Volkswagen (VOW) AI Stock Analysis

• Market Cap: €50.53B
• Dividend Yield: 6.06%
• Average Volume (3M): 55.55K
• Price to Earnings (P/E): 6.1
• Beta (1Y): 1.38
• Revenue Growth: -0.19%
• EPS Growth: -44.09%
• Country: DE
• Employees: 639,608
• Sector: Consumer Cyclical
• Sector Strength: 81
• Industry: Auto - Manufacturers
• EPS (TTM): 4.34
• Shares Outstanding: 295,089,800
• 10 Day Avg. Volume: 34,476
• 30 Day Avg. Volume: 55,553
• PEG Ratio: -0.12
• Price to Book (P/B): 0.24
• Price to Sales (P/S): 0.14
• P/FCF Ratio: -4.34
• 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: €117.33
• Price Target Upside: 15.71% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 72 Outperform
• Price Target: €104.00 ▲(2.56% Upside)

Volkswagen's strong valuation, characterized by a low P/E ratio and high dividend yield, is a significant positive factor. Financial performance is stable, with solid revenue growth but challenges in profitability and free cash flow. Technical indicators suggest potential short-term weakness, but the oversold stochastic may indicate a rebound opportunity.

Positive Factors

Market Position

VW's extensive product portfolio commands strong margins, contributing to its competitive position and significant global market share.

Regulatory Environment

Major regulatory changes are likely to benefit VW due to its lower BEV mix compared to other automakers, providing a sigh of relief for the company.

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 are a concern amid rising competition.

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 (VOW) is a leading global automotive manufacturer headquartered in Wolfsburg, Germany. The company operates in various sectors, including passenger cars, commercial vehicles, and financial services. Volkswagen is known for its diverse portfolio of brands, which includes iconic names such as Volkswagen, Audi, Porsche, Škoda, and SEAT, among others. The company focuses on producing a wide range of vehicles, from economical compact cars to luxury performance vehicles, and is increasingly investing in electric mobility and sustainable transportation solutions.

How the Company Makes Money

Volkswagen generates revenue primarily through the sale of vehicles, which constitutes the bulk of its income. The company sells a wide array of passenger cars and commercial vehicles across various markets globally. Additionally, Volkswagen has a significant revenue stream from financial services, which includes vehicle financing, leasing, and insurance products offered to customers and dealers. The company also benefits from partnerships with technology firms for the development of electric vehicles and autonomous driving technologies. Moreover, Volkswagen's investment in electric mobility, including the launch of its ID series of electric vehicles, positions it to capture a growing market segment, further enhancing its revenue potential.

Volkswagen Financial Statement Overview

Summary

Volkswagen demonstrates solid revenue growth and stable gross profit margins, indicating efficient operations. However, profitability metrics like net profit and EBIT margins have faced pressure. The balance sheet shows disciplined leverage but relies heavily on liabilities. Strong operating cash flow is offset by negative free cash flow due to significant capital investments, posing potential risks.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	324.22B	324.66B	322.28B	279.05B	250.20B	222.88B
Gross Profit	58.65B	61.03B	62.03B	52.57B	47.06B	39.13B
EBITDA	47.09B	48.22B	49.84B	50.01B	46.69B	36.35B
Net Income	8.97B	11.35B	16.53B	15.46B	15.38B	8.87B
Balance Sheet
Total Assets	637.68B	632.90B	600.34B	564.01B	528.61B	497.11B
Cash, Cash Equivalents and Short-Term Investments	62.91B	73.45B	74.91B	70.77B	66.88B	59.27B
Total Debt	188.15B	196.52B	193.97B	178.44B	183.37B	174.31B
Total Liabilities	439.67B	436.17B	410.43B	385.69B	382.45B	368.33B
Stockholders Equity	182.88B	182.29B	175.69B	165.38B	144.45B	127.05B
Cash Flow
Free Cash Flow	-11.10B	-10.29B	-6.44B	5.83B	20.14B	7.16B
Operating Cash Flow	15.98B	17.15B	19.36B	28.50B	38.63B	24.90B
Investing Cash Flow	-30.54B	-31.57B	-19.81B	-41.82B	-26.13B	-22.69B
Financing Cash Flow	74.00M	11.14B	16.01B	4.22B	-7.75B	7.64B

Volkswagen Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 101.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 101.4 is below the 20-day moving average (MA) of 102.30, above the 50-day MA of 97.92, and above the 200-day MA of 93.31, indicating a bullish trend. The MACD of 1.24 indicates Positive momentum. The RSI at 61.33 is Neutral, neither overbought nor oversold. The STOCH value of 37.41 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	72 Outperform	€50.53B	6.09	5.01%	6.06%	-0.19%	-44.09%
Sector *	61 Neutral	$17.92B	12.81	-2.97%	2.98%	1.30%	-14.28%
MBGAF	―	$60.00B	8.30	7.24%	7.89%	―	―
BAMXF	―	$61.46B	10.32	6.06%	4.87%	―	―
0JHU	―	€11.07B	2.05		3.48%	―	―
8TRA	72 Outperform	€15.12B	6.94	12.80%	5.62%	-2.98%	-14.55%
DTG	63 Neutral	€30.26B	12.44	11.21%	5.02%	-6.83%	-32.20%