Critical Survey: Volkswagen (OTCMKTS:VWAGY) and Li Auto (NASDAQ:LI)

Volkswagen (OTCMKTS:VWAGY) and Li Auto (NASDAQ:LI) are both large-cap auto/tires/trucks companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, valuation, dividends, institutional ownership, profitability and risk.

Profitability

This table compares Volkswagen and Li Auto’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Volkswagen 4.91% 9.20% 2.31%
Li Auto N/A N/A N/A

Analyst Recommendations

This is a summary of recent ratings and price targets for Volkswagen and Li Auto, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Volkswagen 1 6 11 0 2.56
Li Auto 0 2 11 0 2.85

Li Auto has a consensus price target of $40.57, suggesting a potential upside of 50.27%. Given Li Auto’s stronger consensus rating and higher possible upside, analysts clearly believe Li Auto is more favorable than Volkswagen.

Valuation & Earnings

This table compares Volkswagen and Li Auto’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Volkswagen $265.83 billion 0.68 $10.13 billion $1.98 18.18
Li Auto $1.45 billion 16.85 -$23.24 million ($0.16) -168.75

Volkswagen has higher revenue and earnings than Li Auto. Li Auto is trading at a lower price-to-earnings ratio than Volkswagen, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

0.0% of Volkswagen shares are held by institutional investors. Comparatively, 11.8% of Li Auto shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Volkswagen beats Li Auto on 7 of the 11 factors compared between the two stocks.

Volkswagen Company Profile

Volkswagen AG engages in the production and sale of passenger cars and light commercial vehicles. The firm also develops vehicles and components for the brands of the group. It operates through following segments: Passenger Cars, Commercial Vehicles, Power Engineering, and Financial Services. The Passenger Cars segment covers the development of vehicles and engines; production and sale of passenger cars and light commercial vehicles; and the corresponding genuine parts business. The Commercial Vehicles segment covers the development, production, and sale of light commercial vehicles, trucks, and buses; and the corresponding genuine parts business and related services. The Power Engineering segment deals with the development and production of large-bore diesel engines, turbo compressors, industrial turbine,s and chemical reactor systems; and the production of gear units, propulsion component,s and testing systems. The Financial Services segment involves dealer and customer financing, leasing, banking, insurance, fleet management services. The company was founded on May 28, 1937 and is headquartered in Wolfsburg, Germany.

Li Auto Company Profile

Li Auto Inc., through its subsidiaries, designs, develops, manufactures, and sells smart electric sport utility vehicles (SUVs) in China. It offers Li ONE, a six-seat electric SUV that equipped with a range of extension system and smart vehicle solutions. The company was formerly known as Leading Ideal Inc. and changed its name to Li Auto Inc. in July 2020. Li Auto Inc. was founded in 2015 and is headquartered in Beijing, China.

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