XPeng stock is still at risk despite reporting its first profit: what next?

XPeng stock price has held steady in the past few days, helped by the recent financial results, which showed that it made its first quarterly profit.

XPEV was trading at $18.85 on Wednesday, up 23% from its lowest point this year. What's next for this Chinese EV giant?

XPeng delivers first quarterly profit, but potential risks remain 

XPeng, a top Chinese electric vehicle company, has held relatively steady this month, helped by the recent financial results, which showed that its business made a profit for the first time ever.

Financial results released last week showed that the company's revenue and profitability continued growing in the fourth quarter.

The company’s revenue jumped to $3.18 billion in the fourth quarter, up by 38.2% from the same period in 2024. Most of this revenue was from its vehicles, which came at $2.73 billion.

XPeng’s vehicle margins continued growing, with the gross margin rising to 13% from 10% in the same period a year earlier.

The company has more room to grow its margin as companies like Nio and Li Auto have multiples of 16% and 18%.

The company made a net profit of $0.05 billion, much higher than the RMB 1.3 billion loss made in the fourth quarter of 2024.

This was a major milestone, and analysts believe that the company has more room to grow in the coming months as vehicle deliveries rise.

The most recent numbers showed that XPeng delivered 15,256 vehicles in February after selling 20,011 in January.

Vehicle sales often drop in February because of the long holiday. It expects to deliver between 61k and 66k vehicles during the first quarter.

Also, the company expects that its Q1 revenue will drop by between 16% and 22% YoY.

For the year, the company made $10.87 billion, up by 87.7%, with its vehicle sales rising by 90% during the year. Its annual net loss was $0.16 billion.

XPeng is facing some major headwinds, including the rising competition in China, with companies like Tesla, Li Auto, and Nio vying for market share.

Also, Chinese sales may come under pressure in the near term as authorities have reduced some of the existing incentives.

XPeng stock price technical analysis 

XPEV stock chart | Source: TradingView 

The three-day chart shows that the XPEV stock price has rebounded in the past few weeks, moving from a low of $15.42 on March 2nd to the current $18.85.

It has moved between the 50% and 38.2% Fibonacci Retracement level.

Also, the stock remains below the Supertrend indicator and the 50-day and 100-day Exponential Moving Averages (EMA).

The stock also formed a double-top pattern at $27 and a neckline at the 50% Fibonacci Retracement level at $17.43. 

Therefore, the stock will likely remain under pressure in the coming weeks, potentially to the key support level at $15.42. A drop below that price will point to further downside, potentially to the 61.8% retracement level at $14.90. 

On the other hand, a bullish breakout will be confirmed when the Supertrend indicator flips from red to green and moves above the 50-day and 100-day Exponential Moving Averages.