Performance Comparison: Ford Motor And Competitors In Automobiles Industry

In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Ford Motor F in relation to its major competitors in the Automobiles industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer valuable insights for investors and shed light on company's performance within the industry.

Ford Motor Background

Ford Motor Co. manufactures automobiles under its Ford and Lincoln brands. In March 2022, the company announced that it will run its combustion engine business, Ford Blue, and its BEV business, Ford Model e, as separate businesses but still all under Ford Motor. The company has about 13% market share in the United States, about 6.5% share in Europe, and about 2.1% share in China including unconsolidated affiliates. We expect market share to increase as inventory improves coming out of the chip shortage. Sales in the U.S. made up about 67% of 2022 total company revenue. Ford has about 173,000 employees, including about 57,000 UAW employees, and is based in Dearborn, Michigan.

By closely studying Ford Motor, we can observe the following trends:

• At 7.32, the stock's Price to Earnings ratio is 0.21x less than the industry average, suggesting favorable growth potential.

• The current Price to Book ratio of 1.01, which is 0.32x the industry average, is substantially lower than the industry average, indicating potential undervaluation.

• The Price to Sales ratio is 0.26, which is 0.14x the industry average. This suggests a possible undervaluation based on sales performance.

• The company has a lower Return on Equity (ROE) of 2.73%, which is 0.51% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.

• The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.32 Billion, which is 0.01x below the industry average. This potentially indicates lower profitability or financial challenges.

• The company has lower gross profit of $3.8 Billion, which indicates 0.01x below the industry average. This potentially indicates lower revenue after accounting for production costs.

• The company's revenue growth of 11.19% is significantly below the industry average of 41.02%. This suggests a potential struggle in generating increased sales volume.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its equity.

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.

When comparing Ford Motor 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, Ford Motor has a relatively higher level of debt of 3.27 compared to its top 4 peers.

• This could be seen as a potential risk factor for the company, as a higher debt burden may increase financial vulnerability.

Key Takeaways

The valuation analysis for Ford Motor in the Automobiles industry indicates that the company has low PE, PB, and PS ratios compared to its peers. This suggests that Ford Motor may be undervalued in terms of its earnings, book value, and sales. Additionally, the company has low ROE, EBITDA, gross profit, and revenue growth, indicating potential challenges in generating profits and sustaining growth. Overall, Ford Motor's valuation analysis suggests a need for further examination and consideration of its financial performance within the industry.

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