In today's rapidly changing and highly competitive business world, it is vital for investors and industry enthusiasts to carefully assess companies. In this article, we will perform a comprehensive industry comparison, evaluating Tesla (NASDAQ:TSLA) against its key competitors in the Automobiles industry. By analyzing important financial metrics, market position, and growth prospects, we aim 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 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.

By carefully studying Tesla, we can deduce the following trends:

• Notably, the current Price to Earnings ratio for this stock, 302.46, is 16.64x above the industry norm, reflecting a higher valuation relative to the industry.

• With a Price to Book ratio of 18.24, which is 6.25x 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 16.16, which is 11.07x the industry average, the stock might be considered overvalued based on sales performance.

• The Return on Equity (ROE) of 1.75% is 2.81% above the industry average, highlighting efficient use of equity to generate profits.

• The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.66 Billion, which is 0.02x below the industry average. This potentially indicates lower profitability or financial challenges.

• With lower gross profit of $5.05 Billion, which indicates 0.02x below the industry average, the company may experience lower revenue after accounting for production costs.

• The company is experiencing remarkable revenue growth, with a rate of 11.57%, outperforming the industry average of 0.91%.

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.

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 examining Tesla in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:

• In terms of the debt-to-equity ratio, Tesla has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.

• This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.17.

Key Takeaways

For Tesla, the PE, PB, and PS ratios are all high compared to industry peers, indicating a potentially overvalued stock. On the other hand, Tesla's high ROE and revenue growth suggest strong performance and market potential. However, the low EBITDA and gross profit figures may raise concerns about the company's operational efficiency and profitability compared to its competitors in the Automobiles industry.

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