Goldman Sachs reiterated its “Buy” rating on XPeng (NYSE: XPEV) and cut its XPeng stock price target from $24 to $16 on October 23.
The new forecast represents a roughly 33% cut from the previous one, but it still sees the electric vehicle ( EV ) manufacturer rallying 75% over the next 12 months.
XPeng shares last closed at $9.07, but a notable 4% uptick in pre-market trading has pushed the price up to $9.44 at the time of writing.
XPEV stock price one-day chart. Source: Google Finance
XPeng stock still under pressure; Wall Street appears bullish
While the market has certainly welcomed today’s uptick, XPEV shares have been under pressure throughout the year. They are now down 11.85% over the past 30 days and 55.6% year-to-date (YTD), reflecting persistent investor concerns about execution and the commercial potential of its technology investments.
However, Wall Street’s average XPEV share price target for the next 12 months still sits at $17.21, according to TipRanks , which implies approximately 89% upside from the current levels. Looking at the analyst compiled by the platform over the past three months, the thesis centres on XPeng’s transformation from a pure electric vehicle manufacturer into a broader physical artificial intelligence ( AI ) company.
XPEV stock 12-month forecast. Source: TipRanks
Of course, the same narrative could also be responsible for the stock pressure, as risks from elevated AI and robotics spending, continued cash burn, overseas tariffs, and weak demand in China are just some of the investors’ concerns.
How does XPeng stock compare to American peers?
XPeng currently trades at a price-to-sales ratio of 0.8x, below its estimated fair ratio of 1.2x and the peer average of 1.4x. As such, the stock trades at a premium to the broader U.S. automotive industry average of 0.5x. This suggests that investors are already assigning some value to its technology-driven growth ambitions.
The key question is thus whether future growth can justify that premium. In other words, if XPeng struggles to convert its investments into sustainable revenue and profitability, the valuation gap could narrow. Conversely, stronger vehicle sales and successful commercialisation of the physical AI initiatives could improve investor sentiment.
F eatured image via Shutterstock
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