XPeng stock price has done well this year and is beating many electric vehicle companies like Tesla, BYD, and Nio. XPEV jumped to high of $22.75 on Friday, up by 253% from its lowest point in 2024, bringing its valuation to over $21 billion.
The bullish case for XPeng stock
There are four main reasons why the XPeng stock price is set to surge in the coming months. First, the management is accumulating the shares, a sign that they expect it to continue doing well over time.
Data shows that the company’s founder and chairman has boosted the stake to nearly 20%. As someone who knows the company well, this is a sign that he is seeing strong momentum as its market share grows in China and other countries.
Second, XPeng stock price will benefit from its ongoing growth momentum. It delivered 103,181 vehicles in the second quarter, up from 90,000 in Q1 and 30,000 in the same period last year.
Its strong delivery growth is a sharp contrast from what is going on with other electric vehicle companies like Tesla, Nio, and Rivian.
Read more: XPeng stock price pattern points to a surge to $40 soon
The results showed that its revenue rose to $2.55 billion, a 125% annulized increase. Revenues from vehicle sales rose by 147% to $2.36 billion.
Importantly, this revenue growth coincided with margin expansion. Its gross margin rose to 17.3%, while the vehicle margin was 14.3%. This margin expansion pushed its net loss downwards to just $0.07 billion.
The company now expects to become profitable in the fourth quarter of this year. In a statement, the chairman said:
“We are confident that we will not only accelerate scale growth but also continue to improve the company’s profitability, enabling us to sustain industry-leading R&D and continuously push the boundaries of technology innovation.”
Third, analysts are optimistic that XPeng’s business has more room to grow.
The average estimate is that its revenue will jump by 103% in the current quarter to CNY 20.5 billion, followed by CNY 24.8 billion in Q4. As a result, the annual revenue will grow by 95% to CNY 79.8 billion, followed by CNY 113.86 billion next year.
XPEV stock price has bullish technicals
XPeng stock chart | Source: TradingView
The daily chart shows that the XPEV stock price has been in a strong bull run in the past few months. It jumped from a low of $6.62 in September last year and is now trading at $22.75.
The stock has formed a highly bullish cup-and-handle pattern with a depth of about 72%. Measuring the same distance from the upper side means that it will have a bullish breakout, potentially to $40.70, up by 72% from the current level.
XPeng stock price has remained above the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bulls are in control.
The MAC indicator has moved above the zero line, while the Relative Strength Index (RSI) is nearing the overbought level.
Read more: XPeng stock price forms rare pattern points to a 125% surge
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