Toyota Motor (TM) AI Stock Analysis

• Market Cap: $313.42B
• Dividend Yield: 2.57%
• Average Volume (3M): 297.88K
• Price to Earnings (P/E): 12.9
• Beta (1Y): 0.89
• Revenue Growth: 7.28%
• EPS Growth: 12.41%
• Country: US
• Employees: 383,853
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Manufacturers
• EPS (TTM): 6.15
• Shares Outstanding: 1,579,498,800
• 10 Day Avg. Volume: 255,393
• 30 Day Avg. Volume: 297,885
• PEG Ratio: -4.18
• Price to Book (P/B): 0.97
• Price to Sales (P/S): 0.72
• P/FCF Ratio: -22.24
• Enterprise Value/Market Cap: 260.31
• Enterprise Value/Revenue: 1.61
• Enterprise Value/Gross Profit: 9.13
• Enterprise Value/Ebitda: 11.11
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 17.97
• Revenue Forecast (FY): $323.96B

• Rating: 78 Outperform
• Price Target: $278.00 ▲(13.83% Upside)

TM’s score is driven by strong technical momentum and attractive valuation (moderate P/E with a solid dividend), supported by a constructive earnings-call outlook (raised sales forecast and dividend increases). The main constraint is fundamental quality: elevated leverage and historically weak free-cash-flow conversion, alongside recent margin compression.

Positive Factors

Consistent revenue growth & profitable margins

Toyota demonstrates durable top-line momentum and healthy margins for an auto OEM. Multi-year revenue expansion and mid-single-digit to high-single-digit operating margins imply structural demand, scale economics, and recurring earnings power able to support reinvestment and shareholder returns over the medium term.

Leadership in electrified vehicles

Nearly half of sales are electrified, reflecting Toyota's long-standing HEV technology and commercialization strength. This structural product advantage positions Toyota to navigate tightening emissions rules and shifting consumer preferences while preserving margins versus lower-margin EV transitions.

Diversified revenue & growing value-chain income

Beyond vehicle sales, Toyota's financial services, parts, and value-chain operations generate material, recurring income. A JPY2T value-chain contribution and large global asset base smooth cyclicality, enhance cash flow optionality and provide cross-selling and residual-value advantages long term.

Negative Factors

Elevated leverage limiting flexibility

Sustained debt-to-equity near 1.0 constrains balance-sheet optionality. In a capital-intensive EV/hydrogen transition or if macro shocks hit, elevated leverage reduces capacity to absorb shocks, fund large capex without raising costs, or opportunistically invest without degrading credit metrics.

Weak free-cash-flow conversion

Despite positive operating cash flow, historically weak or negative FCF and low FCF-to-earnings conversion limit internal funding for electrification and dividend growth. Heavy reinvestment and working-capital swings reduce financial flexibility and can force reliance on external financing during capex cycles.

Recent margin compression vs prior years

Margins have softened even as revenue surged, indicating cost, tariff or mix pressures are eroding profitability. If structural cost increases or tariffs persist, Toyota's ability to restore prior margin levels could be constrained, limiting earnings leverage from future revenue growth.

Toyota Motor Business Overview & Revenue Model

Company Description

Toyota Motor Corporation designs, manufactures, assembles, and sells passenger vehicles, minivans and commercial vehicles, and related parts and accessories. It operates in Automotive, Financial Services, and All Other segments. The company offers hybrid cars under the Prius name, fuel cell vehicles under the MIRAI name; and conventional engine vehicles, including subcompact and compact cars under the Corolla and Raize names. It also provides mini-vehicles, passenger vehicles, commercial vehicles, and auto parts under the Toyota name; mid-size cars; luxury cars; sports cars under the GR Yaris, Corolla Sport, Corolla Cross, and Supra names; and recreational and sport-utility vehicles under the Highlander name. In addition, the company offers pickup trucks under the Tacoma name; minivans; and trucks and buses. Further, it provides financial services, such as retail financing and leasing, wholesale financing, insurance, and credit cards; and designs, manufactures, and sells prefabricated housing. Additionally, the company operates GAZOO.com, a web portal for automobile information. It operates in Japan, North America, Europe, Asia, Central and South America, Oceania, Africa, and the Middle East. The company was founded in 1933 and is headquartered in Toyota, Japan.

