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Continental AG (CTTAY)
OTHER OTC:CTTAY
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Continental AG
(OTC:CTTAY)
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Rating:67Neutral
Price Target:
$8.50
▲(14.25% Upside)
Continental AG's stock score is primarily driven by its recovering financial performance and positive technical indicators. The earnings call provided mixed insights, with strategic successes offset by challenges in certain sectors. The high P/E ratio suggests overvaluation, which tempers the overall score.
Positive Factors
AUMOVIO Spin-Off Success
The AUMOVIO spin-off enhances Continental AG's focus on core operations, potentially leading to improved efficiency and strategic growth opportunities.
Strong Tire Business Performance
Continued growth in the tire segment underscores Continental's strong market position and ability to capitalize on demand in key regions, supporting revenue stability.
Improvement in ContiTech Earnings
Enhanced EBIT margins in ContiTech indicate operational efficiency and profitability improvements, strengthening the company's financial foundation.
Negative Factors
Negative Impact from Strategic Moves
Significant noncash impacts from strategic decisions could affect financial flexibility and necessitate adjustments in financial planning.
Challenges in Truck Tire Market
Ongoing challenges in the truck tire market could hinder revenue growth and require strategic adjustments to address demand fluctuations.
High Special Effects Impact
Increased special effects reflect transformation costs that may strain financial resources and impact profitability in the near term.
Continental AG (CTTAY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$16.15B
Dividend Yield0.42%
Average Volume (3M)1.37K
Price to Earnings (P/E)73.2
Beta (1Y)0.60
Revenue Growth-37.32%
EPS Growth-79.78%
CountryUS
Employees96,426
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)-0.44
Shares Outstanding2,000,059,800
10 Day Avg. Volume0
30 Day Avg. Volume1,371
Financial Highlights & Ratios
PEG Ratio10.53
Price to Book (P/B)0.89
Price to Sales (P/S)0.32
P/FCF Ratio13.03
Enterprise Value/Market Cap0.61
Enterprise Value/Revenue0.40
Enterprise Value/Gross Profit1.61
Enterprise Value/Ebitda3.55
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Continental AG Business Overview & Revenue Model
Company DescriptionContinental Aktiengesellschaft, a technology company, offers intelligent solutions for vehicles, machines, traffic, and transportation worldwide. It operates through four sectors: Automotive, Tires, ContiTech, and Contract Manufacturing. The company offers safety, brake, chassis, motion, and motion control systems; solutions for assisted and automated driving; and audio and camera solutions for the vehicle interior, as well as intelligent information and communication technology solutions. It also provides tires for cars, trucks, buses, two-wheel and specialist vehicles, bicycles, and motor vehicles, as well as digital tire monitoring and management systems. In addition, the company develops and manufactures cross-material, environmentally friendly, and intelligent products and systems for automotive, railway engineering, mining, agriculture, and other industries, as well as provides contract manufacturing services. It sells its products through 944 company owned tire outlets and approximately 5,200 franchise locations The company was formerly known as Continental-Caoutchouc- und Gutta-Percha Compagnie. Continental Aktiengesellschaft was founded in 1871 and is headquartered in Hanover, Germany.
How the Company Makes MoneyContinental AG generates revenue through a diverse range of products and services across its various business units. The main revenue streams include the manufacture and sale of tires, which contribute significantly to its earnings, especially in the passenger car and commercial vehicle segments. Additionally, the company earns income from its automotive technology divisions, which provide electronic and software solutions for vehicle safety, connectivity, and automation. Strategic partnerships with major automotive manufacturers bolster its revenue, as Continental supplies essential components for both original equipment and aftermarket sales. The company's focus on research and development also enables it to innovate and capture emerging market trends, further enhancing its financial performance.
Continental AG Earnings Call Summary
Earnings Call Date:Nov 06, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 05, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted successful strategic moves with the AUMOVIO spin-off and strong performance in the tire business, contributing to improved cash flow and a reduced leverage ratio. However, significant negative impacts from strategic moves and challenges in the truck tire and automotive sectors were noted, along with increased special effects expectations.Q3-2025 Updates
Positive Updates
AUMOVIO Spin-Off Success
Successfully spun off AUMOVIO with an increase in market cap by EUR 2.4 billion (15% in 7 weeks), outperforming underlying indices.
Strong Tire Business Performance
Tire business showed organic growth of 3.7%, driven by the replacement tire business in North America and APAC, with a strong price/mix contribution.
Improvement in ContiTech Earnings
ContiTech earnings significantly improved, with EBIT margin increasing from 6.1% to 8.5%, despite a slight sales decline.
Operational Cash Flow Improvement
Adjusted free cash flow increased from EUR 157 million to EUR 169 million, a EUR 12 million improvement.
Leverage Ratio on Target
Pro forma leverage ratio reduced to 2.2%, aligning with the target of around 2x.
Negative Updates
Negative Impact from Strategic Moves
Strategic moves resulted in a negative impact of EUR 1.1 billion on Near base due to noncash one-off effects.
Challenges in Truck Tire Market
Weak PLT OE and truck tire replacement demand negatively impacted volumes, with muted demand in EMEA and North America.
High Special Effects Impact
Special effects expectation increased from EUR 350 million to EUR 1.5 billion due to transformation-related noncash one-offs.
