- XPeng reported quarterly earnings that missed Wall Street consensus.
- XPEV still managed to advanced more than 11%.
- XPeng reported revenue of $750 million that fell 40% YoY.
- Q1 deliveries are expected to drop 45% to 48% YoY.
XPeng (XPEV) added 11.4% on Friday morning to trade near $9.30 after issuing quarterly earnings that missed analyst targets for the fourth quarter. Despite the misses on both top and bottom lines and forward guidance that showed a drop-off in deliveries, the electric vehicle company touted a cost-saving strategy that the market appeared to eat up.
XPeng stock news: Cost cuts are on the table, details are slim
XPeng reported adjusted EPS of $-0.37, which missed the $-0.35 consensus mark. Revenue of $750 million was $24.4 million below the Wall Street consensus and measured 40% less than the same period a year ago. Of course, sales were already expected to fall due to China's covid-related shutdowns during the fourth quarter.
Fourth quarter deliveries amounted to 22,204 vehicles, which was down a whopping 47% YoY. Its leading vehicle, the G9 SUV, made up nearly 6,200 of those deliveries. To make matters worse, gross margin dropped from 12% to 8.7% from the fourth quarter of 2021.
"With the optimization of our product portfolio and the significant improvement of our marketing capabilities, we will resume growth in our sales and market share," said Dr. Hongdi Brian Gu, Honorary Vice Chairman and Co-President of XPeng. "In the meantime, we will improve operational efficiency across our business processes and continue to reduce costs."
Those costs seem quite necessary with the outlook management gave for the present first quarter. For Q1 managment expects about $595 million in revenue, which would be a 45% drop-off in revenue from the same quarter one year ago. Likewise, managmenet expects XPeng to deliver between 18,000 and 19,000 vehicles in Q1. This would mean a fall of 45% to 48% YoY.
The most positive news was that XPeng had expanded its charging stations to 1,014 and its stores to 420.
XPeng stock forecast
XPeng stock may be roaring ahead here on Friday, but do not get too excited. XPEV has faced a slew of lower highs over the past three months. This could be the fifth lower high in a row since December 5, 2022. Friday's session high appears to have sold off before even making it to resistance at $9.55. Without a break of $9.55, expect XPEV to dwindle over the next two months to support at $6.25 from last autumn.
XPEV daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.