WeRide Inc. WRD shares have sunk 8.8% since it reported its fourth-quarter 2024 loss of 29 cents per share. The company reported total revenues of $19.3 million. Product revenues increased due to stronger sales of robotaxis, robosweepers and robovans in the fourth quarter, partially offset by a fall in the sale of robobuses. However, service revenues decreased due to a drop in revenues from ADAS research and development services, and operational and technical support services. 

Over the past three months, WRD shares have risen 11.4%, outperforming the Zacks Auto, Tires & Trucks sector’s loss of 30.3% and the Zacks Automotive – Original Equipment industry’s decline of 3%. The S&P 500 index has dropped 4.8% in the same period. 

Nonetheless, WeRide shares have lagged industry peers like China Yuchai International CYD and Dana DAN in the same period. CYD and DAN shares have surged 157.8% and 22.9%, respectively, over the past three months.

Three-Month Performance

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So, is this the right time for investors to buy the dip? Let us dig deep to find out.

Expanding Footprint Bodes Well for WRD

WeRide is greatly benefiting from its rich partner network and expanding global footprint. With the support of the Abu Dhabi Integrated Transport Centre and its collaboration with Uber Technologies UBER, the company is expanding its commercial robotaxi services in Abu Dhabi, United Arab Emirates. WRD expects the number of robotaxis to reach 50 by mid-2025 on the UBER Platform, marking a significant milestone for the company in the Middle East.

In the Chinese market, WeRide has recently officially obtained the permit to conduct commercial robotaxi ride-hailing services between the Beijing Economic-Technological Development Area (BDA) and Beijing South Railway Station. This is the first commercial robotaxi operation covering Beijing’s core urban area. The company has also received approval to launch its latest generation robotaxi, the GXR, for fully unmanned paid ride-hailing services in Beijing. 

The inauguration of commercial operations of the Tianhe BRT robobus shuttle line in Guangzhou has also been noteworthy. It is the first autonomous shuttle to navigate the BRT system in Guangzhou’s city center, which operates at night in a tier-one Chinese city, offering a safe and convenient option for nighttime commuters. 

WRD’s selection as the technology provider for the first autonomous driving robotaxi project funded by the Canton of Zurich and the Swiss national railway and managed by the Swiss Transit Lab (STL) is expected to boost the company’s prospects in the European markets. WeRide has also deployed its autonomous robobus shuttle service at the Zurich Airport, becoming one of the first autonomous bus shuttle projects at a European airport. 

The company, in partnership with Renault, has recently launched the first autonomous robobus trial in Spain. In collaboration with Beti, Renault and Macif, WeRide launched its first European fully driverless Level-4 robobus commercial deployment in France. 

Rising Costs & Intense Competition Pose Headwinds for WRD

Despite the company’s impressive expansion, WeRide is facing several headwinds that can slow its progress. One major challenge is the high cost of developing and deploying autonomous vehicles. WRD’s research and development expenses have been increasing, along with regulatory compliance costs, putting pressure on the company’s profitability. 

Furthermore, WRD operates in a fiercely competitive landscape. It is competing with well-established global players like Waymo and Tesla, as well as Chinese rivals like Baidu’s Apollo and Pony.ai. These companies are pushing forward with their autonomous driving technologies, making it difficult for WeRide to dominate the market.

The current economic uncertainty is another headwind for the company. Slower economic growth, political tensions like the ongoing tariff war with the United States and weaker consumer demand are expected to affect the adoption of WeRide’s robotaxis and autonomous delivery services. 

WeRide Shares Overvalued

WRD shares are currently overvalued, as suggested by the Value Score of F. In terms of the forward 12-month price/sales, the stock is currently trading at 17.38X, higher than its median of 2.97X and the broader sector’s 1.08X. 

Price/Sales Ratio (F12M)

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What Do Estimates Say? 

The Zacks Consensus Estimate for WRD’s 2025 revenues is pegged at $170.3 million, indicating year-over-year growth of 244.2%. The consensus mark for 2025 loss is currently pegged at 43 cents per share and has remained unchanged over the past 30 days. 

The Zacks Consensus Estimates for WRD’s 2026 revenues is pegged at $535.31 million, calling for year-over-year growth of 214.34%. The consensus mark for 2026 loss is currently pegged at 23 cents per share and has remained unchanged over the past 30 days.

WeRide Stock: Buy, Sell or Hold?

While WeRide’s expanding global footprint and strong partner network are promising, its pricey valuation and falling service revenues warrant a rather cautious approach. Its Growth Score of C makes the stock unattractive for growth-oriented investors.

WRD currently carries a Zacks Rank #3 (Hold), implying that it may be wise for investors to wait for a more favorable entry point in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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