Earnings Update: XPeng Inc. (NYSE:XPEV) Just Reported And Analysts Are Trimming Their Forecasts

It's been a sad week for XPeng Inc. (NYSE:XPEV), who've watched their investment drop 12% to US$19.44 in the week since the company reported its quarterly result. Revenues were in line with expectations, at CN¥7.4b, while statutory losses ballooned to CN¥3.16 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Taking into account the latest results, the current consensus from XPeng's 31 analysts is for revenues of CN¥37.4b in 2022, which would reflect a sizeable 28% increase on its sales over the past 12 months. Losses are expected to hold steady at around CN¥8.43. Yet prior to the latest earnings, the analysts had been forecasting revenues of CN¥40.0b and losses of CN¥7.73 per share in 2022. So it's pretty clear consensus is more negative on XPeng after the new consensus numbers; while the analysts trimmed their revenue estimates, they also administered a modest increase to per-share loss expectations.

The consensus price target fell 15% to US$33.07, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic XPeng analyst has a price target of US$45.36 per share, while the most pessimistic values it at US$20.99. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that XPeng's revenue growth is expected to slow, with the forecast 65% annualised growth rate until the end of 2022 being well below the historical 152% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 22% per year. Even after the forecast slowdown in growth, it seems obvious that XPeng is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also downgraded their revenue estimates, although industry data suggests that XPeng's revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of XPeng's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple XPeng analysts - going out to 2024, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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