LI Should I Buy
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Li Auto Inc is not a good buy for a beginner investor with a long-term strategy and $50,000-$100,000 available for investment. The company's financial performance is deteriorating, analysts have downgraded the stock with reduced price targets, and hedge funds are selling. Additionally, the options data indicates bearish sentiment, and there are no strong positive catalysts to offset these negatives.
The MACD is above 0 but positively contracting, suggesting weakening momentum. RSI is neutral at 64.617, and moving averages are converging, indicating no strong trend. The stock is trading near resistance levels (R1: 19), with support at 16.819. The technical indicators do not provide a strong buy signal.
NULL identified. The company's AI glass debut is a long-term initiative and not an immediate growth driver.
Analysts have downgraded the stock multiple times, citing falling sales, weaker margins, and intense competition.
Hedge funds are selling, with a 258.86% increase in selling activity last quarter.
Financial performance is deteriorating, with significant YoY declines in revenue (-36.17%), net income (-122.21%), and EPS (-123.48%).
The broader Chinese auto market is expected to face challenges in 2026, with declining passenger vehicle growth.
In Q3 2025, revenue dropped by 36.17% YoY to 27.36 billion, net income fell by 122.21% YoY to -624.98 million, and EPS declined by 123.48% YoY to -0.31. Gross margin also decreased to 16.33%, down 24.12% YoY. The company's financials indicate significant challenges in profitability and growth.
Analysts have downgraded the stock significantly. JPMorgan downgraded it to Underweight with a $14 price target, Jefferies downgraded it to Hold with a $17.50 price target, and HSBC downgraded it to Hold with an $18.60 price target. The consensus reflects concerns over falling sales, weaker margins, and competitive pressures.
