The automotive sector is a dynamic and competitive industry, where conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Tesla and its primary competitors in the Automobiles industry. By closely examining key financial metrics, market position, and growth prospects, our aim is to provide valuable insights for investors and shed light on the 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 mid-size 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 2025 were nearly 1.64 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.
Comparative Analysis of Tesla and its Competitors
The following table provides a comparative analysis of Tesla and its competitors in the automotive sector:
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Tesla Inc | 390.56 | 19.27 | 15.69 | 1.04% | $2.91 | $5.01 | -3.14% |
| General Motors Co | 25.77 | 1.25 | 0.44 | -5.22% | $0.42 | -$1.12 | -5.06% |
| Ferrari NV | 31.65 | 13.32 | 7.17 | 10.42% | $0.67 | $0.88 | 7.4% |
| Ford Motor Co | 11.80 | 1.16 | 0.29 | 5.29% | $3.67 | $4.3 | 9.39% |
| Thor Industries Inc | 21.40 | 1.39 | 0.61 | 0.5% | $0.11 | $0.32 | 11.5% |
| Winnebago Industries Inc | 36 | 1.05 | 0.45 | 0.45% | $0.03 | $0.09 | 12.32% |
| Workhorse Group Inc | 0.06 | 1.34 | 0.32 | -28.77% | -$0.01 | -$0.01 | -4.97% |
| Average | 21.11 | 3.25 | 1.55 | -2.89% | $0.82 | $0.74 | 5.1% |
Key Trends and Insights
Upon analyzing Tesla, the following trends can be observed:
- The Price to Earnings ratio of 390.56 for this company is 18.5x above the industry average, indicating a premium valuation associated with the stock.
- The elevated Price to Book ratio of 19.27 relative to the industry average by 5.93x suggests the company might be overvalued based on its book value.
- The stock’s relatively high Price to Sales ratio of 15.69, surpassing the industry average by 10.12x, may indicate an aspect of overvaluation in terms of sales performance.
- The Return on Equity (ROE) of 1.04% is 3.93% above the industry average, highlighting efficient use of equity to generate profits.
- The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $2.91 Billion, which is 3.55x above the industry average, indicating stronger profitability and robust cash flow generation.
- Compared to its industry, the company has higher gross profit of $5.01 Billion, which indicates 6.77x above the industry average, indicating stronger profitability and higher earnings from its core operations.
- The company is witnessing a substantial decline in revenue growth, with a rate of -3.14% compared to the industry average of 5.1%, which indicates a challenging sales environment.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its equity. When comparing Tesla with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:
- In terms of the debt-to-equity ratio, Tesla has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.
- This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.18.
Key Takeaways
For Tesla, the PE, PB, and PS ratios are all high compared to its industry peers, indicating that the stock may be overvalued based on these metrics. On the other hand, Tesla’s high ROE, EBITDA, gross profit, and low revenue growth suggest strong operational performance and profitability relative to its competitors in the Automobiles industry.