Industry Comparison: Evaluating Tesla Against Competitors In Automobiles Industry

Amidst today's fast-paced and highly competitive business environment, it is crucial for investors and industry enthusiasts to conduct comprehensive company evaluations. 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	313.40	18.90	16.74	1.75%	$3.66	$5.05	11.57%
Toyota Motor Corp	9.51	1.17	0.89	2.54%	$1824.36	$1968.84	8.15%
General Motors Co	15.71	1.16	0.44	1.95%	$5.74	$3.11	-0.34%
Ferrari NV	35.28	14.86	7.99	10.42%	$0.67	$0.88	7.4%
Ford Motor Co	11.31	1.11	0.28	5.29%	$3.67	$4.3	9.39%
Li Auto Inc	15.93	1.69	0.90	-0.86%	$-0.71	$4.47	-36.17%
Thor Industries Inc	19.74	1.28	0.57	0.5%	$0.11	$0.32	11.5%
Winnebago Industries Inc	32.15	0.94	0.40	0.45%	$0.03	$0.09	12.32%
Workhorse Group Inc	0.07	1.45	0.34	-28.77%	$-0.01	$-0.01	-4.97%
Average	17.46	2.96	1.48	-1.06%	$229.23	$247.75	0.91%

Upon analyzing Tesla, the following trends can be observed:

• The current Price to Earnings ratio of 313.4 is 17.95x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.

• The elevated Price to Book ratio of 18.9 relative to the industry average by 6.39x suggests company might be overvalued based on its book value.

• With a relatively high Price to Sales ratio of 16.74, which is 11.31x the industry average, the stock might be considered overvalued based on sales performance.

• With a Return on Equity (ROE) of 1.75% that is 2.81% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.

• 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 gross profit of $5.05 Billion is 0.02x below that of its industry, suggesting potential 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 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 evaluating Tesla alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:

• 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

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 within the industry sector.

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