XPEL, Inc. (XPEL): A Bull Case Theory

We came across a bullish thesis on XPEL, Inc. (XPEL) on Leeder Capital’s Substack. In this article, we will summarize the bulls’ thesis on XPEL. XPEL, Inc. (XPEL)’s share was trading at $36.95 as of 6th June. XPEL’s trailing P/E was 21.48 according to Yahoo Finance.

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Xpel has emerged as a dominant force in automotive protective films and adjacent sectors through a relentless focus on product excellence, strategic expansion, and brand-driven growth. Founded in 1997, the company endured near-bankruptcy in 2009 before rebounding through innovations like its Design Access Platform and self-healing Xpel Ultimate film. These breakthroughs established Xpel as a premium player in paint protection film (PPF), laying the groundwork for long-term growth.

Annual revenue has surged from $3 million in 2009 to $420 million in 2024, with operating income reaching $59 million. Though the stock has corrected over 75% from its 2021 peak, this disconnect from the company’s fundamentals presents an intriguing opportunity. Xpel now generates 76% of revenue from product sales and 24% from services, with automotive accounting for over 90% of total revenue.

It has strategically expanded into window tint, architectural film, ceramic coatings, and marine applications, lowering PPF concentration to two-thirds of product revenue while increasing share of wallet and total addressable market. International acquisitions have deepened market control, improving both gross margins and brand consistency. Xpel’s installer-focused model, supported by proprietary software, training, and direct installation centers, creates significant customer stickiness and pricing power.

Despite service segment margin compression, overall gross margins have expanded to 42%, with operating margins doubling to 14% since 2015. Earnings per share have grown at 43.5% CAGR, supported by margin expansion and flat share count. A pristine balance sheet, with no net debt and $23.5 million in cash, adds to its optionality. Xpel exemplifies a capital-efficient compounder with enduring competitive advantages.

Previously, we highlighted a bullish thesis on XPEL from Reasonable-Green-464, which emphasized its premium positioning in paint protection films (PPF), installer-focused model, and strong financial discipline as drivers of long-term growth. That thesis also noted XPEL’s expansion into adjacent categories like window tint and marine coatings, helping diversify revenue and improve margins. The author views XPEL as a capital-efficient niche leader with margin expansion and product-led growth, while Leeder Capital frames it as a macro-driven EV beneficiary with diversified revenue streams and strategic OEM partnerships.

XPEL, Inc. (XPEL) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 8 hedge fund portfolios held XPEL at the end of the first quarter which was 9 in the previous quarter. While we acknowledge the risk and potential of XPEL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.