In today’s fast-paced and competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies before making investment decisions. This article will conduct a comprehensive industry comparison, evaluating Tesla against its key competitors in the Automobiles industry. By examining key financial metrics, market position, and growth prospects, we aim 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, including 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 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
The following table compares key financial metrics of Tesla with its industry peers:
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Tesla Inc | 390.70 | 19.28 | 15.70 | 1.04% | $2.91 | $5.01 | -3.14% |
| General Motors Co | 26.21 | 1.27 | 0.45 | -5.22% | $0.42 | -$1.12 | -5.06% |
| Ferrari NV | 31.21 | 13.14 | 7.07 | 10.42% | $0.67 | $0.88 | 7.4% |
| Ford Motor Co | 11.74 | 1.15 | 0.29 | 5.29% | $3.67 | $4.3 | 9.39% |
| Thor Industries Inc | 22.39 | 1.45 | 0.64 | 0.5% | $0.11 | $0.32 | 11.5% |
| Winnebago Industries Inc | 37.52 | 1.10 | 0.47 | 0.45% | $0.03 | $0.09 | 12.32% |
| Workhorse Group Inc | 0.06 | 1.33 | 0.31 | -28.77% | -$0.01 | -$0.01 | -4.97% |
| Average | 21.52 | 3.24 | 1.54 | -2.89% | $0.82 | $0.74 | 5.1% |
Trends and Observations
Upon analyzing Tesla, the following trends can be observed:
- The current Price to Earnings ratio of 390.7 is 18.16x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
- The Price to Book ratio of 19.28 exceeds the industry average by 5.95x, indicating the stock may be trading at a premium in relation to its book value.
- The relatively high Price to Sales ratio of 15.7 surpasses the industry average by 10.19x, which 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.
- 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.
- With a revenue growth of -3.14%, which is much lower than the industry average of 5.1%, the company is experiencing a notable slowdown in sales expansion.
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. When examining Tesla in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
- Tesla demonstrates a stronger financial position compared to its top 4 peers in the sector.
- With a lower debt-to-equity ratio of 0.18, the company relies less on debt financing and maintains a healthier 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 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.