This article originally appeared on Simply Wall St News
Today we will analyze the Ford Motor Company (NYSE: F). Company actions has experienced a significant share price increase of over 20% over the past two years. With many analysts covering large cap stocks, we can expect all price sensitive announcements to have factored into the share price already, but a look at the fundamentals will give investors a better grasp of the market. future potential of the action.
Ford operates in three main segments, automobiles – their traditional source of income, mobility – the new segment focused on electric vehicles and arguably the one investors are most excited about, and their credit department – which mainly deals with financing and leasing activities.
Check out our latest review for Ford Motor
In the latest earnings report, Ford posted mixed results:
In North America, third quarter 2021 wholesale sales were down 16% from a year ago, mainly reflecting the impact of production constraints related to semiconductors. The company has lost 2.4% market share for the year to date, dropping from 13.7% to 11.3% market share.
In South America, Ford has lost 3.5% market share, but has maintained year-to-date revenue at roughly the same $ 1.6 billion level, implying that competitors are posting stronger growth.
In Europe, the company has remained relatively stable, losing just 0.8% market share since the start of the year, but managed to increase revenue from $ 15.5 billion to $ 18.7 billion. dollars.
Finally, in China – the company maintained its market share, but revenues declined from US $ 2.4 billion to US $ 1.96 billion, implying that last quarter auto sales were generally down, but the company managed to maintain its relative position.
The consolidated result over the last twelve months, as well as analysts’ estimates, give a more complete picture of the company:
Future prospects are an important aspect when considering buying a stock, especially if you are an investor looking to grow your portfolio.
It looks like 2020 and 2021 have been bad for Ford, and the company will struggle to return to pre-2020 revenue levels in the future.
When it comes to profitability, we see a different picture. Even though statutory profits are low, free cash flow is higher, and that’s arguably a better measure. These two differences can be expected to converge in the future, and they tend to do so on free cash flow, which would show that Ford is actually more profitable than it looks right now.
Ford’s most exciting segment is the mobility segment, where the company still shows a loss, mainly because it is currently in the investment and development phase of the EV and autonomous intelligent driving of Argo AI. .
Ford is spending over US $ 30 billion cumulative investment by 2025, which aims to make Ford the main competitor in the electric vehicle market. Investors may need to wait awhile before investments result in higher cash flow, but on the other hand, investing before growth is built into price can be a viable strategy.
Key points to remember
Ford is in the process of transforming electric vehicles and is committed to investing heavily in its operations in order to become a main competitor in the electric vehicle and mobility market.
Ford’s value comes from the prospects for future growth and the successful completion of their EV project.
The company’s fundamentals are stable, but significant growth is not expected over the next few years, and investors will need to watch how the electric vehicle race unfolds among large and small competitors in the future.
Ford has the brand, production capacity and financial leverage to engage in large capital-intensive projects, and could therefore be a viable investment for the electric vehicle and automotive industry.
In light of this, if you want to do more analysis on the business, it is essential to be aware of the risks involved. Our analysis shows 3 warning signs for Ford Motor (1 cannot be ignored!) And we strongly recommend that you review them before investing.
If you’re no longer interested in Ford Motor, you can use our free platform to view our list of over 50 other stocks with high growth potential.
Simply Wall St analyst Goran Damchevski and Simply Wall St have no positions in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents.
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