One-glance verdict
Undervalued
$32.81 our estimate vs market $13.83
Wall Street consensus: $15.07 (-54.1% lower than our fair-value estimate)
58% below our estimate, below the bear case
Fundamentals snapshot
Mercedes-Benz Group AG
MBGYY · PNK · Consumer Cyclical · Auto Manufacturers
Current price
$13.83
52-week range
$13.52 - $18.16
Market cap
$52.96B
Balance sheet
Watch
12.24x Strong cushion
Net debt $94.16B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Returns 5.3% on equity, ahead of 40% of its peers.
- Reward Free cash flow was positive in 4/10 years.
- Risk Stock trades 31.9% above its 5-year average P/E.
- Risk Operating margin compressed from 11.9% to 6.0% over 3 years.
What this company does
Mercedes-Benz Group AG
Mercedes-Benz is a German company that sells luxury cars and vans all over the world, which is how it makes most of its money. The company also earns significant income from its financing division by offering car loans, leases, and insurance directly to buyers. This focus on premium, high-priced vehicles allows the company to earn strong profit margins (the percentage of each dollar in sales that the company actually keeps as profit).
How the company got here
The story of Mercedes-Benz starts in 1886 when Carl Benz patented what is considered the first automobile. Around the same time, Gottlieb Daimler was also creating his own motorized vehicles. The two companies, Benz & Cie. and Daimler Motoren Gesellschaft (DMG), merged in 1926 to form Daimler-Benz AG, creating the Mercedes-Benz brand. Over the years, the company became known for luxury and safety innovations, like being the first to introduce anti-lock brakes (ABS) and airbags in production cars. After a period as DaimlerChrysler and later Daimler AG, the company spun off its truck and bus division in 2021 and renamed itself Mercedes-Benz Group AG in 2022 to focus on its car and van businesses.
What it actually does
Mercedes-Benz is a German company that makes and sells a wide range of vehicles, from luxury cars to commercial vans. You would recognize their cars on the street by the three-pointed star logo. Beyond just selling vehicles, the company also provides services to help people buy and own them, such as financing (loans to buy a car), leasing (renting a car for a long period), and insurance. They are also investing heavily in electric vehicles and the software that runs in their cars.
Mercedes-Benz Cars
This is the largest and most well-known part of the company, making up the vast majority of its sales. It's where the luxury passenger cars are made, including the famous S-Class sedans and G-Class SUVs. This segment also includes the ultra-high-end Mercedes-Maybach, for those seeking ultimate luxury, and the high-performance Mercedes-AMG brand, for those who want a sportier driving experience. This division is the main engine of the company's revenue (the total money it brings in from sales).
Mercedes-Benz Vans
This division builds and sells commercial and private vans. For businesses, they offer models like the large Sprinter van, often used for deliveries and as work vehicles, and the smaller Citan and Vito vans for city-based trades. They also make vans for personal use, like the V-Class, which is a luxurious multi-purpose vehicle for families. While a smaller part of the company than the car division, it's a significant business focused on both commercial and private customers.
Mercedes-Benz Mobility
This part of the company doesn't make cars, but provides the financial services that help people and businesses acquire and use them. This includes offering financing (loans), leasing (long-term rentals), vehicle subscriptions, and insurance for Mercedes-Benz cars and vans. It also handles fleet management for business customers, helping them manage their vehicle fleets efficiently. This segment supports the vehicle sales divisions by making it easier for customers to get into a Mercedes-Benz.
What management is betting on now
The company's leadership is heavily focused on shifting towards electric vehicles (EVs), aiming to have electric versions of their models in every segment. They are investing a lot in new electric vehicle platforms and battery technology to compete in the growing EV market. Another major bet is on software, with the development of their own operating system called MB.OS, which will control everything from entertainment to automated driving features. The strategy is to focus more on high-end, luxury vehicles, which bring in more profit per car, rather than just selling the highest number of vehicles.
Price history
How the share price has moved
—
Loading price history…
Is it cheap or expensive?
Fair value $32.81 vs current price $13.83
Wall Street consensus is the average analyst price target: $15.07 (-54.1% lower than our fair-value estimate).
Our most-likely fair value is $32.81 a share — about 137.2% above today's price of $13.83, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $94.2B. Interest coverage 12.2x.
Net debt
$94.16B
Interest coverage
12.24x
Mercedes-Benz Group AG's profit covers its interest bill about 12.2 times over. which is stronger than most peers shown here.
Watch
Worse cushion
Baseline
Better cushion
MBGYY
BASELINE
Mercedes-Benz Group AG
Total debt $115.24B Interest coverage 12.24x This is the baseline the peer rows are being compared against.
Total debt $323.07B Interest coverage 3.33x -73% vs MBGYY Carries about 3.7x less debt cushion than MBGYY.
Total debt $128.77B Interest coverage 4.00x -67% vs MBGYY Carries about 3.1x less debt cushion than MBGYY.
Total debt $3.39B Interest coverage 50.94x +316% vs MBGYY Carries about 4.2x more debt cushion than MBGYY.
Total debt $7.91B Interest coverage 8.65x -29% vs MBGYY Carries about 1.4x less debt cushion than MBGYY.
What you should know
The case for and against MBGYY
3 Rewards
3 Risks
Rewards
-
Returns 5.3% on equity, ahead of 40% of its peers.
-
Free cash flow was positive in 4/10 years.
-
Trades at 9.4x P/E vs peer median 18.5x (49.2% cheaper).
Risks
-
Stock trades 31.9% above its 5-year average P/E.
-
Operating margin compressed from 11.9% to 6.0% 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)
9.41x
Forward P/E
8.10x
P/B
0.48x
P/S
0.41x
EV/EBITDA
12.20x
PEG ratio
3.05x
Profitability
How much profit each dollar creates
Gross margin
15.5%
Operating margin
6.0%
Net margin
3.7%
ROE
5.3%
ROA
1.7%
Health
Liquidity and balance-sheet strength
Debt / equity
1.05x
Current ratio
1.39x
Quick ratio
0.83x
Total debt
$115.24B
Total cash
$21.08B
Growth
How the business has been compounding
Revenue TTM
$151.20B
Revenue 5Y CAGR
-4.1%
EPS TTM
1.47
EPS 5Y CAGR
-26.7%
Cash flow
How much cash the business throws off
Operating CF TTM
$20.85B
Free CF TTM
$9.57B
FCF margin
6.3%
Dividend
Shareholder payout
Yield
7.4%
Payout ratio
82.7%
Last ex-div date
2026-04-20