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Xpeng (XPEV) Beat on Q1 Earnings, But Stock Dropped on Guidance

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Updated 23 May 2022

Key points:

  • Xpeng beat on revenue and EPS, but shares fell on weaker guidance and smaller gross margins
  • The company felt a small dip over the Chinese Lunar New Year and increasing Covid-lockdowns
  • Management remains confident in weathering supply chain difficulty and ongoing shortages

Chinese EV maker Xpeng (NYSE: XPEV) reported sturdy first-quarter earnings this morning, edging past analyst expectations. However, shares still sank slightly in premarket trading as investors latched on to poorer guidance and pross profit margins.

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Xpeng reported a first-quarter loss of $0.28 per share on revenue of $1.2B. Analysts were expecting a loss of $0.30 on a revenue of $1.1B. The company delivered 34,561 vehicles across Q1, some amount less than the 41,751 delivered in Q421. This can be mainly attested to the Chinese Lunar New Year, which tends to be a seasonally slow period for automobile sales. Q1 was also impacted by a resurgence in Covid cases, causing factories to shut down and supply chains to be placed under further pressure. 

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Despite hitting the mark on EPS and revenue, the company posted gross profit margins of 12.2, just shy of the 12.7% expected by analysts. Looking to the rest of the year, Xpeng is expecting to deliver between 31,000 and 34,000 in Q2, with sales of $1.1B – again just shy of the $1.2B projected by the Street. 

Xpeng CEO He Xiapoeng remained positive:

“Demand for our high-quality EV products was robust and our proprietary suite of technologies continue to lead the industry…Superior in-house technology development capability and proactive supply chain management enabled us to address supply chain challenges more efficiently. We remain confident in expanding our market share despite the impact of semiconductor shortage and COVID-19.”

Bearing in mind the recent vendetta against high-growth stocks, Xpeng hasn’t done all that bad; the market reaction could have certainly been worse. The company appears to be effectively dealing with other macro headwinds at a time when the market is riddled with uncertainty.