Stellantis (NYSE:STLA) & Li Auto (NASDAQ:LI) Critical Contrast

Li Auto (NASDAQ:LI) and Stellantis (NYSE:STLA) are both large-cap consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Analyst Ratings

This is a breakdown of recent ratings for Li Auto and Stellantis, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Li Auto	2	11	0	0	1.85
Stellantis	7	10	1	2	1.90

Li Auto presently has a consensus target price of $16.28, suggesting a potential upside of 46.75%. Stellantis has a consensus target price of $7.38, suggesting a potential upside of 57.81%. Given Stellantis’ stronger consensus rating and higher possible upside, analysts plainly believe Stellantis is more favorable than Li Auto.

Institutional & Insider Ownership

9.9% of Li Auto shares are owned by institutional investors. Comparatively, 59.5% of Stellantis shares are owned by institutional investors. 48.5% of Li Auto shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Li Auto has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500. Comparatively, Stellantis has a beta of 1.49, meaning that its stock price is 49% more volatile than the S&P 500.

Earnings and Valuation

This table compares Li Auto and Stellantis”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Li Auto	$16.06 billion	0.72	$160.79 million	($0.67)	-16.56
Stellantis	$160.86 billion	0.11	-$25.31 billion	$0.39	11.99

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Li Auto	-4.44%	-6.58%	-3.14%
Stellantis	N/A	N/A	N/A

Summary

Stellantis beats Li Auto on 12 of the 15 factors compared between the two stocks.

About Li Auto

Li Auto Inc. operates in the energy vehicle market in the People's Republic of China. It designs, develops, manufactures, and sells premium smart electric vehicles. The company's product line comprises MPVs and sport utility vehicles. It offers sales and after sales management, and technology development and corporate management services, as well as purchases manufacturing equipment. The company offers its products through online and offline channels. 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, the People's Republic of China.

About Stellantis

Stellantis N.V. engages in the design, engineering, manufacturing, distribution, and sale of automobiles and light commercial vehicles, engines, transmission systems, metallurgical products, mobility services, and production systems worldwide. It provides luxury and premium vehicles; sport utility vehicles; American and European brand vehicles; and parts and services, as well as retail and dealer financing, leasing, and rental services. The company offers its products under the Abarth, Alfa Romeo, Chrysler, Citroën, DS, Dodge, Fiat, Jeep, Maserati, Ram, Opel, Lancia, Vauxhall, Peugeot, and Comau brand names through distributors and dealers. Stellantis N.V. was founded in 1899 and is based in Hoofddorp, the Netherlands.