Volkswagen (VOW) AI Stock Analysis

• Market Cap: €47.17B
• Dividend Yield: 6.66%
• Average Volume (3M): 68.57K
• Price to Earnings (P/E): 5.1
• Beta (1Y): 1.21
• Revenue Growth: 1.62%
• EPS Growth: -38.38%
• Country: DE
• Employees: 639,608
• Sector: Industrials
• Sector Strength: 93
• Industry: Auto - Manufacturers
• EPS (TTM): 3.69
• Shares Outstanding: 295,089,800
• 10 Day Avg. Volume: 60,353
• 30 Day Avg. Volume: 68,569
• PEG Ratio: -0.40
• Price to Book (P/B): 0.28
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -6.11
• 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: €117.25
• Price Target Upside: 23.81% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 74 Outperform
• Price Target: ―

Volkswagen's stock score reflects its strong valuation with an attractive P/E ratio and high dividend yield, signaling potential undervaluation. Financial performance is stable with solid revenue growth, though profitability and free cash flow challenges persist. Technical indicators suggest mixed momentum, with some short-term strength but caution in the longer term. Overall, the stock is appealing for value and income investors, but attention to profitability and cash flow trends is warranted.

Positive Factors

Regulatory Changes

Major regulatory changes are a sigh of relief for VW, with the European Commission proposing greater flexibility in EU's 2025 CO2 regulations, likely benefiting VW due to its lower BEV mix compared to other legacy EU 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

Macroeconomic Concerns

Demand risks related to sales in the key markets of Europe and China, and the mass-market customer segment amid concerns of a macroeconomic slowdown.

Market Demand

Key risks include demand risks related to sales in the key markets of Europe and China, and headwinds in the execution of its BEV transition/strategy and rising competition.

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 makes money primarily through the sale of its vehicles, which include cars, trucks, and motorcycles under its multiple brand portfolio. A substantial portion of its revenue comes from the production and sale of passenger cars, complemented by sales of light commercial vehicles and heavy trucks. Additionally, Volkswagen generates income from its financial services division, which offers leasing, financing, and insurance services to both individual and corporate customers. The company's revenue model is bolstered by strategic partnerships and investments in electric and autonomous vehicle technologies, enhancing its product offerings and paving the way for future growth in these emerging markets.

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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
326.75B	324.65B	322.28B	279.05B	250.20B	222.88B
	Gross Profit
59.74B	59.47B	60.98B	52.18B	47.24B	38.95B
	EBIT
17.34B	19.06B	22.58B	22.11B	19.27B	9.68B
	EBITDA
50.93B	51.60B	49.84B	50.01B	46.69B	36.35B
	Net Income Common Stockholders
9.90B	11.35B	16.53B	15.46B	15.38B	8.87B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
70.77B	73.45B	74.91B	70.77B	66.88B	59.27B
	Total Assets
564.01B	632.90B	600.34B	564.01B	528.61B	497.11B
	Total Debt
178.44B	196.52B	193.97B	178.44B	183.37B	174.31B
	Net Debt
149.26B	156.22B	150.52B	149.26B	143.65B	140.40B
	Total Liabilities
385.69B	436.17B	410.43B	385.69B	382.45B	368.33B
	Stockholders Equity
165.38B	182.29B	175.69B	165.38B	144.45B	127.05B
Cash Flow		Free Cash Flow
-8.55B	-10.29B	-6.44B	5.83B	20.14B	7.16B
	Operating Cash Flow
18.36B	17.15B	19.36B	28.50B	38.63B	24.90B
	Investing Cash Flow
-31.23B	-31.57B	-19.81B	-41.82B	-26.13B	-22.69B
	Financing Cash Flow
-1.20B	11.14B	16.01B	4.22B	-7.75B	7.64B

Volkswagen Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 94.70
• 50DMA: Positive
• 100DMA: Negative
• 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 Neutral. The current price of 94.7 is below the 20-day moving average (MA) of 97.53, above the 50-day MA of 92.86, and above the 200-day MA of 91.17, indicating a neutral trend. The MACD of 0.41 indicates Positive momentum. The RSI at 46.46 is Neutral, neither overbought nor oversold. The STOCH value of 25.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DE:VOW.

Volkswagen Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VOW	74 Outperform	€47.17B	5.11	5.52%	6.66%	1.62%	-38.38%
Sector *	66 Neutral	$4.48B	12.26	5.32%	248.53%	4.10%	-12.36%
MBGAF		$56.62B	6.12	9.32%	7.83%	―	―
BAMXF		$54.33B	7.82	7.02%	5.22%	―	―
0JHU		€10.51B	2.07		5.57%	―	―
8TRA	74 Outperform	€15.01B	5.83	14.10%	5.79%	-2.53%	-4.91%
DTG	73 Outperform	€29.65B	10.26	12.77%	5.07%	-4.81%	-22.95%