Founded in 1937, Toyota Motor Corp is one of the world’s largest automakers, with 11.0 million units sold at retail in fiscal 2025, including 10.3 million across the Toyota and Lexus brands. The company operates in the Consumer Cyclical sector and is a key player in the Vehicles & Parts industry. Toyota’s market share in Japan is about 50% excluding mini-vehicles, while its US share is around 14%. The company also holds significant stakes in other firms, including a 20% stake in Subaru and investments in Uber Technologies and Joby Aviation. Toyota’s market capitalization stands at $258.19 billion.
Financial Health Analysis
Toyota’s financial health is robust, as evidenced by its substantial revenue and profitability metrics:
- Revenue: $328.37 billion, with a 3-year growth rate of 17.1%.
- Operating Margin: 9.6%, indicating efficient cost management.
- Net Margin: 8.82%, reflecting strong profitability.
On the balance sheet front, Toyota maintains a current ratio of 1.27 and a debt-to-equity ratio of 1.07, suggesting a balanced approach to leveraging debt. However, the Altman Z-Score of 1.78 places the company in the distress zone, indicating potential financial vulnerability.
Valuation & Market Sentiment
Toyota’s valuation metrics suggest a fair market position:
- P/E Ratio: 9.12, close to its 1-year high.
- P/S Ratio: 0.79, indicating a reasonable valuation relative to sales.
- P/B Ratio: 1.06, suggesting the stock is trading near its book value.
Analyst sentiment remains cautiously optimistic, with a target price of $230.47. Technical indicators such as the RSI of 52.8 and moving averages indicate a stable trading environment. Institutional ownership is relatively low at 1.75%, with no significant insider activity reported in the past year.
Risk Assessment
While Toyota’s financial health is generally strong, several risk factors warrant attention:
- The Altman Z-Score suggests potential financial distress.
- Sector-specific risks include exposure to cyclical demand fluctuations and regulatory changes.
- The company’s beta of 0.75 indicates lower volatility compared to the market, but external factors such as adverse weather conditions pose operational risks.
Overall, Toyota’s financial metrics and market positioning suggest resilience, but investors should remain vigilant regarding potential risks and market dynamics.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
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