XPEL, Inc. (XPEL): A Bull Case Theory

We came crossed a bullish thesis connected XPEL, Inc. connected Capital Light’s Substack by Luke Wolgram. In this article, we volition summarize the bulls’ thesis connected XPEL. XPEL, Inc.'s stock was trading astatine $53.49 arsenic of January 26th. XPEL’s trailing P/E was 31.46  according to Yahoo Finance.

Photo by Yannis Zaugg connected Unsplash

XPEL, Inc. manufactures, installs, sells, and distributes protective films, coatings and related services. XPEL has transitioned from a axenic maturation communicative to a absorption connected some maturation and borderline expansion, reflecting its evolving strategy and marketplace maturity.

In Q3 2025, the institution bushed gross expectations with $125 million, supra analysts’ $119 cardinal forecast, but missed connected nett income and EPS, reporting $0.47 versus $0.52 expected, owed to lower-than-anticipated margins. Guidance for Q4 gross came successful astatine $123–125 million, boosted by the caller acquisition of Xpel’s Chinese distributor, which volition beryllium afloat reflected successful upcoming results.

The China woody added complexity to the equilibrium sheet, with short-term liabilities of $23 million—including contingent information for inventory—and semipermanent liabilities of $12.6 cardinal tied to deferred payments. This acquisition is strategically significant, giving Xpel complete power implicit China, its third-largest gross market, wherever maturation had stalled owed to competition, regulatory challenges, and distributor inefficiencies.

Xpel’s broader strategy of going nonstop done distributor acquisitions has proven palmy globally, driving accelerated maturation successful markets similar France, Japan, and India. The China acquisition completes this approach, allowing for optimized bid timing, amended training, and IP protection, mounting the signifier for renewed growth. Additionally, absorption announced plans to bring movie manufacturing in-house implicit the adjacent 3 years, a $75–150 cardinal concern that could assistance gross margins to the mid-50s and operating margins into the precocious 20s by 2028, astir doubling today’s profitability.

Investors person responded positively, with shares climbing to the debased $50s contempt a weaker quarter, reflecting assurance successful the China strategy, borderline enlargement initiatives, and broader optimism toward small-cap names. Xpel now represents a compelling premix of gross maturation and borderline leverage, with strategical moves positioning it for sustainable semipermanent profitability.

Previously, we covered a bullish thesis on XPEL, Inc. (XPEL) by Reasonable-Green-464 successful January 2025, which highlighted the company’s beardown maturation successful the automotive aftermarket, planetary expansion, and strategical partnerships with Tesla, Rivian, and BMW. XPEL’s banal terms has appreciated by 23.36% since our coverage. Luke Wolgram shares a akin thesis but emphasizes XPEL’s displacement to maturation with borderline expansion, focusing connected the China distributor acquisition and in-house manufacturing plans.