Volkswagen (VOW3) AI Stock Analysis

• Market Cap: €45.50B
• Dividend Yield: 6.12%
• Average Volume (3M): 944.21K
• Price to Earnings (P/E): 4.9
• Beta (1Y): 1.12
• 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: 206,205,440
• 10 Day Avg. Volume: 914,382
• 30 Day Avg. Volume: 944,209
• PEG Ratio: 0.64
• Price to Book (P/B): 0.73
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -62.30
• 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: €113.38
• Price Target Upside: 27.02% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 70 Outperform
• Price Target: €98.00 ▲(9.79%Upside)

Volkswagen's stock score reflects a strong valuation with an attractive dividend yield and low P/E ratio, indicating potential undervaluation. However, technical indicators show bearish momentum, suggesting caution in the short term. Financial performance is solid, but high debt levels and negative free cash flow need monitoring.

Positive Factors

Financial Performance

Q3 EBIT was €2.86bn, in line with consensus, ahead of forecast of €2.5bn.

Free Cash Flow

FCF was €3.4bn, ahead of consensus of €1.7bn.

Profitability

Audi's underlying EBIT margin was just above 8%, likely making Audi the most profitable premium brand in Q3.

Negative Factors

Cost-Cutting Measures

VW wants to close 'at least' three factories in Germany and downsize the remaining plants.

Job Cuts

Tens of thousands of jobs are at risk due to potential plant closures and cost-cutting measures.

Strategic Uncertainty

The Executive Board still has not yet presented a coherent overall concept for how it wants to strategically lead Volkswagen into the future.

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, KODA, 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 automobiles and commercial vehicles across its extensive brand portfolio. The company generates significant revenue from the manufacturing and sale of passenger cars and light commercial vehicles, with a large portion of sales coming from its core brands like Volkswagen, Audi, and Porsche. Additionally, Volkswagen earns money from its financial services division, which provides leasing, financing, and insurance solutions to individual and business customers. The company also benefits from strategic partnerships and joint ventures, particularly in emerging markets, which help expand its market reach and production capabilities. Furthermore, Volkswagen invests in research and development to innovate in areas such as electric and autonomous vehicles, which are anticipated to be future revenue drivers.

Volkswagen Financial Statement Overview

Summary

Volkswagen demonstrates strong revenue growth and operational efficiency, with solid profitability margins. The balance sheet is stable, though high debt levels require continuous monitoring. Cash flow management is crucial, with a focus on converting operational success into positive Free Cash Flow. Overall, the company is on a positive trajectory but needs to manage capital expenditures effectively.

Income Statement

Volkswagen has shown consistent revenue growth over the years, with a notable increase from 2022 to 2023. The Gross Profit Margin is strong, hovering around 18-19%, indicating efficient cost management. However, the Net Profit Margin has slightly decreased due to rising costs, but it remains healthy. EBIT and EBITDA margins are robust, reflecting solid operational efficiency.

Balance Sheet

The company's Debt-to-Equity Ratio is maintained at a manageable level, although the total debt is relatively high. Return on Equity is moderate, indicating decent profitability for shareholders. The Equity Ratio suggests a stable financial structure, but there is room for improvement in reducing liabilities.

Cash Flow

Operating Cash Flow is positive, yet Free Cash Flow has been negative in the recent year due to significant capital expenditures. The Operating Cash Flow to Net Income Ratio is strong, indicating good cash generation relative to earnings. However, the negative Free Cash Flow highlights the need for careful management of capital investments.

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: Neutral
• Last Price: 89.26
• 50DMA: Negative
• 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:VOW3, the sentiment is Neutral. The current price of 89.26 is below the 20-day moving average (MA) of 90.92, below the 50-day MA of 91.72, and above the 200-day MA of 88.10, indicating a neutral trend. The MACD of -1.40 indicates Positive momentum. The RSI at 44.51 is Neutral, neither overbought nor oversold. The STOCH value of 51.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DE:VOW3.

Volkswagen Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	71 Outperform	¥249.54B	12.85	8.49%	3.15%	6.30%	12.86%
VOW3	70 Outperform	€45.50B	4.87	5.52%	6.12%	1.62%	-38.38%
MBGAF		$54.98B	6.02	9.32%	8.54%	―	―
BAMXF		$51.14B	7.56	7.02%	5.64%	―	―
0JHU		€10.26B	2.01		4.92%	―	―
DTG	75 Outperform	€30.17B	10.66	12.77%	4.28%	-4.81%	-22.95%
8TRA	74 Outperform	€13.77B	5.50	14.10%	5.33%	-2.53%	-4.91%