LI Should I Buy
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Li Auto Inc (LI) is not a strong buy for a beginner, long-term investor at this time. The company's financial performance is weak, with significant YoY declines in revenue, net income, and EPS. Analysts have downgraded the stock, citing concerns over sales volumes, competition, and a lack of new models. Technical indicators are bearish, and hedge funds are selling. While there is a slight improvement in vehicle deliveries, it is not enough to offset the broader negative trends. Given the investor's preference for long-term growth, it is advisable to hold off on investing in LI until there are clearer signs of recovery or stronger growth catalysts.
The technical indicators for LI are bearish. The MACD histogram is negative and expanding downward, RSI is neutral at 22.865, and moving averages indicate a bearish trend (SMA_200 > SMA_20 > SMA_5). The stock is trading below key support levels, with a pivot at 17.742 and current pre-market price at 17.05. This suggests continued downward pressure.
Li Auto delivered 26,421 vehicles in February 2026, marking a 0.6% year-over-year increase, breaking an eight-month streak of declining deliveries. The cumulative deliveries reached 1.59 million as of February 28, 2026.
Hedge funds are selling, with a 258.86% increase in selling activity last quarter. Analysts have downgraded the stock, citing weak sales volumes, competition, and a lack of new models. Financial performance has significantly deteriorated, with revenue, net income, and EPS all showing substantial YoY declines. Technical indicators are bearish, and the stock is trading below key support levels.
In Q3 2025, Li Auto's 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 dropped to 16.33%, down -24.12% YoY. These figures indicate a significant deterioration in financial performance.
Analysts have a mixed to negative view on Li Auto. Piper Sandler has a Neutral rating with a $19 price target, Jefferies downgraded the stock to Hold with a $17.50 price target, and JPMorgan downgraded it to Underweight with a $14 price target. Analysts cite weak sales volumes, competition, and a lack of new models as key concerns.
