XPeng's profitability has been impacted this year by concerns about China's shutdown and supply chain headwinds. However, the market may be overestimating the impact of these challenges on the company's long-term prospects. You might wish to explore XPEV with its recent reduction in price before the present problems settle up.

China's newest round of novel coronavirus pandemic lockdowns, as well as ongoing supply chain challenges, have harmed this year. As a result, these difficulties may have an impact on the company's financial performance this quarter. That isn't to imply that the "narrative" of this former "hot stock" has altered altogether.

The automaker is expected to return to robust sales and delivery growth once the current challenges are resolved. As a result, Xpeng will begin to reduce its losses and approach profitability. So, before this plays out, you might wish to consider XPENG stock while it is still trading significantly below previous highs. It would be one thing if XPeng's decline was only attributable to the market's diminishing interest in growth stocks.

Yet, more important the issues affecting the Chinese EV industry at this time are the lockdowns in China’s major cities that has severely affected EV production since spring. This, of course, had some impact on its results in the first quarter of fiscal year 2022. Revenue for Q1 2022 was down 14.5% quarter-over-quarter, while up 149% year-over-year (YOY).

Long Term Remains Promising

While the aforementioned headwinds are having an impact on production, this does not imply that demand is suffering. Not to mention the Chinese government's goal for widespread adoption of electric vehicles. All of this indicates to the space's sustained expansion, as well as outsized growth for EV manufacturers like XPeng, once the production bottlenecks are handled.

Nevertheless, if you're positive on electric vehicle companies, you might want to investigate it because it's holding consistent in the mid $20s per share. It had been growing at a rapid pace before the present problems, and is expected to resume that pace once the problems are resolved. Once investor interest returns, XPENG stock is set to make a dramatic comeback.

21 analysts recommend XPENG as a buy compared with 19 in March and 16 in February. JP Morgan, Barclays and Bank of America have all upgraded XPENG to a strong buy.

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