash flow.

• Updates on future model launches and technology development.

• How they are handling the competitive Chinese EV market.

Appreciate if you could share your thoughts in the comment section whether you think Xpeng would be able to post better-than-expected earnings despite the competition both domestic and external.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.