Volkswagen VOW3.DE
What does Volkswagen do?
Volkswagen is a globally active automotive group headquartered in Wolfsburg. The company develops, manufactures and sells passenger cars and light commercial vehicles as well as motorcycles, complemented by spare parts, software, battery technology and mobility services. The group has a broad brand portfolio ranging from the volume segment through premium to luxury and sports cars. Trucks and buses are also part of the business.
The group earns its money mainly from selling vehicles to private and business customers and through dealer networks. The Financial Services segment contributes financing, leasing, insurance and fleet management and supports vehicle sales. Competitively, Volkswagen is among the largest automakers worldwide with a strong position in Europe and China. The group benefits from economies of scale and its platform strategy, but in electric vehicles and software it competes with established manufacturers and new entrants, particularly from China and the US.
Score profile
Rank vs. Auto Manufacturers (10 companies). 10 = top of the group, 5 = middle. Calculated from the metrics below, without AI.
Metrics compared with the industry
On profitability and quality, Volkswagen ranks in the middle in the group Auto Manufacturers (4.8/10). On growth, the company ranks below average in the group Auto Manufacturers (2.8/10). On valuation (higher = cheaper), the stock ranks above average in the group Auto Manufacturers (7.3/10). On financial strength, Volkswagen ranks in the middle in the group Auto Manufacturers (5.6/10).
| Metric | Stock | Group median | Ranking |
|---|---|---|---|
| Forward P/E | 3.5x | 6.7x | better than 81 % |
| Trailing P/E | 32.5x | 25.9x | better than 42 % |
| PEG ratio | 0.5x | 0.6x | better than 64 % |
| EV/EBITDA | 9.1x | 9.6x | better than 64 % |
| Price/sales | 0.1x | 0.3x | better than 83 % |
| Price/book | 0.2x | 1.3x | better than 95 % |
| Revenue growth | -6.3% | -0.1% | better than 5 % |
| Earnings growth | 0.0% | 0.0% | better than 50 % |
| Gross margin | 13.9% | 11.8% | better than 65 % |
| Operating margin | -7.8% | 3.1% | better than 17 % |
| Net margin | 0.5% | 0.3% | better than 55 % |
| Return on equity | 0.4% | 0.3% | better than 55 % |
| Debt/equity | 143.0% | 131.9% | better than 45 % |
| Current ratio | 1.1x | 1.2x | better than 40 % |
| Free cash flow yield | 29.3% | 0.0% | better than 83 % |
| Dividend yield | 7.7% | 6.8% | – |
| Payout ratio | 249.3% | 61.4% | – |
| Beta | 0.96 | 0.96 | – |
Valuation: what is Volkswagen worth?
Two valuation approaches – a discounted cash flow model and a valuation at the industry’s median multiples – give Volkswagen a model range of 96.74 EUR to 133.30 EUR per share.
18 analysts, average rating “Buy”, average price target 98.16 EUR (+43.3%).
The full DCF matrix, the reverse DCF (what growth the price implies) and scenarios are part of the Pro analysis.
What the business depends on
- Vehicle sales and product mix, in particular the share of high-margin models and premium brands, largely determine revenue and earnings.
- Economies of scale from shared platforms and modules lower unit costs and support profitability across many model lines.
- The financial services business provides additional, comparatively stable income and promotes sales through financing and leasing offers.
Risks
- The automotive market is cyclical and sensitive to the economy, interest rate levels and consumer purchasing power.
- The transition to electric mobility and software requires high investment and intensifies competition, including from new manufacturers.
- Regulation, trade restrictions, tariffs, legacy legal issues and supply chain disruptions may weigh on costs and sales.
What to look for with Volkswagen
The operating margin in the automotive business is particularly meaningful, as it shows how much profit remains from vehicle sales despite high fixed costs and transformation investment.