Li Auto LI 2025 Q1 Earnings Preview Downside Concerns on Softer Guidance

Forward-Looking Analysis
Li Auto is set to release its Q1 2025 earnings report on May 29th. Analysts forecast the company’s earnings for the year to grow significantly, with EPS expected to increase from $0.96 to $1.70 per share, representing a 77.08% rise. Vehicle deliveries are projected between 88,000 and 93,000, reflecting a year-over-year growth of 9.5% to 15.7%. However, revenue is expected to dip by 3.5% to 8.7% from the previous year, ranging between $3.23 billion to $3.41 billion. Deutsche Bank has adjusted its sales volume forecasts downward by 10% to 630,000 units for 2025, citing the delay of the i7 pure electric SUV launch. Nomura has downgraded Li Auto's rating to neutral, indicating concerns over a vague 2025 outlook with potential opportunities shifting towards 2026.

Historical Performance Review
In the fourth quarter of 2024, Li Auto reported revenue of $44.27 billion, with a net income of $3.53 billion and EPS of $1.76. The company's gross profit for the quarter was $8.97 billion, despite a 38% year-over-year decline in net profit attributed to heightened promotional costs amid rising competition.

Additional News
Li Auto recently experienced a notable share price decline following a weaker-than-expected 2025 outlook, with its shares dropping 6.1% in Hong Kong and 4.4% for its American depositary receipts. The company reported a 20% increase in vehicle deliveries for the final quarter of 2024 but faced challenges due to increased competition and promotional expenses. Deutsche Bank and Nomura have expressed concerns about Li Auto’s 2025 performance, particularly regarding the delayed i7 SUV launch and unclear near-term prospects. Analysts highlight that the first quarter is traditionally weaker for shipments, with new models anticipated later in the year.

Summary & Outlook
Li Auto's financial health shows mixed signals as it navigates through a challenging market environment. While growth prospects are promising, with significant EPS increases expected for the year, revenue projections highlight potential risks, especially with reduced guidance and delayed product launches. The company's ability to manage increased competition and promotional costs will be crucial. The outlook remains neutral, with uncertainties tied to the broader market and internal strategic adjustments. Investors should monitor upcoming model releases and strategic initiatives closely to gauge future performance.