Volkswagen (VOW) AI Stock Analysis

• Market Cap: €46.47B
• Dividend Yield: 6.03%
• Average Volume (3M): 62.32K
• Price to Earnings (P/E): 5.1
• Beta (1Y): 1.22
• Revenue Growth: 1.62%
• EPS Growth: -38.38%
• Country: DE
• Employees: 639,608
• Sector: Industrials
• Sector Strength: 84
• Industry: Auto - Manufacturers
• EPS (TTM): 3.69
• Shares Outstanding: 295,089,800
• 10 Day Avg. Volume: 51,981
• 30 Day Avg. Volume: 62,322
• PEG Ratio: 20.24
• Price to Book (P/B): 0.45
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.71
• 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: €115.25
• Price Target Upside: 23.06% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

• Rating: 73 Outperform
• Price Target: €104.00 ▲(11.05%Upside)

Volkswagen's strong valuation metrics, particularly its low P/E ratio and high dividend yield, are significant strengths. Financial performance is stable but challenged by declining profitability margins and negative free cash flow. Technical indicators suggest bearish momentum, which may weigh on short-term performance.

Positive Factors

Regulatory Changes

Major regulatory changes are likely to benefit VW due to its lower BEV mix compared to other legacy EU automakers.

Valuation

VW is trading at undemanding valuations at a forward PE of 4.0x, below its peers, offering attractive risk-reward.

Negative Factors

BEV Transition Challenges

Challenges in executing its BEV transition strategy amid rising competition present key risks.

Demand Risks

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 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, but faces pressure on profitability with declining net profit and EBIT margins. The balance sheet is disciplined but heavily reliant on liabilities, and while operating cash flow is strong, negative free cash flow due to capital expenditures poses 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	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
EBITDA	50.93B	51.60B	49.84B	50.01B	46.69B	36.35B
Net Income	9.90B	11.35B	16.53B	15.46B	15.38B	8.87B
Balance Sheet
Total Assets	639.37B	632.90B	600.34B	564.01B	528.61B	497.11B
Cash, Cash Equivalents and Short-Term Investments	64.67B	73.45B	74.91B	70.77B	66.88B	59.27B
Total Debt	190.39B	196.52B	193.97B	178.44B	183.37B	174.31B
Total Liabilities	438.23B	436.17B	410.43B	385.69B	382.45B	368.33B
Stockholders Equity	185.59B	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: Positive
• Last Price: 93.65
• 50DMA: Negative
• 100DMA: Negative
• 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 93.65 is above the 20-day moving average (MA) of 91.98, below the 50-day MA of 93.87, and above the 200-day MA of 90.90, indicating a neutral trend. The MACD of -1.06 indicates Negative momentum. The RSI at 53.56 is Neutral, neither overbought nor oversold. The STOCH value of 73.62 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	73 Outperform	€46.47B	5.06	5.52%	6.03%	1.62%	-38.38%
Sector *	65 Neutral	$10.36B	15.10	5.28%	2.01%	2.70%	-26.16%
MBGAF		$55.04B	5.90	9.32%	8.54%	―	―
BAMXF		$51.20B	7.55	7.02%	5.74%	―	―
0JHU		€10.26B	1.99		4.95%	―	―
DTG	75 Outperform	€30.17B	10.48	12.77%	4.35%	-4.81%	-22.95%
8TRA	74 Outperform	€13.77B	5.47	14.10%	5.36%	-2.53%	-4.91%