Li Auto Inc. American Depositary Shares (LI)

FairStock Score: 20/100 — RISKY

Key Financials

Strengths

• Conservative balance sheet with debt-to-equity of just 0.24, providing financial flexibility
• Established organization with 30,728 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($11) with negative 64% margin of safety—limited downside protection
• Revenue declining at 35.0% year-over-year signals potential demand weakness or market share loss
• Altman Z-Score of 0.8 places it in the financial distress zone—elevated bankruptcy risk
• No meaningful dividend despite modest growth—total return depends entirely on multiple expansion

AI Analysis

Li Auto Inc. American Depositary Shares is a mid-cap consumer cyclical company valued at $19.0 billion. The business generates $112.3 billion in annual revenue with a 0.0% net margin. From a quality standpoint, Li shows solid Piotroski F-Score of 6/9 and distressed Altman Z-Score of 0.8 warrants caution. On valuation, the stock is commanding a steep 116.6x multiple, with trades above its Graham Number with a negative 64% margin. Growth dynamics show revenue growing at -35.0% and profit growth of -99.8%. Our composite FairStock Score of 20/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. Operational leverage in the business model means incremental revenue growth could disproportionately boost bottom-line profitability.

Bear Case

At 117x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Sluggish -35% growth in a large-cap company leaves the stock vulnerable to de-rating if the market rotates toward higher-growth opportunities.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer