Critical Contrast: QuantumScape (NYSE:QS) and AB Volvo (OTCMKTS:VLVLY)

AB Volvo (OTCMKTS:VLVLY) and QuantumScape (NYSE:QS) are both auto/tires/trucks companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.

Profitability

This table compares AB Volvo and QuantumScape’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AB Volvo	8.32%	22.17%	5.92%
QuantumScape	N/A	-39.90%	-35.31%

Volatility and Risk

AB Volvo has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500. Comparatively, QuantumScape has a beta of 2.61, meaning that its share price is 161% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for AB Volvo and QuantumScape, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AB Volvo	1	6	0	3	2.50
QuantumScape	1	6	0	0	1.86

QuantumScape has a consensus target price of $11.13, suggesting a potential upside of 57.96%. Given QuantumScape’s higher possible upside, analysts clearly believe QuantumScape is more favorable than AB Volvo.

Insider and Institutional Ownership

0.0% of AB Volvo shares are owned by institutional investors. Comparatively, 29.9% of QuantumScape shares are owned by institutional investors. 3.9% of QuantumScape shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares AB Volvo and QuantumScape”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AB Volvo	$48.98 billion	1.48	$3.52 billion	$2.03	17.52
QuantumScape	N/A	N/A	-$477.86 million	($0.71)	-9.93

AB Volvo has higher revenue and earnings than QuantumScape. QuantumScape is trading at a lower price-to-earnings ratio than AB Volvo, indicating that it is currently the more affordable of the two stocks.

Summary

AB Volvo beats QuantumScape on 9 of the 13 factors compared between the two stocks.

About AB Volvo

AB Volvo (publ), together with its subsidiaries, manufactures and sells trucks, buses, construction equipment, and marine and industrial engines in Europe, the United States, Asia, Africa, and Oceania. The company provides heavy-duty trucks for long-haulage and construction work and light-duty trucks for distribution purposes under the Volvo, Renault Trucks, Mack, Eicher, and Dongfeng Trucks brands; and city and intercity buses, coaches, and chassis under the Prevost and Volvo Bus brands. It offers road construction machine, haulers, wheel loaders, excavators, and compact equipment. In addition, the company offers engines and power solutions for leisure and commercial vessels, as well as for power generation, industrial, and off-highway applications under the Volvo Penta brand name. Further, it provides financing, insurance, rental, spare parts, repairs, preventive maintenance, service agreement, and assistance services. The company offers its products and services through a network of dealerships and workshops. It has a strategic alliance with Isuzu Motors within commercial vehicles; a partnership with Samsung SDI Co to develop batteries for its electric products; and an agreement with Aurora to develop autonomous trucks. AB Volvo (publ) was incorporated in 1915 and is headquartered in Gothenburg, Sweden.

About QuantumScape

QuantumScape Corporation, a research and development stage company, focuses on the development and commercialization of solid-state lithium-metal batteries for electric vehicles and other applications. The company was founded in 2010 and is headquartered in San Jose, California.