Last week, the Nissan Motor Co., Ltd. (NSANY) dealership in North Carolina found itself mired in controversy as more than 400 charges were filed against twelve of its current and former employees. North Carolina’s Department of Transportation (DOT) filed the charges against the Nissan of Shelby dealership employees.
The charges include failing to disclose damage, improperly rebuilding salvage titles, failure to inspect vehicles prior to being offered for sale, failure to deliver title, improper use of temporary markers, making false statements about the date of sale, and more.
The agency stumbled upon these misdeeds while looking into the process used by the dealership to rebuild the titles of salvage vehicles. The dealership’s former general manager Sam Kazran was caught with 110 counts of Failure to Inspect Vehicle Prior to Being Offered for Sale.
Another employee, Casey Ramsey, was charged with 38 counts of Failure to Deliver Title, 38 counts of Improper Use of Temporary Markers, four counts of Failure to Disclose Damage, and one count of Making False Statement about the Date of Sale. The other ten employees were charged with a combination of the abovementioned violations.
These charges come after a WBTV investigation earlier this year revealed that Nissan of Shelby had listed totaled cars and flooded vehicles for sale and were sold to unsuspecting customers. WBTV found nearly a dozen cars the dealership either bought or sold at insurance salvage auctions, with many of them ending up for sale on their website.
NSANY’s stock has declined more than 12% over the past month.
NSANY’s association with this controversial dealership would definitely alarm buyers. In this scenario, its peers Stellantis N.V. (STLA), Honda Motor Co., Ltd. (HMC), Ford Motor Company (F), and NIO Inc. (NIO) stand to benefit.
Let’s delve into the fundamentals of these stocks to understand their near-term prospects.
Headquartered in Hoofddorp, the Netherlands, STLA designs, manufactures, distributes, and sells automobiles and light commercial vehicles, engines, transmission systems, metallurgical products, mobility services, and production systems worldwide. It offers its products under the Abarth, Alfa Romeo, Chrysler, DS, Dodge, Jeep, Fiat, Maserati, Ram, Opel, Lancia, Vauxhall, Peugeot, Comau, and Teksid brands.
On July 24, 2023, STLA and Samsung SDI announced that they had signed an MOU to establish a second battery plant in the U.S. under the existing StarPlus Energy joint venture, targeting to start production in 2027 with an annual production capacity of 34 GWh. This supports Stellantis' aim to offer 25 new electric vehicles in North America by the decade's end and move towards carbon neutrality by 2038.
On July 6, 2023, STLA and NioCorp Developments Ltd. announced the signing a Rare Earth Offtake Term Sheet. The Term Sheet envisions a definitive agreement for a 10-year offtake contract for specific amounts of neodymium-praseodymium oxide, dysprosium oxide, and terbium oxide that NioCorp aims to produce at its Elk Creek Critical Minerals Project in southeast Nebraska.
The supply agreement will support STLA’s efforts to build reliable supply chains and achieve its sustainability goals.
In terms of the trailing-12-month EBIT margin, STLA’s 12.46% is 70.1% higher than the 7.33% industry average. Likewise, its 10.40% trailing-12-month net income margin is 149% higher than the 4.18% industry average. Likewise, its 27.85% trailing-12-month Return on Common Equity is 157.4% higher than the 10.82% industry average.
In terms of forward non-GAAP P/E, STLA’s 3.18x is 78.4% lower than the 14.73x industry average. Its 0.27x forward Price/Sales is 68.3% lower than the 0.86x industry average. Likewise, its 0.61x forward Price/Book is 75.4% lower than the 2.48x industry average.
STLA’s net revenues for the six months ended June 30, 2023, increased 11.8% year-over-year to €98.37 billion ($107.02 billion). Its net profit increased 37.2% year-over-year to €10.92 billion ($11.88 billion). Its adjusted operating income rose 11% year-over-year to €14.13 billion ($15.37 billion). The company’s EPS came in at €3.45, representing an increase of 39.7% year-over-year.
Analysts expect STLA’s revenue for the fiscal period ending September 30, 2023, to increase 19.2% year-over-year to $48.94 billion. Its EPS for fiscal 2023 is expected to increase 3.2% year-over-year to $5.70.
Headquartered in Tokyo, Japan, HMC develops, manufactures, and distributes motorcycles, automobiles, power products, and other products in Japan, North America, Europe, Asia, and internationally. It operates through four segments: Motorcycle Business; Automobile Business; Financial Services Business; and Life Creation and Other Businesses.
On February 28, 2023, HMC and LG Energy Solution held the groundbreaking ceremony for their joint venture EV battery plant spread over 2 million square feet. The facility is scheduled to be completed by the end of 2024, aiming for an annual production capacity of 40 GWh. The JV company will deliver lithium-ion batteries to support HMC’s plan to build battery-electric vehicles (BEV) in North America.
In terms of the trailing-12-month EBITDA margin, HMC’s 13.12% is 21.8% higher than the 10.77% industry average. Likewise, its 4.89% trailing-12-month net income margin is 17% higher than the 4.18% industry average.
