Forget Tesla: This Cash-Rich Automotive Underdog Is A Value Buy

2 hours ago 3

Alex Sirois

Wed, May 27, 2026 astatine 7:52 AM CDT 4 min read

Quick Read

Tesla (TSLA) trades astatine highly stretched valuations contempt gross declining, nett income collapsing astir 50%, with lone 6% transportation growth. Stellantis (STLA) has been maligned arsenic a anemic automotive commercialized but determination are plentifulness of reasons to judge otherwise.
Tesla’s valuation rests connected robotaxi and Optimus promises with prediction markets assigning conscionable 10.5% likelihood to a California motorboat by June 30, portion Stellantis has executed a cleanable turnaround that resets strategy astir lawsuit request crossed electric, hybrid, and interior combustion vehicles.
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Tesla (NASDAQ:TSLA) is dominating each fiscal provender again aft a 15.22% one-month rip backmost to $433.59, fueled by the aforesaid robotaxi and Optimus communicative that has powered the banal for years. But here's what you should really beryllium watching.

The Tesla Story Has a Quality Problem

Tesla trades astatine a trailing P/E of astir 391 and a guardant P/E of 204, with an EV/EBITDA of 130. Strip distant the communicative and what you are paying for is deteriorating. Full-year 2025 gross declined 2.93%, nett income collapsed 46.79%, and operating income dropped 38.45%. Operating income fell 40.23% YoY successful Q3 2025 and 42.49% successful Q2 2025.

The Q1 2026 "beat" (EPS of $0.41 versus $0.3592) leaned connected one-time warranty and tariff-related gains, a $0.9 cardinal FX tailwind, and $380 cardinal successful non-innovative regulatory credits. Vehicle deliveries grew conscionable 6%, vigor retention gross fell 12%, and R&D climbed to $1.95 cardinal to money pre-revenue AI promises. Prediction markets enactment the likelihood of a California robotaxi motorboat by June 30 astatine 10.5% and an Optimus merchandise by year-end astatine 13.5%. That is the mathematics down a $1.628 trillion marketplace cap.

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The Contrarian Case: Stellantis

Stellantis (NYSE:STLA) is the contrarian's automaker. At $7.81 a stock and a $22.05 cardinal marketplace cap, the genitor of Jeep, Ram, Dodge, Chrysler, Fiat, Peugeot, and Maserati trades astatine a guardant P/E of 9 and a price-to-book beneath 1. Here is wherefore the setup deserves a person look.

1) A fortress equilibrium expanse bigger than the marketplace cap. Stellantis ended Q1 2026 with $37.37 cardinal successful currency and equivalents, good successful excess of the full equity value. The committee authorized a buyback of up to 10% of issued communal shares implicit an 18-month model astatine the April 14, 2026 AGM, and absorption issued up to €5 cardinal successful hybrid bonds to reenforce liquidity.

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