Analyzing Tesla In Comparison To Competitors In Automobiles Industry

In today's fast-paced and highly competitive business world, it is crucial for investors and industry followers to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Tesla (NASDAQ:TSLA) in relation to its major competitors in the Automobiles industry. By closely examining key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and highlight 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	334.87	20.19	17.89	1.75%	$3.66	$5.05	11.57%
Toyota Motor Corp	9.73	1.20	0.91	2.54%	$1824.36	$1968.84	8.15%
General Motors Co	15.79	1.16	0.44	1.95%	$5.74	$3.11	-0.34%
Ferrari NV	35.62	15.01	8.07	10.42%	$0.67	$0.88	7.4%
Ford Motor Co	11.36	1.12	0.28	5.29%	$3.67	$4.3	9.39%
Li Auto Inc	15.42	1.64	0.88	-0.86%	$-0.71	$4.47	-36.17%
Thor Industries Inc	20.10	1.31	0.58	0.5%	$0.11	$0.32	11.5%
Winnebago Industries Inc	33.43	0.98	0.42	0.45%	$0.03	$0.09	12.32%
Workhorse Group Inc	0.07	1.50	0.35	-28.77%	$-0.01	$-0.01	-4.97%
Average	17.69	2.99	1.49	-1.06%	$229.23	$247.75	0.91%

After examining Tesla, the following trends can be inferred:

• Notably, the current Price to Earnings ratio for this stock, 334.87, is 18.93x above the industry norm, reflecting a higher valuation relative to the industry.

• With a Price to Book ratio of 20.19, which is 6.75x 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 Price to Sales ratio of 17.89, which is 12.01x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• 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.

• With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.66 Billion, which is 0.02x below the industry average, the company may face lower profitability or financial challenges.

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

• The company's revenue growth of 11.57% is notably higher compared to the industry average of 0.91%, showcasing exceptional sales performance and strong demand for its products or services.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its equity.

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 assessing Tesla against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:

• Tesla has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.17.

• This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator by investors.

Key Takeaways

For Tesla, the PE, PB, and PS ratios are all high compared to industry peers, indicating a potentially overvalued stock. On the other hand, Tesla's high ROE suggests strong profitability, while low EBITDA and gross profit levels may raise concerns about operational efficiency. Additionally, the high revenue growth rate reflects a positive outlook for the company's future performance within the Automobiles industry.

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