Volkswagen (VOW) AI Stock Analysis

• Market Cap: €48.44B
• Dividend Yield: 6.33%
• Average Volume (3M): 57.04K
• Price to Earnings (P/E): 5.3
• Beta (1Y): 1.30
• Revenue Growth: 1.62%
• EPS Growth: -38.38%
• Country: DE
• Employees: 639,608
• Sector: Industrials
• Sector Strength: 94
• Industry: Auto - Manufacturers
• EPS (TTM): N/A
• Shares Outstanding: 295,089,800
• 10 Day Avg. Volume: 63,745
• 30 Day Avg. Volume: 57,038
• PEG Ratio: -0.36
• Price to Book (P/B): 0.25
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -6.04
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €118.80
• Price Target Upside: 19.28% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 82 Outperform
• Price Target: €113.00 ▲(13.45%Upside)

Volkswagen's strong valuation metrics, including a low P/E ratio and high dividend yield, are key strengths, making it attractive for value investors. Positive technical indicators further support a bullish outlook. However, financial performance issues like declining profitability and negative free cash flow present some risks.

Positive Factors

Market Share

VW's wide variety of car brands across mass-market, sports, and luxury segments has led it to hold the largest global automotive market share at 10%.

Regulatory Environment

Major regulatory changes are a relief for VW, with the European Commission proposing greater flexibility in EU's CO2 regulations, likely benefiting VW due to its lower BEV mix compared to other automakers.

Valuation

Analyst recommends upgrading the HOLD call to BUY, with VW trading at undemanding valuations and offering attractive risk-reward relative to other EU OEMs.

Negative Factors

BEV Transition

Challenges in executing VW's BEV transition strategy amid rising competition present significant risks.

Demand Risks

Key risks include demand risks related to sales in the key markets of Europe and China, amid concerns of a macroeconomic slowdown.

Volkswagen Business Overview & Revenue Model

Company Description

Volkswagen AG manufactures and sells automobiles primarily in Europe, North America, South America, and the Asia-Pacific. The company operates in four segments: Passenger Cars and Light Commercial Vehicles, Commercial Vehicles, Power Engineering, and Financial Services. The Passenger Cars and Light Commercial Vehicles segment develops vehicles, engines, and vehicle software; and light commercial vehicles; and produces and sells passenger cars and related parts. The Commercial Vehicles segment develops, produces, and sells trucks and buses; and offers parts and related services. The Power Engineering segment offers large-bore diesel engines, turbomachinery, and propulsion components. The Financial Services segment provides dealer and customer financing, leasing, banking and insurance, fleet management, and mobility services. The company also offers motorcycles. It provides its products under the Volkswagen Passenger Cars, Audi, ŠKODA, SEAT, Bentley, Porsche, Volkswagen Commercial Vehicles, Scania, MAN, Lamborghini, Ducati, and Bugatti brands. Volkswagen AG was founded in 1937 and is based in Wolfsburg, Germany. Volkswagen AG operates as a subsidiary of Porsche Automobil Holding SE.

How the Company Makes Money

Volkswagen generates revenue primarily through the sale of its vehicles across its diverse brand portfolio. This includes a wide range of automobiles from luxury sports cars to commercial vehicles. Additionally, the company earns money through its financial services division, which provides financing, leasing, and insurance services to customers and dealers. Volkswagen's substantial investments in electric vehicles have also opened new revenue streams, as the company aims to expand its share in the growing EV market. Strategic partnerships and joint ventures, particularly those focusing on technology and innovation, also contribute to Volkswagen's earnings, enabling the company to leverage new technologies and business models.

Volkswagen Financial Statement Overview

Summary

Volkswagen shows solid revenue growth and a stable gross profit margin, highlighting efficient operations. However, profitability metrics like net profit and EBIT margins have faced pressure. The balance sheet reflects disciplined leverage but relies heavily on liabilities. Cash flow from operations remains strong, but negative free cash flow due to significant capital investments could pose risks. Overall, Volkswagen is financially stable but faces challenges in profitability and free cash flow.

Income Statement

Volkswagen has demonstrated solid revenue growth with a notable increase from €222.89 billion in 2020 to €324.66 billion in 2024. The gross profit margin has been stable around 18-19%, indicating efficient cost management. However, net profit margin decreased from 5.15% in 2023 to 3.50% in 2024, suggesting pressure on profitability. The EBIT and EBITDA margins show a slight decline, reflecting some operational challenges.

Balance Sheet

The company maintains a reasonable debt-to-equity ratio of approximately 1.08, showing disciplined leverage. Stockholders' equity has grown consistently, reflecting a robust equity position. However, the equity ratio is around 28.8%, indicating a relatively high reliance on liabilities. Return on equity has declined slightly, which may be a concern for investors.

Cash Flow

Operating cash flow remains strong, although it has decreased from €28.50 billion in 2022 to €17.15 billion in 2024. Free cash flow turned negative in recent years, indicating heavy capital expenditures. The operating cash flow to net income ratio is healthy, but the free cash flow to net income ratio is concerning due to negative free cash flow.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	324.65B	322.28B	279.05B	250.20B	222.88B
Gross Profit	59.47B	60.98B	52.18B	47.24B	38.95B
EBITDA	51.60B	49.84B	50.01B	46.69B	36.35B
Net Income	11.35B	16.53B	15.46B	15.38B	8.87B
Balance Sheet
Total Assets	632.90B	600.34B	564.01B	528.61B	497.11B
Cash, Cash Equivalents and Short-Term Investments	73.45B	74.91B	70.77B	66.88B	59.27B
Total Debt	196.52B	193.97B	178.44B	183.37B	174.31B
Total Liabilities	436.17B	410.43B	385.69B	382.45B	368.33B
Stockholders Equity	182.29B	175.69B	165.38B	144.45B	127.05B
Cash Flow
Free Cash Flow	-10.29B	-6.44B	5.83B	20.14B	7.16B
Operating Cash Flow	17.15B	19.36B	28.50B	38.63B	24.90B
Investing Cash Flow	-31.57B	-19.81B	-41.82B	-26.13B	-22.69B
Financing Cash Flow	11.14B	16.01B	4.22B	-7.75B	7.64B

Volkswagen Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 99.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:VOW, the sentiment is Positive. The current price of 99.6 is above the 20-day moving average (MA) of 94.24, above the 50-day MA of 94.18, and above the 200-day MA of 91.04, indicating a bullish trend. The MACD of 0.75 indicates Negative momentum. The RSI at 63.66 is Neutral, neither overbought nor oversold. The STOCH value of 62.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:VOW.

Volkswagen Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VOW	82 Outperform	€48.44B	5.26	5.52%	6.33%	1.62%	-38.38%
Sector *	63 Neutral	kr60.99B	12.81	1.88%	2.31%	0.19%	-4.61%
MBGAF	―	$61.16B	6.69	9.32%	0.12%	―	―
BAMXF	―	$60.57B	8.73	7.02%	0.05%	―	―
0JHU	―	€10.97B	2.05		3.51%	―	―
DTG	82 Outperform	€35.07B	12.18	12.77%	4.31%	-4.81%	-22.95%
8TRA	74 Outperform	€16.33B	6.49	14.10%	5.21%	-2.53%	-4.91%