Zeekr stock price has crashed in the past few days as concerns about its business remained. ZK shares dropped in the last four consecutive days and is hovering at its lowest level since March 4. It has dropped by over 20% from its highest point this year, giving it a market cap of over $6.7 billion. So, what next for the ZK shares after earnings?
Zeekr Intelligent Technology earnings
Chinese electric vehicle companies are doing well as demand from customers rise. Most of them have reported strong revenue and delivery numbers in the past few months. This growth happened as more people in the country embraced EVs.
Zeekr Intelligence Technology, a company partially owned by Geely, reported strong financial results. Its numbers showed that it delivered 222,123 in 2024, a big increase from the 118,685 that it delivered a year earlier.
Zeekr’s quarterly deliveries have been in a strong uptrend, a sign that demand is rising. Its fourth-quarter deliveries rose to 79,250 from 39,657 a year earlier.
These deliveries showed that its fourth-quarter revenues jumped by 39.2% to $3.1 billion. It was about 24% increase from the same period a year earlier. Most importantly, the vehicle margin improved from 15.3% to 17.3%, a sign that the company is making a gross profit for each vehicle it sells.
Zeekr’s vehicle sales rose by 63% in 2024 to $7.57 billion, while the total revenue jumped to $10.4 billion. Its annual gross margin rose to 16.4%, while its annual loss narrowed to $793 million, a 29.9% improvement.
Zeekr hopes that its business will continue doing well, helped by its integration with Lynk & Co, which has become it indirect, non-wholly-owned subsidiary. Its growth will also be because of its recent and upcoming product launches. It launched the Zeekr 007GT in January, which will start being delivered in the second quarter of this year.
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ZK stock valuation
Wall Street analysts believe that Zeekr business will continue doing well this year. The average revenue estimate for the current quarter is 21.18 billion yuan, a 43.7% annual growth. This growth will translate to a 56% YoY increase to 118 billion yuan.
Zeekr is expected to have a net loss per share, which will improve from 22 cents last year to 6.86 yuan. It wll then break even next year when it will make a profit-per-share of 8.8 cents.
There are signs that Zeekr is relatively undervalued since it will start turning a profit in the next financial year and is still seeing strong growth. Also, it has a strong balance sheet with over $1 billion in cash, meaning that it may not need to raise more cash this year.
Zeekr stock price analysis
ZK stock chart by TradingView
The daily chart shows that the ZK share price has sharply decreased in the past few days. This decline happened after the stock hit the crucial resistance point at $32.75 and formed a double-top pattern whose neckline was at $23. A double-top is one of the most bearish patterns in the market.
The two lines of the MACD have formed a bearish crossover, while the Relative Strength Index (RSI) has moved below the neutral line of 50. Therefore, the stock will likely continue falling as sellers target the next point at $23. It will then drop to $20, and then bounce back later this year.
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