How the Company Makes Money

Toyota generates revenue primarily through the sale of vehicles, which includes both traditional internal combustion engine vehicles and increasingly popular hybrid and electric vehicles. The company also earns substantial income from its financial services division, which provides financing and leasing options to customers and dealerships. Additionally, Toyota engages in various partnerships, such as collaborations with technology firms to enhance its electric and autonomous vehicle capabilities. Revenue from parts and accessories sales, as well as from the global distribution and supply chain operations, further contribute to its earnings. The company’s commitment to research and development, particularly in sustainable technologies, positions it well for future revenue growth in an evolving automotive landscape.

Toyota Motor Financial Statement Overview

Summary

Strong profitability and multi-year revenue growth support the score, but it is held back by elevated leverage (debt-to-equity ~1.04–1.08) and weak/volatile free cash flow (often negative historically; TTM FCF is only ~7% of net income). Recent margin compression in TTM versus FY2024–FY2025 is an additional watch item.

Income Statement

Toyota’s Income Statement shows solid profitability and a strong multi-year growth trajectory. Revenue rose consistently from 2022–2025 (annual growth mostly mid-to-high teens, then +6.5% in 2025 annual), and TTM (Trailing-Twelve-Months) revenue growth is very strong (+212%). Margins are healthy for an auto manufacturer, with TTM net margin at ~7.3% and EBIT margin near ~9.8%. The key weakness is margin compression versus the last two annual periods (TTM gross/EBIT/EBITDA margins are all below FY2024–FY2025 levels), suggesting profitability has softened even as revenue surged.

Balance Sheet

The Balance Sheet is adequate but not conservative. Leverage is consistently elevated, with debt-to-equity around ~1.04–1.08 across periods (including TTM), which limits financial flexibility if the cycle turns. On the positive side, equity has grown over time and returns on equity have generally been solid (peaking around ~14% in FY2024 and ~13% in FY2025 annual), though TTM return on equity is lower (~10%), pointing to some recent efficiency slippage.

Cash Flow

Cash Flow quality is mixed. Operating cash flow is consistently positive, including TTM (Trailing-Twelve-Months) at ~5.7T, but free cash flow has been weak and often negative in the annual periods (FY2022–FY2025 annual), indicating heavy reinvestment/capex or working-capital swings. TTM free cash flow turns slightly positive (~0.04T) and shows strong growth (+71%), but it is still small versus earnings (TTM free cash flow is only ~7% of net income), which limits cash conversion strength.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	50.69T	48.04T	45.10T	37.15T	31.38T	27.21T
Gross Profit	8.93T	9.58T	9.37T	6.31T	5.97T	4.83T
EBITDA	7.34T	8.75T	9.12T	5.76T	5.84T	4.62T
Net Income	3.72T	4.77T	4.94T	2.45T	2.85T	2.25T
Balance Sheet
Total Assets	10.00T>	93.60T	90.11T	74.30T	67.69T	67.69T
Cash, Cash Equivalents and Short-Term Investments	7.92T	15.92T	14.11T	9.23T	8.62T	8.62T
Total Debt	42.16T	38.79T	36.56T	29.38T	26.50T	26.50T
Total Liabilities	62.39T	56.72T	54.87T	45.04T	40.53T	40.53T
Stockholders Equity	39.00T	35.92T	34.22T	28.34T	26.25T	26.25T
Cash Flow
Free Cash Flow	166.16B	-1.56T	-842.02B	-750.76B	-107.63B	-7.19B
Operating Cash Flow	4.64T	3.70T	4.21T	2.96T	3.72T	25.71B
Investing Cash Flow	-5.00T	-4.19T	-5.00T	-1.60T	-577.50B	-44.17B
Financing Cash Flow	-18.44B	197.24B	2.50T	-56.18B	-2.47T	25.83B

Toyota Motor Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 244.22
• 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 TM, the sentiment is Positive. The current price of 244.22 is above the 20-day moving average (MA) of 235.90, above the 50-day MA of 224.85, and above the 200-day MA of 199.14, indicating a bullish trend. The MACD of 5.68 indicates Positive momentum. The RSI at 56.19 is Neutral, neither overbought nor oversold. The STOCH value of 40.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TM.

Toyota Motor Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TM	78 Outperform	$313.42B	12.86	10.34%	2.57%	7.28%	12.41%
HMC	63 Neutral	$41.68B	12.48	4.11%	4.19%	0.32%	-25.51%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
TSLA	60 Neutral	$1.54T	382.63	4.89%	―	-2.93%	-47.22%
GM	57 Neutral	$75.63B	25.60	4.34%	0.69%	-1.29%	-49.96%
F	56 Neutral	$55.25B	-7.19	-20.26%	5.64%	3.75%	33.37%
LI	55 Neutral	$18.63B	30.67	6.53%	―	-9.99%	-54.75%