Analyzing Tesla In Comparison To Competitors In Automobiles Industry

In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing Tesla (NASDAQ:TSLA) alongside its primary competitors in the Automobiles industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer valuable insights to investors and shed light on company's performance within 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	331.86	20.01	17.73	1.75%	$3.66	$5.05	11.57%
Toyota Motor Corp	9.65	1.19	0.90	2.54%	$1824.36	$1968.84	8.15%
General Motors Co	15.72	1.16	0.44	1.95%	$5.74	$3.11	-0.34%
Ferrari NV	35.92	15.13	8.13	10.42%	$0.67	$0.88	7.4%
Ford Motor Co	11.51	1.13	0.29	5.29%	$3.67	$4.3	9.39%
Li Auto Inc	15.70	1.67	0.89	-0.86%	$-0.71	$4.47	-36.17%
Thor Industries Inc	20.08	1.30	0.58	0.5%	$0.11	$0.32	11.5%
Winnebago Industries Inc	34.16	1	0.43	1.12%	$0.04	$0.1	7.82%
Workhorse Group Inc	0.07	1.48	0.35	-28.77%	$-0.01	$-0.01	-4.97%
Average	17.85	3.01	1.5	-0.98%	$229.23	$247.75	0.35%

Through an analysis of Tesla, we can infer the following trends:

• At 331.86, the stock's Price to Earnings ratio significantly exceeds the industry average by 18.59x, suggesting a premium valuation relative to industry peers.

• With a Price to Book ratio of 20.01, which is 6.65x the industry average, Tesla might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.

• The stock's relatively high Price to Sales ratio of 17.73, surpassing the industry average by 11.82x, may indicate an aspect of overvaluation in terms of sales performance.

• The Return on Equity (ROE) of 1.75% is 2.73% above the industry average, highlighting efficient use of equity to generate profits.

• The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.66 Billion, which is 0.02x below the industry average. This potentially indicates lower profitability or financial challenges.

• Compared to its industry, the company has lower gross profit of $5.05 Billion, which indicates 0.02x below the industry average, potentially indicating lower revenue after accounting for production costs.

• The company is experiencing remarkable revenue growth, with a rate of 11.57%, outperforming the industry average of 0.35%.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.

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.

When comparing Tesla with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:

• When considering the debt-to-equity ratio, Tesla exhibits a stronger financial position compared to its top 4 peers.

• This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.17, which can be perceived as a positive aspect by investors.

Key Takeaways

For Tesla, the PE, PB, and PS ratios are all high compared to industry peers, indicating overvaluation. However, Tesla's high ROE suggests strong profitability relative to its peers. The low EBITDA and gross profit numbers may raise concerns about operational efficiency. On the other hand, the high revenue growth rate reflects a positive outlook for Tesla's future performance in the Automobiles industry.

This article was generated by Benzinga's automated content engine and reviewed by an editor.