Reviewing Tesla (TSLA) and WABCO (WBC)

Tesla (NASDAQ: TSLA) and WABCO (NYSE:WBC) are both auto/tires/trucks companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, institutional ownership, earnings, risk and profitability.

Risk & Volatility

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Tesla has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500. Comparatively, WABCO has a beta of 1.8, meaning that its share price is 80% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Tesla and WABCO, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tesla 11 11 10 0 1.97
WABCO 0 5 10 0 2.67

Tesla currently has a consensus target price of $304.19, indicating a potential upside of 5.16%. WABCO has a consensus target price of $163.15, indicating a potential upside of 19.31%. Given WABCO’s stronger consensus rating and higher probable upside, analysts clearly believe WABCO is more favorable than Tesla.

Profitability

This table compares Tesla and WABCO’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tesla -16.68% -33.08% -7.06%
WABCO 12.29% 37.38% 10.35%

Earnings & Valuation

This table compares Tesla and WABCO’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tesla $11.76 billion 4.16 -$1.96 billion ($11.48) -25.20
WABCO $3.30 billion 2.22 $406.10 million $6.86 19.93

WABCO has lower revenue, but higher earnings than Tesla. Tesla is trading at a lower price-to-earnings ratio than WABCO, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

58.2% of Tesla shares are held by institutional investors. Comparatively, 97.3% of WABCO shares are held by institutional investors. 23.1% of Tesla shares are held by company insiders. Comparatively, 0.8% of WABCO shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

WABCO beats Tesla on 10 of the 13 factors compared between the two stocks.

About Tesla

Tesla, Inc. designs, develops, manufactures, and sells electric vehicles, and energy generation and storage systems in the United States, China, Norway, and internationally. The company operates in two segments, Automotive, and Energy Generation and Storage. The Automotive segment offers sedans and sport utility vehicles. It also provides electric vehicle powertrain components and systems to other manufacturers; and services for electric vehicles through its company-owned service centers, Service Plus locations, and Tesla mobile technicians. This segment sells its products through a network of company-owned stores and galleries. The Energy Generation and Storage segment offers energy storage products, such as rechargeable lithium-ion battery systems for use in homes, commercial facilities, and utility grids; designs, manufactures, installs, maintains, leases, and sells solar energy systems to residential and commercial customers; and sell renewable energy to residential and commercial customers. The company was formerly known as Tesla Motors, Inc. and changed its name to Tesla, Inc. in February 2017. Tesla, Inc. was founded in 2003 and is headquartered in Palo Alto, California.

About WABCO

WABCO Holdings Inc., together with its subsidiaries, supplies electronic, mechanical, electro-mechanical, and aerodynamic products worldwide. The company engineers, develops, manufactures, and sells braking, stability, suspension, transmission automation, and air management systems primarily for commercial vehicles. The company's products include pneumatic anti-lock braking systems, electronic braking systems, electronic stability control systems, brake controls, automated manual transmission systems, and air disc brakes; and various conventional mechanical products, such as actuators, air compressors, and air control valves for medium and heavy-duty trucks, buses, and trailers. It also offers pneumatic and hydraulic braking and control systems for off-highway vehicles; conventional braking systems; electronic and conventional air suspension systems; steering technologies; and foundation brakes, vehicle electronic stability control and roll stability support products, and advanced driver assistance systems. In addition, the company supplies electronic suspension controls and vacuum pumps to the passenger car and SUV markets, as well as provides remanufacturing services. Further, it offers replacement parts, fleet management solutions, diagnostic tools, training, and other expert services for commercial vehicle aftermarket distributors and service partners, and fleet operators. The company sells its products primarily to truck and bus original equipment manufacturers (OEMs), Trailer OEMs, and car manufacturers; commercial vehicle aftermarket distributors for replacement parts and services and commercial vehicle fleet operators for management solutions and services; and manufacturers of heavy duty off-highway vehicles in agriculture, construction, mining, and other industries. WABCO Holdings Inc. was founded in 1869 and is headquartered in Brussels, Belgium.

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