Bernstein SocGen Group said XPeng‘s fourth-quarter guidance fell short of expectations even as the Chinese carmaker remains on track for quarterly profitability, following a 10.3% stock decline Monday after earnings.
Analyst Eunice Lee maintained a Market Perform rating and $21 price target in a research note published after XPeng reported third-quarter results.
“Q3 beat on non-core, Q4 guidance soft,” Lee titled the new research note.
XPeng guided fourth-quarter deliveries between 125,000 and 132,000 vehicles, representing year-over-year growth of 36.6% to 44.3%.
“This implies average monthly sales of 41,000 to 45,000 units for November and December, which is on the softer end when compared with October’s 42,000 units and year-end seasonality,” Lee wrote.
Revenue is expected between 21.5 billion yuan and 23 billion yuan ($3.0 billion to $3.2 billion), up 33.5% to 42.8% from a year earlier.
Bernstein’s price target represents a downside of 6.3% based on Monday’s closing price.
Profitability Still Achievable
Despite the volume miss, Bernstein said XPeng should still achieve its profitability target.
“Although Q4 delivery guidance is softer than our prior expectations, higher margin service revenue from Volkswagen (estimated 90%+ margin) and the Nov 20 launch of the X9 EREV, which carries higher margins, should support achieving profit breakeven,” Lee wrote.
The extended-range version of the X9 MPV was unveiled earlier this month in Guangzhou, a day after the company’s AI Day event.
The analyst pointed to two key profit drivers: technology licensing revenue from Volkswagen AG, which Bernstein estimates carries margins above 90%, and the upcoming X9 extended-range electric vehicle launching November 20 that commands better margins than battery-only models.
XPeng reported third-quarter revenue of 20.38 billion yuan, up 102% year-over-year, with net loss narrowing to 380 million yuan from 1.81 billion yuan a year earlier.
Gross margin expanded to 20.1% from 15.3%, while vehicle margin reached 13.1% versus 8.6% in the prior-year period.
Volkswagen Validation
Bernstein also noted the carmaker’s announcement during the AI Day that Volkswagen will adopt its VLA 2.0 platform and in-house Turing system-on-chip for B-segment vehicles launching in early 2026. “We think [this] signals strong validation of XPeng’s chip technology,” Lee wrote.
XPeng shares traded 0.3% higher at $22.50 Tuesday as of press time.
As reported earlier this Tuesday, the Swiss bank UBS has increased its holdings in XPeng to a new record during the third quarter.
The firm acquired nearly 2 million share between July and September.
