In today’s rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. This article will undertake an in-depth industry comparison, assessing Tesla alongside its primary competitors in the Automobiles industry. By examining crucial financial indicators, market positioning, and growth potential, we aim to provide valuable insights to 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, including 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.
Financial Comparison
The following table compares Tesla with its competitors in the Automobiles industry:
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Tesla Inc | 380.66 | 18.78 | 15.30 | 1.04% | $2.91 | $5.01 | -3.14% |
| General Motors Co | 25.76 | 1.25 | 0.44 | -5.22% | $0.42 | -$1.12 | -5.06% |
| Ferrari NV | 31.53 | 13.27 | 7.14 | 10.42% | $0.67 | $0.88 | 7.4% |
| Ford Motor Co | 11.79 | 1.16 | 0.29 | 5.29% | $3.67 | $4.3 | 9.39% |
| Thor Industries Inc | 22.72 | 1.48 | 0.65 | 0.5% | $0.11 | $0.32 | 11.5% |
| Winnebago Industries Inc | 38.12 | 1.12 | 0.48 | 0.45% | $0.03 | $0.09 | 12.32% |
| Workhorse Group Inc | 0.06 | 1.21 | 0.28 | -28.77% | -$0.01 | -$0.01 | -4.97% |
| Average | 21.66 | 3.25 | 1.55 | -2.89% | $0.82 | $0.74 | 5.1% |
Trends and Insights
After thoroughly examining Tesla, the following trends can be inferred:
- The Price to Earnings ratio of 380.66 for this company is 17.57x above the industry average, indicating a premium valuation associated with the stock.
- It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 18.78 which exceeds the industry average by 5.78x.
- With a relatively high Price to Sales ratio of 15.3, which is 9.87x the industry average, the stock might be considered overvalued based on sales performance.
- With a Return on Equity (ROE) of 1.04% that is 3.93% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
- The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $2.91 Billion, which is 3.55x above the industry average, implying stronger profitability and robust cash flow generation.
- The gross profit of $5.01 Billion is 6.77x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
- The company’s revenue growth of -3.14% is significantly lower compared to the industry average of 5.1%. This indicates a potential fall in the company’s sales performance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company’s capital structure. 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.
- Among its top 4 peers, Tesla has a stronger financial position with a lower debt-to-equity ratio of 0.18.
- 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 its peers in the Automobiles industry, indicating overvaluation. On the other hand, Tesla’s high ROE, EBITDA, and gross profit suggest strong profitability and operational efficiency. However, the low revenue growth rate implies a potential slowdown in the company’s top-line performance compared to industry competitors.