In today’s fast-paced and highly competitive business world, it is important to conduct thorough business analysis for investors and industry observers. In this article, we will do a comprehensive industry comparison and evaluation Tesla TSLA in relation to its biggest competitors in the automotive industry. Through a detailed review of key financial metrics, market position and growth prospects, our goal is to provide valuable insights and highlight the company’s performance in the industry.

Tesla background

Tesla is a vertically integrated automaker of battery-powered vehicles and developer of software for autonomous driving. The company has several vehicles in its fleet, which include luxury and mid-size sedans, crossover SUVs, a light truck and a semi-truck. Tesla also plans to start selling more affordable vehicles, a sports car and a robot taxi. Global deliveries in 2023 were just over 1.8 million vehicles. The company sells batteries for stationary storage for residential and commercial properties including power plants and solar panels and rooftops for energy generation. Tesla also owns a fast charging network.

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

• The ratio between price and profit on 73.75 for this company is 2.65x above the industry average, indicating a premium valuation associated with the stock.

• It may trade at a premium to its book value, as indicated by its price/book ratio of 12.36 p.m which exceeds the industry average by 9.22x.

• The price in relation to the sale of 9.67which is 15.35x the industry average, suggests that the stock may potentially be overvalued relative to its sales performance compared to its peers.

• The return on equity (ROE) of 3.18% is 0.73% above the industry average, highlighting the efficient use of equity capital to generate profits.

• The company has lower earnings before interest, taxes, depreciation and amortization (EBITDA) of 4.22 billion dollarswhich is 0.01x below the industry average. This indicates potentially lower profitability or financial challenges.

• The gross profit on 5.0 billion dollars is 0.01x lower than its industry, indicating potential lower earnings after accounting for production costs.

• The company is experiencing remarkable revenue growth, at a rate of 7.85%better than the industry average of 6.08%.

Debt to equity

The debt-to-equity ratio (D/E) is a key indicator of a company’s financial health and its reliance on debt financing.

Considering the leverage ratio in industry comparisons allows for a concise assessment of a company’s financial health and risk profile, facilitating informed decision-making.

When assessing Tesla against its top 4 peers using the debt ratio, the following comparisons can be made:

• Tesla exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower gearing ratio of 0.18.

• This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for investors.

Key takeaways

For Tesla, the PE, PB, and PS ratios are all high compared to industry peers, indicating overvaluation. However, Tesla’s high ROE indicates strong profitability relative to its competitors. The low EBITDA and gross profit numbers may raise concerns about operational efficiency. On the other hand, the high revenue growth reflects a positive outlook for future results in the automotive industry.

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