One-glance verdict
Overvalued
$-132.57 our estimate vs market $197.11
Wall Street consensus: $231.58 (-274.7% lower than our fair-value estimate)
249% below our estimate, beyond the bull case
Fundamentals snapshot
Toyota Motor Corporation
TM · NYQ · Consumer Cyclical · Auto Manufacturers
Current price
$197.11
52-week range
$166.10 - $248.90
Market cap
$233.41B
Balance sheet
Watch
62.47x Strong cushion
Net debt $196.14B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 3.8% last year.
- Reward Returns 12.4% on equity, ahead of 83% of its peers.
- Risk Stock trades 15675.8% above its 5-year average P/E.
- Risk Forward P/E (12.5x) is higher than trailing (8.9x) - earnings are expected to drop.
What this company does
Toyota Motor Corporation
Toyota is one of the world's biggest automakers, selling millions of cars, trucks, and SUVs like the Camry and RAV4 under its Toyota and Lexus brands. The company makes most of its money from these vehicle sales but also profits from providing car loans and leases, making its success a key indicator of consumer spending and the global auto industry's shift to hybrid and electric vehicles.
How the company got here
Toyota's story begins in 1933, not with cars, but with automatic looms used for weaving fabric. The founder's son, Kiichiro Toyoda, used the proceeds from selling loom patents to venture into automobile manufacturing, officially establishing the Toyota Motor Corporation in 1937. After World War II, the company studied American manufacturing processes to improve its own efficiency. A key turning point was the development of the Toyota Production System (TPS), a philosophy focused on eliminating waste and improving efficiency that revolutionized manufacturing. This system, along with a reputation for quality and reliability, helped Toyota expand globally, becoming the top-selling import brand in the U.S. by 1975.
What it actually does
Most people know Toyota for its cars, trucks, and SUVs, like the Camry, Corolla, and Tacoma. The company sells a wide range of vehicles under brands like Toyota and the luxury brand Lexus. Beyond just selling cars, Toyota is also deeply involved in the future of transportation, developing hybrid, electric, and even hydrogen-powered vehicles. What many don't realize is that when you buy a Toyota, you might also use their in-house financing and insurance services to make the purchase. The company also has other smaller businesses, including building houses and developing robotics.
Automotive
This is the largest and most well-known part of Toyota, responsible for designing, manufacturing, and selling vehicles. It includes their main Toyota brand, the luxury Lexus line, and other brands like Hino for commercial vehicles. This segment generates the vast majority of the company's revenue (the money it makes from sales) by selling cars, trucks, minivans, and SUVs to customers around the world. They make everything from small, fuel-efficient cars to large pickup trucks and luxury sedans.
Financial Services
When customers buy or lease a Toyota or Lexus, this part of the company helps them pay for it. It acts like a bank specifically for Toyota customers, offering loans and lease agreements directly at the dealership. This segment makes money by charging interest on those loans and through leasing fees. It's a significant business for Toyota, helping to make their vehicles more affordable and accessible for millions of people.
All Other
This is a collection of Toyota's smaller business ventures that go beyond making and financing cars. It includes a variety of operations such as building and selling houses in Japan, information technology, and even a web portal for car information. While this segment is a much smaller slice of the company's overall business compared to automotive sales, it shows Toyota's interest in exploring new areas. These ventures allow the company to experiment with new technologies and business models.
What management is betting on now
Toyota is heavily focused on what it calls a "multi-pathway approach" to future vehicles, meaning it isn't going all-in on just one technology. The company is significantly investing in expanding its production of hybrid vehicles, which combine a gasoline engine with an electric motor, seeing them as a practical bridge for customers not ready for fully electric cars. At the same time, Toyota is accelerating its investment in fully electric vehicles (EVs) and hydrogen fuel cell technology as part of its long-term goal to achieve carbon neutrality (removing as much carbon dioxide from the atmosphere as it emits). They are also investing in artificial intelligence and robotics to improve manufacturing and develop future mobility services.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2012 Q4
$8.87B
FY2013 Q4
$16.98B
Revenue
$234.60B
Net income
$10.23B
Diluted EPS
3.23
Operating cash flow
$26.06B
Free cash flow
$16.98B
Fetching…
Sources
Revenue
$226.11B
Net income
$3.45B
Diluted EPS
1.10
Operating cash flow
$17.67B
Free cash flow
$8.87B
Fetching…
Sources
Is it cheap or expensive?
Fair value $-132.57 vs current price $197.11
Wall Street consensus is the average analyst price target: $231.58 (-274.7% lower than our fair-value estimate).
Our most-likely fair value is $-132.57 a share — about 167.3% below today's price of $197.11, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Watch
Net debt $196.1B. Interest coverage 62.5x.
Net debt
$196.14B
Interest coverage
62.47x
Toyota Motor Corporation's profit covers its interest bill about 62.5 times over. which is stronger than every peer shown here and 3 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Watch
Worse cushion
Baseline
Better cushion
TM
BASELINE
Toyota Motor Corporation
Total debt $281.71B Interest coverage 62.47x This is the baseline the peer rows are being compared against.
Total debt $92.14B Interest coverage -4.96x -100% vs TM This peer has almost no interest-payment cushion compared with TM.
Total debt $128.77B Interest coverage 4.00x -94% vs TM Carries about 15.6x less debt cushion than TM.
Total debt $163.30B Interest coverage -6.88x -100% vs TM This peer has almost no interest-payment cushion compared with TM.
Total debt $60.50B Interest coverage -15.06x -100% vs TM This peer has almost no interest-payment cushion compared with TM.
Total debt $326.22B Interest coverage 3.33x -95% vs TM Carries about 18.8x less debt cushion than TM.
What you should know
The case for and against TM
3 Rewards
3 Risks
Rewards
-
Revenue grew 3.8% last year.
-
Returns 12.4% on equity, ahead of 83% of its peers.
-
Free cash flow was positive in 1/10 years.
Risks
-
Stock trades 15675.8% above its 5-year average P/E.
-
Forward P/E (12.5x) is higher than trailing (8.9x) - earnings are expected to drop.
-
Net debt grew 31.8% 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)
8.91x
Forward P/E
12.49x
P/B
16.03x
P/S
0.00x
EV/EBITDA
6.29x
PEG ratio
1.56x
Profitability
How much profit each dollar creates
Gross margin
16.8%
Operating margin
7.9%
Net margin
8.6%
ROE
12.4%
ROA
2.3%
Health
Liquidity and balance-sheet strength
Debt / equity
1.15x
Current ratio
1.17x
Quick ratio
0.95x
Total debt
$281.71B
Total cash
$85.57B
Growth
How the business has been compounding
Revenue TTM
$892.82B
Revenue 5Y CAGR
4.8%
EPS TTM
22.12
EPS 5Y CAGR
-6.4%
Cash flow
How much cash the business throws off
Operating CF TTM
$95.58B
Free CF TTM
$1.15B
FCF margin
0.1%
Dividend
Shareholder payout
Yield
3.2%
Payout ratio
26.4%
Last ex-div date
2026-03-31