Overall TSLA gets a fundamental rating of 6 out of 10. We evaluated TSLA against 37 industry peers in the Automobiles industry. While TSLA has a great profitability rating, there are some minor concerns on its financial health. TSLA has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
TSLA had positive earnings in the past year.
In the past year TSLA had a positive cash flow from operations.
In the past 5 years TSLA has always been profitable.
In the past 5 years TSLA always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of TSLA (4.72%) is better than 94.59% of its industry peers.
TSLA has a better Return On Equity (7.84%) than 89.19% of its industry peers.
Looking at the Return On Invested Capital, with a value of 4.66%, TSLA belongs to the top of the industry, outperforming 89.19% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for TSLA is significantly above the industry average of 5.63%.
The 3 year average ROIC (11.83%) for TSLA is well above the current ROIC(4.66%). The reason for the recent decline needs to be investigated.
Industry Rank
Sector Rank
ROA
4.72%
ROE
7.84%
ROIC
4.66%
ROA(3y)11.73%
ROA(5y)9.08%
ROE(3y)20.62%
ROE(5y)16.66%
ROIC(3y)11.83%
ROIC(5y)10.37%
1.3 Margins
Looking at the Profit Margin, with a value of 6.54%, TSLA belongs to the top of the industry, outperforming 94.59% of the companies in the same industry.
TSLA's Profit Margin has declined in the last couple of years.
The Operating Margin of TSLA (6.23%) is better than 94.59% of its industry peers.
In the last couple of years the Operating Margin of TSLA has grown nicely.
TSLA has a better Gross Margin (17.48%) than 67.57% of its industry peers.
TSLA's Gross Margin has improved in the last couple of years.
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), TSLA is creating some value.
Compared to 1 year ago, TSLA has more shares outstanding
TSLA has more shares outstanding than it did 5 years ago.
TSLA has a worse debt/assets ratio than last year.
2.2 Solvency
The Debt to FCF ratio of TSLA is 1.29, which is an excellent value as it means it would take TSLA, only 1.29 years of fcf income to pay off all of its debts.
TSLA's Debt to FCF ratio of 1.29 is amongst the best of the industry. TSLA outperforms 94.59% of its industry peers.
A Debt/Equity ratio of 0.07 indicates that TSLA is not too dependend on debt financing.
The Debt to Equity ratio of TSLA (0.07) is better than 89.19% of its industry peers.
Industry Rank
Sector Rank
Debt/Equity
0.07
Debt/FCF
1.29
Altman-Z
N/A
ROIC/WACC0.52
WACC8.96%
2.3 Liquidity
A Current Ratio of 2.04 indicates that TSLA has no problem at all paying its short term obligations.
The Current ratio of TSLA (2.04) is better than 81.08% of its industry peers.
A Quick Ratio of 1.55 indicates that TSLA should not have too much problems paying its short term obligations.
TSLA's Quick ratio of 1.55 is amongst the best of the industry. TSLA outperforms 83.78% of its industry peers.
Based on the Price/Earnings ratio of 200.98, the valuation of TSLA can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of TSLA indicates a somewhat cheap valuation: TSLA is cheaper than 75.68% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.38, TSLA is valued quite expensively.
With a Price/Forward Earnings ratio of 184.89, TSLA can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, TSLA is valued a bit cheaper than 62.16% of the companies in the same industry.
TSLA's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 22.86.
Industry Rank
Sector Rank
PE
200.98
Fwd PE
184.89
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TSLA is valued a bit cheaper than 70.27% of the companies in the same industry.
78.38% of the companies in the same industry are more expensive than TSLA, based on the Price/Free Cash Flow ratio.
Industry Rank
Sector Rank
P/FCF
246.02
EV/EBITDA
116.91
4.3 Compensation for Growth
The excellent profitability rating of TSLA may justify a higher PE ratio.
Taking everything into account, WBD scores 3 out of 10 in our fundamental rating. WBD was compared to 80 industry peers in the Entertainment industry. WBD has a medium profitability rating, but doesn't score so well on its financial health evaluation. WBD has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year WBD was profitable.
WBD had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: WBD reported negative net income in multiple years.
Each year in the past 5 years WBD had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 0.75%, WBD is in line with its industry, outperforming 60.00% of the companies in the same industry.
With a decent Return On Equity value of 2.13%, WBD is doing good in the industry, outperforming 65.00% of the companies in the same industry.
WBD has a Return On Invested Capital (1.25%) which is comparable to the rest of the industry.
Industry Rank
Sector Rank
ROA
0.75%
ROE
2.13%
ROIC
1.25%
ROA(3y)-6.3%
ROA(5y)-2.79%
ROE(3y)-18.63%
ROE(5y)-8.08%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
WBD's Profit Margin of 2.00% is fine compared to the rest of the industry. WBD outperforms 63.75% of its industry peers.
WBD's Operating Margin of 3.65% is fine compared to the rest of the industry. WBD outperforms 63.75% of its industry peers.
In the last couple of years the Operating Margin of WBD has declined.
Looking at the Gross Margin, with a value of 44.43%, WBD is in line with its industry, outperforming 52.50% of the companies in the same industry.
WBD's Gross Margin has declined in the last couple of years.
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so WBD is destroying value.
The number of shares outstanding for WBD has been increased compared to 1 year ago.
Compared to 5 years ago, WBD has more shares outstanding
The debt/assets ratio for WBD is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.71, we must say that WBD is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of WBD (0.71) is comparable to the rest of the industry.
WBD has a debt to FCF ratio of 8.52. This is a slightly negative value and a sign of low solvency as WBD would need 8.52 years to pay back of all of its debts.
WBD has a Debt to FCF ratio (8.52) which is in line with its industry peers.
WBD has a Debt/Equity ratio of 0.95. This is a neutral value indicating WBD is somewhat dependend on debt financing.
WBD's Debt to Equity ratio of 0.95 is on the low side compared to the rest of the industry. WBD is outperformed by 66.25% of its industry peers.
Industry Rank
Sector Rank
Debt/Equity
0.95
Debt/FCF
8.52
Altman-Z
0.71
ROIC/WACC0.17
WACC7.41%
2.3 Liquidity
WBD has a Current Ratio of 1.04. This is a normal value and indicates that WBD is financially healthy and should not expect problems in meeting its short term obligations.
WBD has a Current ratio (1.04) which is comparable to the rest of the industry.
WBD has a Quick Ratio of 1.04. This is a normal value and indicates that WBD is financially healthy and should not expect problems in meeting its short term obligations.
WBD has a Quick ratio of 1.04. This is comparable to the rest of the industry: WBD outperforms 51.25% of its industry peers.
A Price/Earnings ratio of 64.43 indicates a quite expensive valuation of WBD.
Compared to the rest of the industry, the Price/Earnings ratio of WBD indicates a somewhat cheap valuation: WBD is cheaper than 71.25% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.38. WBD is valued rather expensively when compared to this.
WBD is expected to report negative earnings next year, which makes the Forward Price/Earnings Ratio negative.
Industry Rank
Sector Rank
PE
64.43
Fwd PE
N/A
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WBD indicates a rather cheap valuation: WBD is cheaper than 93.75% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, WBD is valued cheaply inside the industry as 91.25% of the companies are valued more expensively.
Industry Rank
Sector Rank
P/FCF
11.77
EV/EBITDA
3.8
4.3 Compensation for Growth
WBD's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as WBD's earnings are expected to grow with 22.88% in the coming years.