Li Auto Announces Earnings Beat, Strong Outlook

Sentiment surrounding the stock is wildly optimistic

Deputy Editor

Feb 27, 2023 at 11:03 AM

Li Auto Inc (NASDAQ:LI) gave the electric vehicle (EV) sector an early-morning boost, after the company's fourth-quarter earnings beat and strong revenue outlook. "We ended the year on a high note," said CEO Xiang Li, "with record deliveries of more than 20,000 vehicles in December, setting a new milestone for our company and emerging new energy automakers in China.” At last glance, LI was down 0.3% to trade at $23.22, however.

Digging deeper, Li Auto stock has been declining since its 320-day moving average rejected a rally in early February. Year-to-date, the equity is still sports a 15% lead.

Analysts and options traders have been quite bullish toward LI. All five brokerages in coverage sport a "buy" or better rating. Plus, at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 50-day call/put volume ratio of 2.11 sits higher than 91% of readings from the past year, showing calls being picked up at a much faster-than-usual rate.

Options traders appear to be sticking with that sentiment today. So far today, 17,000 calls have been exchanged -- triple the intraday average -- in comparison to 9,990 puts. The weekly 3/5 25-strike call is the most popular, with new positions opening there.

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