The Automotive – Foreign Industry is ranked 31 out of 250 groups tracked by Zacks (top 12%). Studies have shown that roughly half of a stock’s price movement can be attributed to the underlying industry group. However, that does not mean we should discount industry group strength. For full-year 2023, Zacks Consensus Estimates predict that Li’s EPS will rocket by 2,400% year-over-year.Īs I mentioned earlier, LI is among the strongest stock in its industry group. Only 5% of stocks in the entire market earn this rating. While it’s nice to have strong current earnings and a strong earnings’ track record, future earnings are where “the rubber meets the road.” Because of Li’s strong expected earnings estimates moving forward, the company earns the coveted Zacks Rank #1 (Strong Buy).

(Last quarter, earnings surprised by a healthy 121%). LI has produced positive earnings surprises in six of the past six quarters.

Li Auto also has a history of topping consensus estimates. Last quarter, EPS grew 163% while revenue grew 81%, year-over-year. Over the past two quarters, LI has produced robust top and bottom-line growth. Most traditional auto manufacturers like General Motors ( GM Quick Quote GM - Free Report) are lagging versus LI and are flat year-to-date. Meanwhile, the iShares China Large-Cap ETF ( FXI Quick Quote FXI - Free Report) is lower by 5% year-to-date, and other EV makers, such as LI competitor Nio ( NIO Quick Quote NIO - Free Report), are lower by 21%. Shares of LI are higher by 38% year-to-date, while the Zacks Automotive – Foreign peer group is lower by 7.5%. The EV manufacturer has been outperforming the Chinese market and its peer group. Zacks Rank #1 (Strong Buy) stock Li Auto is exuding unusual relative price strength versus other stocks. In my experience as an investor, relative price strength is among the best “tells” out there. Li Auto ( LI Quick Quote LI - Free Report) is an electric vehicle (EV) maker that manufactures, engineers, and designs SUVs.

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