Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating Tesla (NASDAQ:TSLA) in comparison to its major competitors within the Automobiles industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company’s performance in the industry.
Tesla Background
Tesla is a vertically integrated battery electric vehicle automaker and developer of real world artificial intelligence software, which includes autonomous driving and humanoid robots. The company has multiple vehicles in its fleet, which include luxury and midsize sedans, crossover SUVs, a light truck, and a semi truck. Tesla also plans to begin selling a sports car and offer a robotaxi service. Global deliveries in 2024 were a little below 1.8 million vehicles. The company sells batteries for stationary storage for residential and commercial properties including utilities and solar panels and solar roofs for energy generation. Tesla also owns a fast-charging network and an auto insurance business.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Tesla Inc | 302.90 | 18.27 | 16.18 | 1.75% | $3.66 | $5.05 | 11.57% |
| Toyota Motor Corp | 10.24 | 1.26 | 0.96 | 2.54% | $1824.36 | $1968.84 | 8.15% |
| General Motors Co | 15.50 | 1.14 | 0.44 | 1.95% | $5.74 | $3.11 | -0.34% |
| Ferrari NV | 33.84 | 14.26 | 7.66 | 10.42% | $0.67 | $0.88 | 7.4% |
| Ford Motor Co | 11.83 | 1.16 | 0.29 | 5.29% | $3.67 | $4.3 | 9.39% |
| Li Auto Inc | 14.85 | 1.58 | 0.84 | -0.86% | $-0.71 | $4.47 | -36.17% |
| Thor Industries Inc | 21.68 | 1.41 | 0.62 | 0.5% | $0.11 | $0.32 | 11.5% |
| Winnebago Industries Inc | 36.01 | 1.05 | 0.45 | 0.45% | $0.03 | $0.09 | 12.32% |
| Workhorse Group Inc | 0.07 | 1.46 | 0.34 | -28.77% | $-0.01 | $-0.01 | -4.97% |
| Average | 18.0 | 2.92 | 1.45 | -1.06% | $229.23 | $247.75 | 0.91% |
Through a meticulous analysis of Tesla, we can observe the following trends:
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At 302.9, the stock’s Price to Earnings ratio significantly exceeds the industry average by 16.83x, suggesting a premium valuation relative to industry peers.
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The elevated Price to Book ratio of 18.27 relative to the industry average by 6.26x suggests company might be overvalued based on its book value.
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With a relatively high Price to Sales ratio of 16.18, which is 11.16x the industry average, the stock might be considered overvalued based on sales performance.
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The company has a higher Return on Equity (ROE) of 1.75%, which is 2.81% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.66 Billion is 0.02x below the industry average, suggesting potential lower profitability or financial challenges.
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With lower gross profit of $5.05 Billion, which indicates 0.02x below the industry average, the company may experience lower revenue after accounting for production costs.
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The company’s revenue growth of 11.57% exceeds the industry average of 0.91%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company’s financial health and risk profile, aiding in informed decision-making.
By analyzing Tesla in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
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Tesla demonstrates a stronger financial position compared to its top 4 peers in the sector.
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With a lower debt-to-equity ratio of 0.17, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.
Key Takeaways
The high PE, PB, and PS ratios suggest that Tesla is relatively overvalued compared to its peers in the Automobiles industry. On the other hand, the high ROE and revenue growth indicate strong profitability and potential for future growth. However, the low EBITDA and gross profit figures may raise concerns about Tesla’s operational efficiency and financial health when compared to industry competitors.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
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