Li Auto posted Q2 2026 revenue of RMB25.7b with 98,330 deliveries, down 11.5% YoY. Margins deteriorated with gross margin 11.0% and operating margin -9.0; net loss was RMB1.7b. The company introduced Li L8/L6, showcased MACH M100 AI tech, announced a US$1b buyback, and issued a cautious Q3 outlook of 95k–100k deliveries and RMB26.6–28.0b revenue, signaling near-term headwinds but potential mix-led margin gains ahead.
Amid a challenging market, LI’s stock is considered undervalued with significant upside potential, supported by an Overweight rating from Morgan Stanley. The company's substantial cash reserves and an upcoming earnings report may act as key catalysts for recovery, especially as analysts anticipate revenue of $3.14 billion.
Li Auto Inc. (LI) is currently trading below its consensus price target of $25.24, indicating a potential upside of 49%. This positions LI as a compelling option for investors looking for fundamentals-driven growth, despite being lower than NIO's upside potential.
Li Auto reports a net loss of $50.5 million this quarter. Sales dropped 36% year-over-year to $3.8 billion, below expectations. Despite losses, Li's stock rose 1.3% in early trading. Li expects to deliver 100,000-110,000 vehicles next quarter. Previous year's sales were significantly higher at $6.1 billion.
China's EV sales dropped 5% in July but rose 27.4% year-over-year. Li Auto recorded a significant year-over-year decline of 58.6% in registrations. Market demand is expected to soften until Q4, impacting LI's sales. Late May saw warnings against price wars, affecting the EV market dynamics. Li Auto remains profitable among a limited number of EV manufacturers in China.
Li Auto's Q1 profits missed analyst expectations. Adjusted earnings were 0.96 yuan, below the forecast of 1.03 yuan. Q2 delivery and revenue projections are also below forecasts. Shares fell over 4% before market opening, despite a 16% YTD increase. The company delivered 92,864 vehicles, exceeding expected unit deliveries.
