One-glance verdict
Undervalued
$31.55 our estimate vs market $13.48
Wall Street consensus: $14.77 (-53.2% lower than our fair-value estimate)
57% below our estimate, below the bear case
Fundamentals snapshot
Mercedes-Benz Group AG
MBGYY · PNK · Consumer Cyclical · Auto Manufacturers
Current price
$13.48
52-week range
$12.22 - $18.16
Market cap
$51.62B
Balance sheet
Watch
12.24x Strong cushion
Net debt $99.42B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Returns 5.6% on equity, ahead of 80% of its peers.
- Reward Free cash flow was positive in 4/10 years.
- Risk Stock trades 23.5% above its 5-year average P/E.
- Risk Operating margin compressed from 11.9% to 6.2% over 3 years.
What this company does
Mercedes-Benz Group AG
Mercedes-Benz is a German company known for making and selling luxury cars and vans, which is how it earns most of its money. The company also provides related services like car loans and insurance, creating another way to earn revenue. Because it focuses on the premium market, it can often charge higher prices, which helps its profit margins (the percentage of each sale that the company gets to keep as profit).
How the company got here
Mercedes-Benz Group traces its roots back to 1926 with the merger of Daimler-Motoren-Gesellschaft (DMG) and Benz & Cie., the world's oldest car company. For much of its history, the company, then known as Daimler-Benz, was a symbol of German engineering and luxury automobiles. A major turning point was the 1998 merger with the American automaker Chrysler, creating DaimlerChrysler AG, a move that was ultimately unwound in 2007. More recently, in 2022, the company spun off its truck and bus division and renamed itself from Daimler AG to Mercedes-Benz Group AG to focus more intently on its premium cars and vans.
What it actually does
Mercedes-Benz is a German company that designs, builds, and sells a wide range of vehicles that people would recognize on the street. This includes luxury sedans, SUVs, sports cars, and commercial vans. They are known for their high-end brands like Mercedes-Benz, the high-performance Mercedes-AMG, and the ultra-luxurious Mercedes-Maybach. Beyond just selling vehicles, the company also provides services to help people buy and own them, such as offering loans, leases, and insurance.
Mercedes-Benz Cars
This is the largest and most well-known part of the company, responsible for making and selling passenger cars. It's where you'll find the familiar luxury sedans, SUVs, and sports cars under brands like Mercedes-Benz, Mercedes-AMG, and Mercedes-Maybach. Customers are individuals and families who are buying a personal vehicle. This segment generates the vast majority of the company's revenue (the money it makes from sales).
Mercedes-Benz Vans
This division focuses on building and selling commercial vehicles. Think of the Sprinter, Vito, and Citan vans you might see used by delivery companies, contractors, or as passenger shuttles. The customers here are typically businesses and fleet operators who need vehicles for work. While smaller than the car division, it's a significant and profitable part of the overall business.
Mercedes-Benz Mobility
This segment acts like the company's own bank to help sell more vehicles. It offers services like financing (car loans), leasing (long-term rentals), and insurance directly to customers and dealerships. It also provides fleet management services for business customers. This part of the company makes money from the interest on loans and the fees for its leasing and insurance services, supporting the sales of the car and van divisions.
What management is betting on now
The company's main focus is on leading in electric vehicles and the high-end luxury market. Management is investing heavily, around €40 billion, to develop new electric models with the goal of making more than half of its sales from battery-electric vehicles by 2030. They are also concentrating on their most expensive and profitable vehicles, like the Maybach, G-Class, and AMG models, aiming to increase sales in this top-end segment. Another key priority is digital technology, developing their own software called MB.OS to improve the customer experience with features like remote vehicle management and advanced driver assistance.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $31.55 vs current price $13.48
Wall Street consensus is the average analyst price target: $14.77 (-53.2% lower than our fair-value estimate).
Our most-likely fair value is $31.55 a share — about 134.1% above today's price of $13.48, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $99.4B. Interest coverage 12.2x.
Net debt
$99.42B
Interest coverage
12.24x
Mercedes-Benz Group AG's profit covers its interest bill about 12.2 times over. which is stronger than every peer shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Watch
Worse cushion
Baseline
Better cushion
MBGYY
BASELINE
Mercedes-Benz Group AG
Total debt $118.61B Interest coverage 12.24x This is the baseline the peer rows are being compared against.
Total debt $325.91B Interest coverage 3.33x -73% vs MBGYY Carries about 3.7x less debt cushion than MBGYY.
Total debt $60.45B Interest coverage -15.06x -100% vs MBGYY This peer has almost no interest-payment cushion compared with MBGYY.
Total debt $128.77B Interest coverage 4.00x -67% vs MBGYY Carries about 3.1x less debt cushion than MBGYY.
Total debt $163.30B Interest coverage -6.88x -100% vs MBGYY This peer has almost no interest-payment cushion compared with MBGYY.
What you should know
The case for and against MBGYY
3 Rewards
3 Risks
Rewards
-
Returns 5.6% on equity, ahead of 80% of its peers.
-
Free cash flow was positive in 4/10 years.
-
Trades at 8.8x P/E vs peer median 23.0x (61.7% cheaper).
Risks
-
Stock trades 23.5% above its 5-year average P/E.
-
Operating margin compressed from 11.9% to 6.2% over 3 years.
-
Net debt grew 4.6% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
8.81x
Forward P/E
7.83x
P/B
0.47x
P/S
0.40x
EV/EBITDA
11.39x
PEG ratio
0.59x
Profitability
How much profit each dollar creates
Gross margin
16.2%
Operating margin
6.2%
Net margin
3.9%
ROE
5.6%
ROA
1.9%
Health
Liquidity and balance-sheet strength
Debt / equity
1.10x
Current ratio
1.32x
Quick ratio
0.77x
Total debt
$118.61B
Total cash
$19.19B
Growth
How the business has been compounding
Revenue TTM
$150.25B
Revenue 5Y CAGR
-4.1%
EPS TTM
1.53
EPS 5Y CAGR
-26.7%
Cash flow
How much cash the business throws off
Operating CF TTM
$20.89B
Free CF TTM
$9.59B
FCF margin
6.4%
Dividend
Shareholder payout
Yield
7.6%
Payout ratio
66.6%
Last ex-div date
2026-04-20