In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating Tesla (NASDAQ:TSLA) in relation to its major competitors in the Automobiles industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate company's performance in 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, which include 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 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 and an auto insurance business.

When analyzing Tesla, the following trends become evident:

• The Price to Earnings ratio of 289.14 for this company is 16.5x above the industry average, indicating a premium valuation associated with the stock.

• The elevated Price to Book ratio of 17.44 relative to the industry average by 6.23x suggests company might be overvalued based on its book value.

• The stock's relatively high Price to Sales ratio of 15.45, surpassing the industry average by 11.12x, may indicate an aspect of overvaluation in terms of sales performance.

• The company has a higher Return on Equity (ROE) of 1.75%, which is 2.81% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

• With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.66 Billion, which is 0.02x below the industry average, the company may face lower profitability or financial challenges.

• The company has lower gross profit of $5.05 Billion, which indicates 0.02x below the industry average. This potentially indicates lower revenue after accounting for production costs.

• The company's revenue growth of 11.57% is notably higher compared to the industry average of 0.91%, showcasing exceptional sales performance and strong demand for its products or services.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to 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.

In light of the Debt-to-Equity ratio, a comparison between Tesla and its top 4 peers reveals the following information:

• Compared to its top 4 peers, Tesla has a stronger financial position indicated by its lower debt-to-equity ratio of 0.17.

• 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

The high PE, PB, and PS ratios suggest that Tesla is relatively overvalued compared to its peers in the Automobiles industry. On the other hand, the high ROE and revenue growth indicate strong profitability and potential for future growth. However, the low EBITDA and gross profit figures may raise concerns about Tesla's operational efficiency and cost management compared to industry competitors.

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