In-Depth Analysis: Tesla Versus Competitors In Automobiles Industry

In the ever-changing and fiercely competitive business landscape, conducting thorough company analysis is crucial for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Tesla TSLA 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 company's performance within the industry.

Tesla Background

Tesla is a vertically integrated battery electric vehicle automaker and developer of autonomous driving software. The company has multiple vehicles in its fleet, which include luxury and midsize sedans, crossover SUVs, a light truck, and a semi truck. Tesla also plans to begin selling more affordable vehicles, a sports car, and a robotaxi. Global deliveries in 2024 were a little below 1.8 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.

Through a thorough examination of Tesla, we can discern the following trends:

• At 108.2, the stock's Price to Earnings ratio significantly exceeds the industry average by 6.38x, suggesting a premium valuation relative to industry peers.

• With a Price to Book ratio of 18.13, which is 14.98x the industry average, Tesla might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.

• With a relatively high Price to Sales ratio of 14.19, which is 19.99x the industry average, the stock might be considered overvalued based on sales performance.

• With a Return on Equity (ROE) of 3.18% that is 2.39% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.

• Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $4.22 Billion, which is 0.01x below the industry average, potentially indicating lower profitability or financial challenges.

• With lower gross profit of $5.0 Billion, which indicates 0.0x below the industry average, the company may experience lower revenue after accounting for production costs.

• The company's revenue growth of 7.85% is notably higher compared to the industry average of -7.11%, showcasing exceptional sales performance and strong demand for its products or services.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.

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.

By considering the Debt-to-Equity ratio, Tesla can be compared to its top 4 peers, leading to the following observations:

• In terms of the debt-to-equity ratio, Tesla is positioned in the middle among its top 4 peers.

• This suggests a relatively balanced financial structure, where the company maintains a moderate level of debt while also utilizing equity financing with a debt-to-equity ratio of 0.18.

Key Takeaways

In comparison to its peers in the Automobiles industry, Tesla's PE, PB, and PS ratios are all considered high, indicating that the stock may be overvalued. On the other hand, Tesla's high ROE and revenue growth suggest strong performance relative to its competitors. However, the low EBITDA and gross profit figures may raise concerns about the company's operational efficiency and profitability.

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