Honda Motor (NYSE:HMC) and Lotus Technology (NASDAQ:LOT) Financial Analysis

Honda Motor (NYSE:HMC) and Lotus Technology (NASDAQ:LOT) are both auto/tires/trucks companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, risk, valuation, earnings, analyst recommendations, profitability and dividends.

Profitability

This table compares Honda Motor and Lotus Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Honda Motor	5.34%	8.72%	3.88%
Lotus Technology	N/A	N/A	-39.69%

Risk and Volatility

Honda Motor has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, Lotus Technology has a beta of 0.11, suggesting that its share price is 89% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Honda Motor and Lotus Technology, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Honda Motor	0	0	0	0	N/A
Lotus Technology	0	1	0	0	2.00

Lotus Technology has a consensus price target of $7.00, indicating a potential upside of 56.60%. Given Lotus Technology’s higher probable upside, analysts clearly believe Lotus Technology is more favorable than Honda Motor.

Earnings & Valuation

This table compares Honda Motor and Lotus Technology”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Honda Motor	$21,208.66 billion	0.00	$7.64 billion	$4.72	6.74
Lotus Technology	$947.09 million	0.32	-$742.00 million	($0.84)	-5.32

Honda Motor has higher revenue and earnings than Lotus Technology. Lotus Technology is trading at a lower price-to-earnings ratio than Honda Motor, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

5.3% of Honda Motor shares are owned by institutional investors. Comparatively, 63.4% of Lotus Technology shares are owned by institutional investors. 0.0% of Honda Motor shares are owned by company insiders. Comparatively, 0.2% of Lotus Technology shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Honda Motor beats Lotus Technology on 8 of the 12 factors compared between the two stocks.

About Honda Motor

Honda Motor Co., Ltd. develops, manufactures, and distributes motorcycles, automobiles, power, and other products in Japan, North America, Europe, Asia, and internationally. It operates through four segments: Motorcycle Business, Automobile Business, Financial Services Business, and Power Product and Other Businesses. The Motorcycle Business segment produces motorcycles, including sports, business, and commuter models; and various off-road vehicles, such as all-terrain vehicles and side-by-sides. The Automobile Business segment offers passenger cars, light trucks, and mini vehicles. The Financial Services Business segment provides various financial services, including retail lending and leasing services to customers, as well as wholesale financing services to dealers. The Power Product and Other Businesses manufactures and sells power products, such as general purpose engines, lawn mowers, generators, water pumps, brush cutters, tillers, outboard marine engines, and snow throwers. This segment also offers HondaJet aircraft. The company also sells spare parts; and provides after-sale services through retail dealers directly, as well as through independent distributors and licensees. Honda Motor Co., Ltd. was founded in 1946 and is headquartered in Tokyo, Japan.

About Lotus Technology

Lotus Technology Inc. engages in the design, development, and sale of battery electric lifestyle vehicles worldwide. It also distributes sports cars. The company sells its products under the Lotus brand. Lotus Technology Inc. is based in Shanghai, China.