Critical Survey: Lotus Technology (NASDAQ:LOT) versus Honda Motor (NYSE:HMC)

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

Profitability

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

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Lotus Technology and Honda Motor, as reported by MarketBeat.

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

Lotus Technology currently has a consensus price target of $7.00, indicating a potential upside of 60.55%. Given Lotus Technology’s higher probable upside, analysts plainly believe Lotus Technology is more favorable than Honda Motor.

Risk & Volatility

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

Institutional & Insider Ownership

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

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lotus Technology	$947.09 million	0.31	-$742.00 million	($0.84)	-5.19
Honda Motor	$21,208.66 billion	0.00	$7.64 billion	$4.72	6.50

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.

Summary

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

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.

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.