Stock has been beaten down, and revenue has been in a rut the last few years but their staple lineup of cars have undergone a refresh and has renewed consumer demand. The company is also in a great financial position to weather a storm. It’s biggest risk is the chip shortages and reliant on a third party vendor for their batteries.
The F150 has been the best selling vehicle 43 years in a row. With the EV revolution, it isn’t going anywhere with the introduction of the F150 lightning. 100k reservations so far, set to release sometime next year. I encourage you to look at the product and see how it appeals to both Truck and EV fans equally.
Ford also refreshed their lineup. They’ve scrapped underperforming vehicles like the Fusion and the MKZ while introducing the new Mach-E, Bronco, Mustang and updated the rest of their SUV fleet (36% growth yoy). Ford certainly has kept up with the times and consumer preferences.
The shorts have already left after riding it all the way down to $5 a share. The consensus was the stock has over 4B outstanding shares and has really diluted it. Ford stopped its dividend when Covid hit, and stock has been in an upward rally since going 100%+ since its 52W low.
Forward P/E of 7.63. Same range as the other Auto Dinosaurs like GM, Honda etc. He who must not be named has a P/E of 105. I believe Ford at a $56B market cap, with $25B of it in cash is severely undervalued. We see other electric companies like Lucid/NIO/XPeng/Li balloon to the same market cap as ford with some not even delivering a single vehicle.
Ford has had to halt production of the Bronco because of this. But the only silver lining is that Ford isn’t alone in this. The entire Auto Industry is affected.
Ford Does not currently produce its own batteries. With the surge in demand, they need to vertically integrate this as fast as possible. Its perhaps one of the most important focus Ford needs to do so they are not reliant on third parties. A joint partnership with South Korea’s SK Innovation plans to build these with Ford by 2025.
Luckily, the other EV and automakers don’t have Trucks that can realistically oust the F150 from its pedestal. But Cybertruck has 1Million Reservations vs 100k with F150 Lightning. Granted it had first to market advantage. But curious how many of those reservations actually get filled. As for commercial vehicles goes, Amazon has backed the private company Rivian. Can they all coexist? Or will the others gobble up the market share?
Disclosure: have no business relationship with F but I have a long position in Ford. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. This is not financial advise.