Weak Automotive and Industry Sectors
Continuing weak volumes in automotive and industry sectors, with only slight signs of improvement.
Company Guidance
During the call discussing Q3 2025 results, Continental's leadership highlighted several key metrics and strategic decisions impacting the company's performance. The company's spin-off of AUMOVIO on September 18th significantly increased market capitalization, reaching approximately EUR 2.4 billion, a 15% rise over seven weeks. The sale of the Original Equipment Solutions (OESL) business within ContiTech, expected to close in Q1 2026, was another strategic move aimed at focusing on industrial business, now constituting 80% of ContiTech's operations. The company reported an organic growth of 2.6%, with the Tires segment achieving a 3.7% growth, despite a slight organic decline of 0.6% in ContiTech. Special effects incurred a negative EUR 1.1 billion impact, primarily non-cash, allowing for dividend adjustment. The leverage ratio was adjusted to 2.2% on a pro forma basis, reflecting a EUR 680 million deconsolidation effect. Adjusted free cash flow showed a EUR 12 million improvement year-over-year. The company maintained its guidance for sales, EBIT, and cash flow, and noted its intention to keep the dividend policy resilient to non-cash one-offs.Continental AG Financial Statement Overview
Summary
Continental AG's financial health reflects a recovering trajectory post-pandemic, with stable profitability and a balanced capital structure. While the income statement shows resilience, the company faces challenges in maintaining consistent revenue growth and maximizing free cash flow. The balance sheet remains strong, supporting future growth opportunities.Income Statement
Continental AG has shown resilience in its income statement with a stable gross profit margin and a recovering net income. However, the revenue growth rate has been volatile, with recent years showing fluctuations. The EBIT margin has improved but remains low. Overall profitability is recovering, but there is room for improvement.Balance Sheet
The balance sheet of Continental AG indicates a solid equity base with a moderate debt-to-equity ratio. The return on equity (ROE) has shown improvement, reflecting better utilization of shareholder funds. The equity ratio suggests a balanced approach to financing, though there is potential to optimize the capital structure further.Cash Flow
Cash flow analysis reveals positive trends in operating cash flow, although free cash flow growth has been erratic. The operating cash flow to net income ratio indicates efficient cash generation relative to net income. However, the free cash flow to net income ratio suggests challenges in translating income into free cash flow consistently.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 24.81B | 39.72B | 41.42B | 39.41B | 33.77B | 37.72B |
| Gross Profit | 6.18B | 8.80B | 8.81B | 8.31B | 7.74B | 8.59B |
| EBITDA | 2.79B | 4.55B | 4.21B | 4.01B | 4.11B | 2.46B |
| Net Income | 248.00M | 1.17B | 1.16B | 112.20M | 1.44B | -918.80M |
Balance Sheet | ||||||
| Total Assets | 18.59B | 36.97B | 37.75B | 37.93B | 35.84B | 39.64B |
| Cash, Cash Equivalents and Short-Term Investments | 1.44B | 2.72B | 2.92B | 2.44B | 2.00B | 2.64B |
| Total Debt | 0.00 | 6.88B | 7.16B | 7.67B | 6.24B | 7.32B |
| Total Liabilities | 14.47B | 22.17B | 23.63B | 24.19B | 23.20B | 27.00B |
| Stockholders Equity | 3.91B | 14.35B | 13.68B | 13.26B | 12.19B | 12.26B |
Cash Flow | ||||||
| Free Cash Flow | 1.73B | 980.00M | 1.18B | 126.30M | 1.08B | 587.90M |
| Operating Cash Flow | 3.18B | 2.93B | 3.33B | 2.30B | 2.95B | 2.71B |
| Investing Cash Flow | -1.72B | -1.82B | -2.17B | -2.20B | -1.58B | -1.84B |
| Financing Cash Flow | -224.00M | -1.07B | -1.13B | 653.50M | -1.16B | -1.14B |
Continental AG Technical Analysis
Positive
7.44
Price Trends
7.65
Positive
7.25
Positive
6.87
Positive
Market Momentum
0.12
Negative
65.92
Neutral
74.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CTTAY, the sentiment is Positive. The current price of 7.44 is below the 20-day moving average (MA) of 7.86, below the 50-day MA of 7.65, and above the 200-day MA of 6.87, indicating a bullish trend. The MACD of 0.12 indicates Negative momentum. The RSI at 65.92 is Neutral, neither overbought nor oversold. The STOCH value of 74.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CTTAY.
Continental AG Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $9.42B | 12.92 | 31.09% | 2.60% | 0.84% | 26.17% | |
75 Outperform | $6.54B | 15.23 | 8.96% | 2.63% | -1.90% | -13.86% | |
73 Outperform | $2.78B | 9.15 | 23.16% | 0.57% | -4.03% | -39.51% | |
70 Outperform | $18.68B | 68.64 | 3.25% | ― | 2.16% | -85.91% | |
67 Neutral | $16.15B | 73.20 | -1.10% | 0.42% | -37.32% | -79.78% | |
65 Neutral | $10.22B | 76.38 | 2.24% | 1.24% | 0.08% | -83.69% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
CTTAY
Continental AG
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60.07%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.