I am assigning Ford Motor Company (NYSE:F) a positive risk/reward rating based on its discounted valuation, long-term technical support, leading market position in trucks, its competitive positioning in SUVs, and its vision for autonomous vehicles.
Risk/Reward Rating: Positive
To set the stage for the Ford investment case, I will begin by contrasting Ford’s approach to autonomous vehicles with that of Tesla’s (NASDAQ:TSLA). Please keep in mind that Tesla is currently valued at over 14x Ford ($1 trillion versus $72 billion). This comparison is important as many prominent analysts assign incredible upside potential to Tesla based on autonomous ride-hail (otherwise known as robotaxis) revenue.
For example, Ark Invest released a Tesla valuation model in March of 2021 which projected up to $327 billion of revenue for Tesla in 2025 from robotaxis alone, under a bullish scenario. The valuation potential for this level of high-margin revenue would be enormous. Ark’s bullish valuation scenario for Tesla is $4 trillion by 2025, with robotaxis accounting for 47% of Tesla’s total revenue.
As a result, the Tesla robotaxi business alone would be valued in the $2 trillion range under Ark’s bullish scenario. For comparison, Ford produced $136 billion of total revenue in 2021 and is currently valued at $72 billion. Tesla produced $54 billion of revenue in 2021 and is valued at just over $1 trillion.
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