Ricardo Pillai
3 min read
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.
An assembly line of electric cars moving along a production line.
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.
