Citi analysts nonetheless have a bearish view of XPeng Inc. (NYSE:) shares following the Chinese language electrical automobile firm’s first-quarter earnings launch, which noticed it prime revenue and income expectations.
XPeng reported Q1 EPS of (RMB0.75), RMB1.31 higher than the analyst estimate of (RMB2.06). Income for the quarter got here in at RMB6.55 billion versus the consensus estimate of RMB6.19 billion.
Nonetheless, Citi maintained a Promote ranking on the inventory, elevating the worth goal to $7.70 from $7.30 per share in a be aware Wednesday. The financial institution stated that Xpeng’s 1Q total gross revenue margin beat was as a result of Volkswagen expertise charge fee, which they estimate at round Rmb254mn with 90% to 100% gross revenue margin and the truth that automobile margin stabilized at 5.5%, up 1.4 share factors QoQ as a result of increased margined X9 contribution.
Nonetheless, Citi believes the Volkswagen expertise charge shouldn’t be a long-term recurring charge however ought to lead to one-off income that lasts for 2 to a few years.
“We imagine it could be problematic to assign an aggressive P/S a number of on Xpeng’s expertise charge revenue, which ought to find yourself as one-off income,” the financial institution added.