In today’s rapidly changing and highly competitive business world, it is essential for investors and industry observers to carefully assess companies before making investment choices. This article will undertake a comprehensive industry comparison, evaluating Tesla vis-à-vis its key competitors in the Automobiles 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, 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.
Key Financial Indicators
The following table compares Tesla’s key financial indicators with those of its industry peers:
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Tesla Inc | 386.41 | 19.07 | 15.53 | 1.04% | $2.91 | $5.01 | -3.14% |
| General Motors Co | 24.67 | 1.19 | 0.42 | -5.22% | $0.42 | -$1.12 | -5.06% |
| Ferrari NV | 31.69 | 13.34 | 7.18 | 10.42% | $0.67 | $0.88 | 7.4% |
| Ford Motor Co | 11.62 | 1.14 | 0.29 | 5.29% | $3.67 | $4.3 | 9.39% |
| Thor Industries Inc | 22.77 | 1.48 | 0.65 | 0.5% | $0.11 | $0.32 | 11.5% |
| Winnebago Industries Inc | 37.45 | 1.10 | 0.47 | 0.45% | $0.03 | $0.09 | 12.32% |
| Workhorse Group Inc | 0.05 | 1.18 | 0.28 | -28.77% | -$0.01 | -$0.01 | -4.97% |
| Average | 21.38 | 3.24 | 1.55 | -2.89% | $0.82 | $0.74 | 5.1% |
Analysis of Trends
Upon analyzing Tesla, the following trends can be observed:
- The current Price to Earnings ratio of 386.41 is 18.07x higher than the industry average, indicating the stock is priced at a premium level according to market sentiment.
- Tesla could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 19.07, which exceeds the industry average by 5.89x.
- With a relatively high Price to Sales ratio of 15.53, which is 10.02x the industry average, the stock might be considered overvalued based on 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 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 below the industry average of 5.1%, suggesting a potential struggle in generating increased sales volume.
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. Evaluating Tesla against its top 4 peers in terms of the Debt-to-Equity ratio reveals:
- Compared to its top 4 peers, Tesla has a stronger financial position indicated by its lower debt-to-equity ratio of 0.18.
- This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute 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.