XPeng investors desperately need some good news. Earnings could provide a jolt. No matter what the company reports, investors should brace for volatility.
XPeng (ticker: XPEV) is due to report third-quarter numbers before the market opens for trading on Wednesday. Wall Street is looking for a loss of about $293 million on sales of $1 billion. XPeng reported a loss of about $368 million on sales of $1.1 billion for the second quarter of 2022.
Along with earnings, investors will be looking for delivery guidance. The company delivered 29,570 vehicle in the third quarter. Deliveries in October came in at a disappointing 5,101 units. Monthly deliveries peaked in 15,295 in June.
The company needs to deliver about 20,000 vehicles in November and December to hit Street estimates. Deliveries will have to start to exceed 10,000 a month for the American depositary receipts to rise again. The ADRs are down about 85% year to date.
Along with weak deliveries, rising interest rates and inflation have hit all car stocks. China’s zero-Covid policies has resulted in production disruptions as well. And Xpeng ADRs have been downgraded to Sell a couple of times in the past few weeks, by Citi and Jefferies. There are rumblings the company’s new G9 crossover vehicle isn’t selling well. That vehicle competes with the Tesla (TSLA) Model Y.
Investors will want an update about the G9 when the company hosts a conference call at 8 a.m. eastern time.
Options markets imply the stock will move about 10% up or down following earnings. Shares dropped about 11% after the company reported second quarter numbers in late August.
XPeng ADRs is up 6.5% in Tuesday trading ahead of earnings. The S&P 500 off 0.2%.