Is XPEL a good stock to buy?
XPEL stock dips 10.65% despite strong long-term growth forecasts
We came across a bullish thesis on XPEL, Inc. on Capital Light's Substack by Luke Wolgram. In this article, we will summarize the bulls' thesis on XPEL. XPEL, Inc.'s share was trading at $38.74 as of March 20th. XPEL's trailing P/E was 20.97 according to Yahoo Finance.
XPEL, Inc. manufactures, installs, sells, and distributes protective films, coatings and related services. XPEL presents a compelling growth story driven by both top-line expansion and margin improvement. The company is expected to grow revenue by 13% in 2025, followed by a 10% annual increase from 2026 through 2029, tapering to 5% in 2030, slightly above market expectations of roughly 10% growth. Management has highlighted the potential for gross margins to expand to 50-52% by 2030 through in-house manufacturing, reflecting operational leverage that enhances profitability.
Operating expenses are being carefully managed, with Sales and Marketing spending gradually rising to 11% of revenue while General and Administrative costs decline from 18% to 16% of revenue over the same period. Depreciation and amortization are projected at 3% of revenue, CAPEX at 2.5%, and net working capital changes at 3%, supporting steady cash flow generation.
Based on these assumptions, XPEL's earnings per share are expected to increase from $2.47 in 2026 to $5.25 by 2030, representing a 16% CAGR, while free cash flow grows from $56.3 million to $128.7 million, an 18% CAGR. The resulting discounted cash flow analysis assigns a fair equity value of $54.32 per share, implying upside potential relative to the current market price if the company outperforms consensus revenue growth expectations while maintaining or improving margins. With a modestly increasing share count reaching 27.8 million by 2030, XPEL's capital structure remains manageable, supporting sustainable growth. Overall, XPEL offers an attractive risk/reward profile, combining durable revenue growth, margin expansion, and strong free cash flow generation, making it a strategically appealing investment for shareholders seeking both growth and value realization.
Previously, we covered a bullish thesis on XPEL, Inc. (XPEL) by Reasonable-Green-464 in January 2025, which highlighted the company's brand strength, product diversification, international expansion, and partnerships with Tesla and Rivian. XPEL's stock price has depreciated by approximately 10.65% since our coverage as primarily following a Q4 2025 revenue miss and weaker-than-expected Q1 2026 guidance. Luke Wolgram shares a similar view but emphasizes projected revenue growth and margin expansion through 2030 with in-house manufacturing and cost discipline.
