Stellantis Stock: Don’t Expect a Miracle! Is Stellantis in Serious Trouble? Let’s Talk - STLA Stock
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Stellantis is finally getting back to what I was calling a strong buy two years ago before it almost tripled, but there are a few reasons that I want to talk about in this video.
They can make something like 11-12 billion euros in okay times that were still affected by delays and supply chain issues. In this environment, they can probably break even or not lose a ton of money unlike others if they cut the CAPEX - meaning predominantly investments. Still, for a 40 billion market cap, that’s relatively speaking very cheap.
Financially, they are in a good position, with the current assets covering the current liabilities, and enough cash to pay off all the debt almost twice.
Even without the goodwill, the current market cap is below the value of the equity, which is - again - very attractive. As a note, this can deteriorate and they can burn through the cash if they get into a bad environment for like 3-4-5 years, especially if they keep investing. Still, comparing them to other car companies, this is among the healthiest and most profitable ones on the planet. They have the assets and production capacity that small EV companies don’t since they are a giant, and at the same time, they have the margins and financial health and flexibility that many larger companies don’t.
Now, I want to talk a bit about the competition aspect. This would’ve been an issue especially if the adoption of EVs didn’t slow down recently. In that case, companies like Tesla and especially some Chinese EV producers like BYD would’ve had a very big advantage over traditional car companies because they wouldn’t have enough time to adapt. There are still significant regulation changes around carbon emissions coming in the EU even next year, which Stellantis says should be okay, but the dealers aren’t that happy with.
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0:00 Stellantis in Trouble? STLA Financial Analysis
1:49 Stellantis CEO Leaving, China, Competition, Dividend Cut?
11:20 Time to Buy Stellantis (STLA) Stock?
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