<div id="readability-page-1"><div><p>Li Auto (LI) is leaning hard into AI driven products, from its sell out Livis smart glasses launch to new in house models for smart driving and robotics, reshaping how some investors frame the stock.</p> <p>See our latest analysis for Li Auto.</p> <p>Despite the AI push and new financing offers, Li Auto’s recent share price performance has been weak, with a 30 day share price return of 7.36% decline and a 90 day share price return of 29.24% decline. The 1 year total shareholder return of 30.46% decline and 5 year total shareholder return of 50.16% decline point to ongoing pressure, suggesting current headlines are arriving against a backdrop of fading momentum rather than a recent upswing.</p> <p>If Li Auto’s AI and EV story has your attention, this could be a good moment to see what else is moving among auto manufacturers.</p> <p>With Li Auto shares sitting well below analysts’ average target and some measures flagging a possible intrinsic discount, the real question is whether the recent weakness sets up a buying opportunity or if markets already see the future growth story clearly priced in.</p> <h2>Price to Earnings of 23.8x: Is it justified?</h2> <p>Li Auto trades on a P/E of 23.8x, which sits above both peer and industry averages, even as the share price has pulled back recently.</p> <p>The P/E multiple links the current share price to earnings per share, so a higher figure usually reflects the market paying up for expected profit growth. For an automaker with a focus on premium smart electric vehicles, a richer P/E often signals that investors are pricing in a stronger earnings path than more mature or slower growing peers.</p> <p>Here, Li Auto is described as expensive versus both a peer average P/E of 20.8x and the global auto industry average of 18.4x, so the market is already attaching a premium to its earnings. However, compared with an estimated fair P/E of 27.2x, its current 23.8x sits below the level our fair ratio work suggests the market could move towards if expectations hold.</p> <p>Explore the SWS fair ratio for Li Auto</p> <p><strong>Result: Price-to-earnings of 23.8x (ABOUT RIGHT)</strong></p> <p>However, the long run story still faces clear risks, including recent share price declines and pressure on Li Auto to sustain revenue and net income growth of 16.2% and 33.2%, respectively.</p> <p>Find out about the key risks to this Li Auto narrative.</p> <h2>Another View on Value</h2> <p>Our DCF model suggests Li Auto shares are trading at a 28.6% discount to an estimated fair value of US$22.03, which points to an undervalued signal rather than an already stretched price. Put simply, the cash flow view is more generous than the earnings multiple. Which lens do you trust more?</p> <p>Look into how the SWS DCF model arrives at its fair value.</p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/9eb69e11-e6b7-42a1-afa3-9f2354e8ac7f/chart/dcf?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/9eb69e11-e6b7-42a1-afa3-9f2354e8ac7f/chart/dcf"/><figcaption>LI Discounted Cash Flow as at Jan 2026</figcaption></figure><p>Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Li Auto for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 877 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.</p> <h2> Build Your Own Li Auto Narrative</h2> <p>If you see the numbers differently or prefer to stress test the assumptions yourself, you can spin up your own view in just a few minutes: Do it your way.</p> <p>A great starting point for your Li Auto research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.</p> <h2>Ready for more investment ideas beyond Li Auto?</h2> <p>If Li Auto has sparked your curiosity, do not stop here. Broaden your watchlist and compare it against other clear setups that might better fit your approach.</p> <ul> <li>Spot early movers by checking out these 3532 penny stocks with strong financials that pair low share prices with solid underlying metrics.</li> <li>Zero in on future facing trends with these 23 AI penny stocks focused on companies tied to artificial intelligence themes.</li> <li>Prioritise value by scanning these 877 undervalued stocks based on cash flows that may offer prices below what their cash flows suggest.</li> </ul> <p><em> This article by Simply Wall St is general in nature. <strong>We provide commentary based on historical data     and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice.</strong> It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your     financial situation. We aim to bring you long-term focused analysis driven by fundamental data.     Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.     Simply Wall St has no position in any stocks mentioned.</em></p></div></div>

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<p>Li Auto (LI) is focusing on AI-driven products, including the Livis smart glasses and new smart driving models. Despite this push, the company's share price has declined significantly, with a 30-day return of -7.36% and a 1-year return of -30.46%. Li Auto's P/E ratio of 23.8x is above industry averages, indicating a premium for expected growth. However, a DCF analysis suggests shares are undervalued at a 28.6% discount to an estimated fair value of $22.03. Investors are encouraged to consider both earnings multiples and cash flow perspectives when evaluating Li Auto's potential.</p>

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Assessing Li Auto (NasdaqGS:LI) Valuation As AI Push And Livis Smart Glasses Redefine Its Growth Story