Recommendation: Speculative Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside |
|---|---|---|---|---|---|---|---|
| 26 Jun, 24 | XPEV | Speculative Buy | USD 8.19 | USD 8.8 | USD 9.85 | 16 days | 20.3% |
Data Powered by EOD Historical Data (“EODHD”).
XPeng Inc. designs, develops, manufactures, and markets smart electric vehicles (EV) in the People's Republic of China. It offers SUVs under the G3, G3i, and G9 names; four-door sports sedans under the P7 and P7i names; and family sedans under the P5 name. The company also provides sales contracts, maintenance, super charging, technical support, auto financing, insurance technology support, ride-hailing, automotive loan referral, and other services, as well as vehicle leasing and insurance agency services. In addition, it offers advanced driver-assistance system technology and in-car intelligent operating system, as well as core vehicle systems, including powertrain and the electrical and electronic architecture. XPeng Inc. has a strategic partnership with DiDi Global Inc. to enhance the adoption of smart EVs and technologies. The company was founded in 2015 and is headquartered in Guangzhou, the People's Republic of China.
Margin Growth: Gross margins grew to 12.9% in Q1FY24 from 1.7% in Q1FY23.
Higher Quick Ratio: Quick Ratio stands at 1.32x in Q1FY24 vs. Industry Median of 1.13x.
Leveraged Balance Sheet: Assets/Equity of 2.27x in Q1FY24 vs. Industry Median of 1.95x.
Negative Returns to Shareholders: ROE of -3.8% in Q1FY24 vs Industry Median of 2.3%.
Regulatory Permissions and Approvals, Dynamic EV Market, Shortage of Semiconductors, etc.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 8.19 | 7.1 | 8.8 | 9.85 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Technical Observation (on the daily chart)
The Relative Strength Index (RSI) observed over a 14-day period registering at 55.57, currently upward trending with expectations of upward momentum in the stock price. Furthermore, the stock's current position is situated between both the 50-day Simple Moving Average (SMA) and the 200-day SMA, potentially acting as dynamic short-term support and resistance levels respectively. The price is breaking above 50-SMA with decent volume with expectations of upward momentum till next key resistance around USD 9.00-USD 9.50.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Speculative Buy’ rating has been given to Xpeng Inc (NYSE: XPEV) at the current market price of USD 8.19 as of June 26, 2024, at 10:50 am PDT.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Consumer Cyclical Industry: Auto Manufacturers
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| XPEV Xpeng Inc |
0.52 4.25% | 12.64 | - | - | 0.61 | 3.25 | 0.58 | -1.2654 |
| TSLA Tesla Inc |
-2.68 1.10% | 241.82 | 45.91 | 67.57 | 5.67 | 8.35 | 12.42 | 58.23 |
| TOYOF Toyota Motor Corp |
-0.43 2.40% | 17.50 | 8.97 | 9.44 | 0.0059 | 1.11 | 0.0097 | 0.05 |
| TM Toyota Motor Corporation ADR |
-1.64 0.93% | 174.12 | 8.97 | 9.29 | 0.006 | 1.10 | 0.0097 | 0.05 |
| BYDDY BYD Co Ltd ADR |
-0.69 0.91% | 75.01 | 19.10 | 14.08 | 0.13 | 4.01 | 0.12 | 1.91 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
The reference date for all price data, currency, technical indicators, support, and resistance levels is June 26, 2024. The reference data in this report has been partly sourced from REFINITIV.
Abbreviations
CMP: Current Market Price
SMA: Simple Moving Average
RSI: Relative Strength Index
USD: United States dollar
Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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