Xiaomi (SEHK:1810): Exploring Whether the Stock Remains Undervalued After Recent Gains

Xiaomi (SEHK:1810) shares have shown mixed performance recently, with the stock losing ground over the past month but still delivering substantial gains over the past year. For investors, these swings offer potential opportunities and raise questions about what might drive the next move.

See our latest analysis for Xiaomi.

Xiaomi’s share price has had a whirlwind year, rallying impressively for a 20.65% gain year-to-date, but most recently cooling off with a 30-day share price return of -8.7%. Despite fading momentum in the very short term, investors who held on for the long haul have been rewarded with a remarkable 47.8% total shareholder return over the past year and more than 300% over three years. This underscores just how fast sentiment can shift around innovative tech names like this.

If Xiaomi’s journey has you rethinking what’s next, use this moment to expand your search and discover fast growing stocks with high insider ownership

But with rapid growth and a strong rebound already factored into the stock over the past year, investors are left wondering whether Xiaomi is undervalued at these levels or if all the future growth is already priced in.

Most Popular Narrative: 29.1% Undervalued

With Xiaomi’s last close at HK$41.02 and the most followed narrative suggesting a fair value near HK$57.89, the gap between current price and perceived potential is drawing attention. The narrative is based on ambitious expansion and future margin gains that many believe could reshape Xiaomi’s earnings profile.

*Accelerated R&D investments in core areas like AI, chips, smart EVs, and connected hardware enable differentiated offerings and ecosystem lock-in. This allows Xiaomi to keep pace with the trend of AI-hardware-software convergence. Over time, these capabilities could support the expansion of higher-margin services and recurring revenue, strengthening earnings resilience.*

Read the complete narrative.

Curious about the bold forecast driving this narrative’s premium? The main factors are aggressive growth targets, anticipated margin improvements, and a debated future profit multiple. Want to learn what underpins this valuation difference and what types of financial expectations analysts are considering? Explore further to see the numbers and analysis shaping current market debates.

Result: Fair Value of $57.89 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, slowing smartphone growth and fierce international competition could challenge Xiaomi’s margin expansion and ongoing pace of global revenue gains.

Find out about the key risks to this Xiaomi narrative.

Build Your Own Xiaomi Narrative

If you want to challenge this perspective or explore the numbers on your terms, it only takes a few minutes to shape your own view. Do it your way

A great starting point for your Xiaomi research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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