On the other hand, its 7.46% trailing-12-month Return on Common Equity is 31.1% lower than the 10.82% industry average. Its 5.38% trailing-12-month EBIT margin is 26.5% lower than the 7.33% industry average.
In terms of forward EV/Sales, HMC’s 0.62x is 46.3% lower than the 1.16x industry average. Its 0.38x forward Price/Sales is 55.9% lower than the 0.86x industry average. Likewise, its 9.97x forward EV/EBIT is 26.4% lower than the 13.55x industry average.
For the first quarter that ended June 30, 2023, HMC’s sales revenue increased 20.8% year-over-year to ¥4.62 trillion ($31.67 billion). The company’s operating profit increased 77.5% year-over-year to ¥394.45 billion ($2.70 billion). Its profit for the period increased 134.1% year-over-year to ¥382.95 billion ($2.62 billion). In addition, its EPS came in at ¥219.06, representing an increase of 151.1% year-over-year.
For the quarter ending September 30, 2023, HMC’s revenue is expected to increase 17.4% year-over-year to $34.09 billion. Its EPS for the fiscal year 2024 is expected to increase 19.2% year-over-year to $3.77.
F develops, delivers, and services a range of Ford trucks, commercial cars and vans, sport utility vehicles, and Lincoln luxury vehicles worldwide. It operates through Ford Blue, Ford Model e, and Ford Pro; Ford Next; and Ford Credit segments.
On August 17, 2023, SK On, EcoProBM, and F announced an investment of C$1.2 billion to build a cathode manufacturing facility that will provide materials that ultimately supply batteries to F’s future electric vehicles. The facility will help the automaker localize critical battery raw material processing in regions where it produces its EVs. Production is slated to begin in the first half of 2026.
F’s 2.44% trailing-12-month net income margin is 41.7% lower than the 4.18% industry average. Likewise, its 8.16% trailing-12-month EBITDA margin is 24.2% lower than the 10.77% industry average. Furthermore, the stock’s 10.34% trailing-12-month gross profit margin is 70.8% lower than the industry average of 35.41%.
On the other hand, the stock’s 4.43% trailing-12-month Capex/Sales is 37.8% higher than the industry average of 3.22%.
In terms of forward non-GAAP P/E, F’s 5.73x is 61.1% lower than the 14.73x industry average. Its 0.29x forward Price/Sales is 66.6% lower than the 0.86x industry average. Likewise, its 1.03x forward Price/Book is 58.4% lower than the 2.48x industry average.
On the other hand, in terms of forward EV/EBITDA, F’s 10.46x is 9.2% higher than the 9.58x industry average. Likewise, its 14.12x forward EV/EBIT is 4.2% higher than the 13.55x industry average.
F’s total revenues for the second quarter ended June 30, 2023, rose 11.9% year-over-year to $44.95 billion. Its adjusted EBIT increased 1.7% year-over-year to $3.79 billion. The company’s adjusted net income increased 6.5% over the prior-year quarter to $2.93 billion. Its EPS came in at $0.72, representing an increase of 5.9% year-over-year.
Street expects F’s EPS and revenue for the quarter ending September 30, 2023, to increase 50.3% and 10.3% year-over-year to $0.45 and $41.01 billion, respectively. The stock has gained 7.2% year-to-date to close the last trading session at $11.87.
Headquartered in Shanghai, China, NIO designs, develops, manufactures, and sells smart electric vehicles. It offers five and six-seater electric SUVs, as well as electric sedans. The company also provides power solutions, including Power Home, Power Swap, Power Charger and Destination Charger, Power Mobile, Power Map, and One Click for Power valet service.
On June 20, 2023, NIO announced that it entered into a share subscription agreement with CYVN Holdings L.L.C. NIO’s founder, chairman, and CEO William Bin Li said, “The strategic investments from CYVN Holdings demonstrate NIO’s unique values in the smart electric vehicle industry.”
“The investment transaction will further strengthen our balance sheet to power our continuous endeavors in accelerating business growth, driving technological innovations, and building long-term competitiveness,” he added.
NIO’s negative 37.01% trailing-12-month EBIT margin compares to the 7.33% industry average. Likewise, its negative 30.74% trailing-12-month EBITDA margin compares to the 10.77% industry average.
On the other hand, the stock’s 13.88% trailing-12-month Capex/Sales is 331.5% higher than the industry average of 3.22%.
In terms of forward EV/Sales, NIO’s 2.17x is 87.1% higher than the 1.16x industry average. Likewise, its 2.18x forward Price/Sales is 154.4% higher than the 0.86x industry average.
For the fiscal first quarter ended March 31, 2023, NIO’s total revenues increased 7.7% year-over-year to RMB10.68 billion ($1.47 billion). Its gross profit declined 88.8% year-over-year to RMB162.29 million ($22.35 million).
Its non-GAAP net loss attributable to ordinary shareholders of NIO widened 222.3% year-over-year to RMB4.14 billion ($570.08 million). Also, its non-GAAP loss per share attributable to ordinary shareholders widened 217.7% year-over-year to RMB2.51.
Analysts expect NIO’s revenue for the quarter ending September 30, 2023, to increase 35% year-over-year to $2.44 billion.
