Performance Comparison: Tesla And Competitors In Automobiles Industry

In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing Tesla (NASDAQ:TSLA) alongside its primary competitors in the Automobiles industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide 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	310.15	18.70	16.57	1.75%	$3.66	$5.05	11.57%
Toyota Motor Corp	9.47	1.16	0.89	2.54%	$1824.36	$1968.84	8.15%
General Motors Co	15.52	1.14	0.44	1.95%	$5.74	$3.11	-0.34%
Ferrari NV	35.07	14.78	7.94	10.42%	$0.67	$0.88	7.4%
Ford Motor Co	11.21	1.10	0.28	5.29%	$3.67	$4.3	9.39%
Li Auto Inc	15.55	1.65	0.88	-0.86%	$-0.71	$4.47	-36.17%
Thor Industries Inc	19.45	1.26	0.56	0.5%	$0.11	$0.32	11.5%
Winnebago Industries Inc	31.66	0.93	0.40	0.45%	$0.03	$0.09	12.32%
Workhorse Group Inc	0.07	1.40	0.33	-28.77%	$-0.01	$-0.01	-4.97%
Average	17.25	2.93	1.47	-1.06%	$229.23	$247.75	0.91%

Upon a comprehensive analysis of Tesla, the following trends can be discerned:

• The Price to Earnings ratio of 310.15 for this company is 17.98x above the industry average, indicating a premium valuation associated with the stock.

• The elevated Price to Book ratio of 18.7 relative to the industry average by 6.38x suggests company might be overvalued based on its book value.

• The Price to Sales ratio of 16.57, which is 11.27x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• 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.

• Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.66 Billion, which is 0.02x below the industry average, potentially indicating 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 is experiencing remarkable revenue growth, with a rate of 11.57%, outperforming the industry average of 0.91%.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile of a company.

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:

• Among its top 4 peers, Tesla has a stronger financial position with a lower debt-to-equity ratio of 0.17.

• This indicates that the company relies less on debt financing and maintains a more favorable balance between debt and equity, which can be viewed positively by investors.

Key Takeaways

For Tesla, the PE, PB, and PS ratios are all high compared to industry peers, indicating the stock may be overvalued based on earnings, book value, and sales. However, Tesla's high ROE suggests strong profitability relative to equity, while low EBITDA and gross profit levels may raise concerns about operational efficiency. The high revenue growth rate reflects strong top-line performance compared to competitors in the Automobiles industry.

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