Critical Analysis: Renault (OTCMKTS:RNLSY) and Li Auto (NASDAQ:LI)

Renault (OTCMKTS:RNLSY) and Li Auto (NASDAQ:LI) are both auto/tires/trucks companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, risk, valuation, dividends, profitability, earnings and institutional ownership.

Volatility & Risk

Renault has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500. Comparatively, Li Auto has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Renault and Li Auto, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Renault	2	3	1	0	1.83
Li Auto	4	10	1	1	1.94

Li Auto has a consensus target price of $17.30, indicating a potential upside of 20.98%. Given Li Auto’s stronger consensus rating and higher possible upside, analysts clearly believe Li Auto is more favorable than Renault.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Renault	N/A	N/A	N/A
Li Auto	-1.72%	-2.58%	-1.22%

Insider & Institutional Ownership

9.9% of Li Auto shares are held by institutional investors. 48.5% of Li Auto shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Renault and Li Auto”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Renault	$65.52 billion	0.14	-$12.37 billion	N/A	N/A
Li Auto	$16.06 billion	0.95	$160.79 million	($0.28)	-51.07

Li Auto has lower revenue, but higher earnings than Renault.

Summary

Li Auto beats Renault on 7 of the 12 factors compared between the two stocks.

About Renault

Renault SA engages in the design, manufacture, sale, repair, maintenance, and leasing of motor vehicles in Europe, Eurasia, Africa, the Middle East, the Asia Pacific, and the Americas. It also engages in the design and production of parts and equipment used for manufacturing and operation vehicles. The company operates through Automotive, Sale Financing, and Mobility Services segments. Its Automotive segment produces, sells, and distributes passenger cars and light commercial vehicles; and invests in automotive-sector associates and joint ventures primarily in Nissan. The company's Sale Financing segment offers sale financing, leasing, maintenance, and services contract under the Mobilize Financial Services brand. Its Mobility Services segment provides mobility and energy solutions for electric vehicle users under the Mobilize brand. In addition, it is also involved in the design, manufacture, and sale of passenger cars and light commercial vehicles under the Renault, Dacia, Alpine, and Mobilize brands. Further, the company offers used vehicles and spare parts; and engages in business-to-business powertrain activities, and research and advanced engineering activities. Renault SA was founded in 1898 and is based in Boulogne-Billancourt, France.

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.