One-glance verdict
Undervalued
$25.61 our estimate vs market $4.08
Wall Street consensus: $5.91 (-76.9% lower than our fair-value estimate)
84% below our estimate, below the bear case
Fundamentals snapshot
Nissan Motor Co., Ltd.
NSANY · PNK · Consumer Cyclical · Auto Manufacturers
Current price
$4.08
52-week range
$3.72 - $6.06
Market cap
$7.13B
Balance sheet
Distressed
0.51x Concerning
Net debt $44.62B. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
3 Risks
1 rewards · 3 risks
- Reward Free cash flow was positive in 1/10 years.
- Risk Net debt grew 32.5% over 3 years.
- Risk Return on equity was -7.7% last year — the company lost money on shareholders' equity.
- Risk Operating margin compressed from 3.6% to 2.6% over 3 years.
What this company does
Nissan Motor Co., Ltd.
Nissan is a global car company selling vehicles under the Nissan and Infiniti brands, primarily earning money from the car sale itself and from its sales financing arm (the loans and leases it provides to buyers). This means the company's performance relies heavily on both global demand for new cars and the ability of customers to get credit.
How the company got here
Nissan's story starts in Japan in 1933, initially selling cars under the Datsun brand. After producing vehicles for the military during World War II, the company began exporting to the United States in the 1950s and grew rapidly. A major turning point came in 1999 when Nissan, facing severe financial trouble, formed a powerful alliance with French automaker Renault, which is credited with saving the company. This partnership helped Nissan become a leader in electric vehicles with the launch of the Nissan LEAF in 2010, one of the first mass-produced electric cars.
What it actually does
Nissan is a global car company that designs, builds, and sells vehicles for everyday people and businesses. You would recognize their cars, trucks, and SUVs under the Nissan brand, as well as their luxury vehicles sold under the Infiniti brand. Beyond just making cars, the company also provides services to help people buy them, such as car loans and leasing options. They are known for a wide range of vehicles, from the popular Rogue SUV and Titan pickup truck to the iconic Z series sports car and the all-electric LEAF.
Automotive
This is Nissan's main business and where it makes the vast majority of its money. It includes the entire process of creating and selling vehicles, from the initial design and engineering to manufacturing and marketing cars, trucks, and vans. Customers for this segment are individual car buyers and businesses looking for vehicles for their operations. This part of the company generates revenue (the total money coming in before any costs are taken out) through the sale of vehicles and related parts under the Nissan and Infiniti brands.
Sales Financing
This segment is the financial services arm of the company, and it plays a supporting role to the main automotive business. It helps customers purchase Nissan and Infiniti vehicles by offering them loans (auto credit) and leasing options directly at the dealership. This division makes money by charging interest on the loans it provides and from the fees associated with leasing agreements. While much smaller than the car-making part of the business, it's an important tool to help make their vehicles more affordable and accessible to more people.
What management is betting on now
Nissan's current strategy, called "The Arc," focuses heavily on electric vehicles (EVs) and technology. The company is investing billions to launch many new electrified models, aiming for a significant portion of its global sales to be electric by 2030. At the same time, Nissan is undergoing a major restructuring to become more efficient and profitable, which includes reducing the number of different models it produces to focus on its most successful ones. The goal is to grow sales while also improving its operating profit margin (the percentage of revenue left after paying for the day-to-day costs of running the business).
Price history
How the share price has moved
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Loading price history…
Is it cheap or expensive?
Fair value $25.61 vs current price $4.08
Wall Street consensus is the average analyst price target: $5.91 (-76.9% lower than our fair-value estimate).
Our most-likely fair value is $25.61 a share — about 527.7% above today's price of $4.08, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $44.6B. Interest coverage 0.5x.
Net debt
$44.62B
Interest coverage
0.51x
Nissan Motor Co., Ltd.'s profit covers its interest bill about 0.5 times over. which is stronger than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
NSANY
BASELINE
Nissan Motor Co., Ltd.
Total debt $58.85B Interest coverage 0.51x This is the baseline the peer rows are being compared against.
Total debt $92.10B Interest coverage -4.96x -100% vs NSANY This peer has almost no interest-payment cushion compared with NSANY.
Total debt $60.50B Interest coverage -15.06x -100% vs NSANY This peer has almost no interest-payment cushion compared with NSANY.
Total debt $2.34B Interest coverage 2.85x +459% vs NSANY Carries about 5.6x more debt cushion than NSANY.
Total debt $5.52B Interest coverage 4.71x +824% vs NSANY Carries about 9.2x more debt cushion than NSANY.
Total debt $2.65B Interest coverage 12.38x +2,329% vs NSANY Carries about 24.3x more debt cushion than NSANY.
What you should know
The case for and against NSANY
1 Reward
3 Risks
Rewards
-
Free cash flow was positive in 1/10 years.
Risks
-
Net debt grew 32.5% over 3 years.
-
Return on equity was -7.7% last year — the company lost money on shareholders' equity.
-
Operating margin compressed from 3.6% to 2.6% 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)
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Forward P/E
4.74x
P/B
0.23x
P/S
0.00x
EV/EBITDA
15.32x
PEG ratio
1.03x
Profitability
How much profit each dollar creates
Gross margin
14.5%
Operating margin
2.6%
Net margin
-3.4%
ROE
-7.7%
ROA
0.7%
Health
Liquidity and balance-sheet strength
Debt / equity
1.72x
Current ratio
1.54x
Quick ratio
1.21x
Total debt
$58.85B
Total cash
$14.23B
Growth
How the business has been compounding
Revenue TTM
$78.56B
Revenue 5Y CAGR
4.3%
EPS TTM
-1.92
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$5.09B
Free CF TTM
$-2.21B
FCF margin
-2.8%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
2024-03-27