On Monday, Morgan Stanley reiterated its Overweight rating and $18.00 stock price target for XPeng Inc. (NYSE:XPEV), following a notable increase in the company's vehicle sales. XPeng achieved a year-to-date high with 9,000 units sold in March, marking a significant monthly and annual improvement.
The sales for March alone rose by 99% month-over-month and by 29% compared to the same month in the previous year. These figures contributed to first quarter deliveries totaling 21,800 units, a 20% increase year-over-year, but a 65% decrease from the previous quarter, aligning with the company's forecasted range of 21,000 to 22,500 vehicles.
The robust sales in March were largely attributed to the successful ramp-up of the X9, XPeng's all-electric multi-purpose vehicle (MPV), which saw a 173% month-over-month increase in deliveries to 3,900 units. This model has maintained its status as the top-selling all-electric MPV in China.
Additionally, the active user penetration rate of XPeng's autonomous driving system, XNGP, reached 82% in urban driving scenarios during March, indicating strong customer engagement with the technology.
XPeng is also expanding its global footprint, having announced strategic partnerships in March with leading car dealer groups in Thailand, Singapore, and Malaysia. These partnerships are set to facilitate the launch of the right-hand drive version of its G6 model.
Furthermore, the company has officially introduced the G9 and P7 models to the German market, showcasing its ambition to increase its presence in international markets.
The upcoming Beijing Auto Show is anticipated to be a significant event for XPeng, as the company plans to unveil new models targeting the RMB 100,000 to 150,000 price range. These models are expected to feature advanced autonomous driving capabilities and will be based on the Mona platform.
The industry is watching closely to see if these new models will drive increased sales volumes for the automaker. In addition to the new model launches, XPeng is rolling out promotions for the second quarter, which could potentially enhance the sales of its G6 and G9 models.
InvestingPro Insights
As XPeng Inc. (NYSE:XPEV) continues to make headlines with its recent sales achievements and strategic international expansions, insights from InvestingPro provide a deeper look into the company's financial health and market performance. With a market capitalization of $7.44 billion, XPeng holds a significant position in the automobile industry. Notably, the company holds more cash than debt on its balance sheet, which is a reassuring sign for investors considering the company's liquidity and financial stability.
InvestingPro data shows a robust year-over-year revenue growth of 14.23% for the last twelve months as of Q4 2023, reflecting the company's increasing sales volume. This is further supported by analysts' anticipation of sales growth in the current year, suggesting a positive outlook for the company's future performance. However, it's worth noting that XPeng is not expected to be profitable this year, with a P/E ratio of -4.74, indicating that the market is currently valuing its growth potential over current earnings.
In terms of stock performance, XPeng has experienced significant volatility, with the price taking notable hits over various periods, including a 10.39% drop over the last week and a 47.36% decrease year-to-date. This level of volatility may present opportunities for investors with an appetite for risk and an eye on long-term growth prospects. For those interested in further insights, InvestingPro offers additional tips on XPeng, which can be accessed through their platform. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, allowing them to stay ahead with comprehensive analysis and data.
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