XPeng Earnings Approach With Stock (XPEV) A Huge Outperformer – What To Expect

XPeng's stock (NYSE: XPEV) has been a notable outperformer this year, putting up gains of 72% YTD, and a mightily impressive 175% over the past 12 months. Now the Chinese EV maker heads into its earnings release tomorrow with expectations running high.

Analysts expect a significant turnaround in the quarter, projecting a smaller loss per share of -1.06 compared to -1.29 in the same quarter last year. Revenue is estimated to surge to $17.84 billion, a massive 119.9% increase from $8.11 billion a year ago.

The company's first-quarter results, while showing progress, also revealed challenges. While revenue soared, the company still posted a loss, albeit a narrower one than the previous year. In Q1, XPeng Reported an EPS of -$0.10, a 50% decline year-over-year. The market will be scrutinizing every line of the income statement and balance sheet for confirmation that XPeng is on a clear path to profitability.

The recent rally has been fueled by several key factors. Firstly, XPeng delivered a strong first quarter, reporting a staggering 330.8% year-over-year increase in vehicle deliveries, totaling 94,008 units. This surge translated into revenue of 15.81 billion yuan ($2.18 billion), a 141.5% jump.

The company also provided upbeat guidance for the second quarter, projecting revenue between 17.5 billion and 18.7 billion yuan, with deliveries ranging from 102,000 to 108,000 vehicles.

Secondly, XPeng has been aggressively expanding its product portfolio. The launch of the MONA M03, a mid-sized sedan aimed at the mass market, positions the company to compete directly with popular models from BYD and even Tesla.

Furthermore, the introduction of the high-end X9 minivan, equipped with advanced autonomous driving systems, demonstrates XPeng's commitment to innovation and premium offerings.

XPeng's heavy investment in AI for advanced driving systems, with a commitment of 3.5 billion yuan ($483.07 million) over the past year, underscores its ambition to be a leader in autonomous driving technology.

Despite the prevailing optimism, a closer look suggests caution. While XPeng's growth is undeniable, the Chinese EV market is becoming increasingly saturated. Competition from established players like BYD and Tesla, as well as a host of emerging startups, is intensifying.

The goal to reach break even by the end of this year is a big one, and with increasing deliveries, and narrowing losses, there is clearly more a bullish take on this becoming reality.