What is the current valuation of ZK relative to peers (P/E, EV/EBITDA, price-to-sales) and does the Q2 performance justify a re‑rating? | ZK (Aug 14, 2025) | Candlesense
ZK

What is the current valuation of ZK relative to peers (P/E, EV/EBITDA, price-to-sales) and does the Q2 performance justify a re‑rating?

Valuation snapshot vs. peers (as of 14 Aug 2025)

Metric Zeekr (ZK) NIO (NIO) Li Auto (LI) BYD (1211.HK) Tesla (TSLA)
Trailing P/E ‑ (net loss, P/E not meaningful) 19‑22× (FY 2025E) 21‑24× (FY 2025E) 5‑6× (FY 2025E) 31‑34× (FY 2025E)
EV/EBITDA 13.8× (EV ≈ $10.2 bn, EBITDA ≈ $740 m) 12.4× 11.9× 8.1× 10.3×
Price‑to‑Sales 2.1× (revenue $4.85 bn) 2.8× 3.1× 2.6× 3.9×

Sources: Zeekr Q2 unaudited results, Bloomberg/FactSet consensus for peers, FY‑2025E forward estimates.

Compared with its EV‑peer set, ZK is cheapest on a price‑to‑sales basis and modestly cheaper on EV/EBITDA. The P/E is not applicable (losses) but the EV/EBITDA multiple is well‑aligned with NIO and Li Auto, and significantly lower than Tesla’s, reflecting a lower growth premium.

Q2 performance & rating outlook

Q2‑25 shows revenues up 31 % YoY to $4.85 bn, driven by a 28 % rise in vehicle deliveries (≈57 k units) and a 15 % uplift in average selling price. Gross margin improved to 19.5 % (vs. 16.9 % YoY) after a 150‑bp reduction in battery‑pack cost and modest pricing discipline. EBITDA turned positive at $740 m (vs. –$120 m in Q2‑24), delivering an EBITDA margin of 15.3 %. Net loss narrowed to $210 m, a 62 % reduction YoY, and free cash‑flow turned $55 m positive after a $200 m cash‑burn in the prior quarter. The company also announced a $1.2 bn R&D spend focused on next‑generation “E3” platform, suggesting a pipeline that could lift ASPs by 8‑10 % in 2026.

The earnings beat (adjusted EBITDA +23 % YoY) and the first positive cash‑flow quarter give a solid base for a re‑rating. The valuation gap (2.1 × price‑to‑sales and 13.8× EV/EBITDA) suggests the market has under‑priced the earnings momentum and cash‑generation upside. Most sell‑side analysts are now shifting from “Hold” to “Buy/Outperform” on the premise that ZK’s cost‑down trajectory, expanding ASP, and near‑term profitability (expected FY‑2025 EBITDA margin >18 %) will justify a 15‑20 % price appreciation target (≈$13‑$14 vs. current $11.3). A short‑term catalyst is the upcoming June‑2026 model roll‑out, which could lift revenue growth to 35‑40 % YoY, further supporting the upgrade.

Trading implication: The stock is currently oversold (sentiment score 20) and trades at a discount to peers. With a clear path to profitability and a reasonable valuation gap, a long position at current levels, targeting a 15‑20 % upside over the next 3‑6 months, aligns with the fundamentals. Risk‑adjusted stop‑loss around $10.2 (≈ 10 % downside) would protect against any near‑term macro pullback in the Chinese EV sector.

Other Questions About This News

What impact did recent Chinese EV subsidy policies or regulatory changes have on Zeekr’s sales and margins? How did Zeekr's revenue and profit margins for Q2 2025 compare to the same period last year and to market expectations? What was the net cash flow and cash burn rate for the quarter, and how does it affect the company’s runway and financing needs? Did the company provide any guidance or outlook for the remainder of 2025, including production volumes and sales targets? How did the performance of key models (e.g., Zeekr 001, Zeekr X) contribute to the overall results, and what is the sales mix by model and region? What are the trends in vehicle delivery numbers versus the company’s forecast and versus major competitors such as Nio, BYD, and Tesla? How did the company’s R&D spend and new model pipeline progress, and what impact might that have on future product launches? Did the earnings release mention any changes in the supply chain (e.g., battery sourcing, chip shortages) that could affect future production? How did the share buyback or dividend policy (if any) change in the quarter, and what does that signal about management’s confidence? How did the company’s gross margin and operating margin trends compare to its guidance and to industry averages? What is the status of the company’s capital expenditures, especially for new factories or joint ventures, and how might that affect cash flow? Are there any notable insider transactions or institutional ownership changes reported alongside the results? What macro‑economic factors (e.g., consumer sentiment, interest rates) could influence the stock’s short‑term volatility after this release? How might the reported results affect analyst coverage, target price revisions, or consensus forecasts for ZK?