In its hundred-plus years in business, Ford has had to weather wars, economic swings, competition with the other automakers — and a pandemic that essentially shut down the economy in 2020. Amidst these challenges, even its most popular models from the past few decades haven’t been enough to ensure its dominance. Read on to see what the company has in store for consumers and investors and whether its upcoming business moves are calculated risks that could pay off.
|CEO Jim Farley’s Salary (2021)||$1.7M|
|What Ford Is Worth|
|Share Price, 52-Week Range||$10.61-$25.87|
|GOBankingRates’ Evaluation of Ford’s Net Worth||$125.56B|
|Information on 52-week range is accurate as of July 29, 2022.
Ford’s Market Cap: $56.28B
One of the most reliable gauges for what a company is really worth is market capitalization, or market cap for short. The market cap is the value of all of the company’s stock combined, giving you a sense of what value investors are placing on the company based on the price it is trading at.
Ford’s high and low share prices have been quite divergent over the last year, and as a result, so has Ford’s market cap. The stock has lost the bulk of the gains it made during the end of 2021 and early 2022.
Ford’s Net Worth: $125.56B
Although market cap gives you a sense of what the market values a company at, it’s based entirely on market sentiment — essentially reflecting the ever-changing opinions of investors — and it can change hourly. The GOBankingRates Evaluation, however, calculates a company’s net worth based on measurable figures like assets and revenue. It’s a more conservative valuation taking into account full-year profits and revenue from the last three years and the company’s assets and debts.
Based on Ford’s revenue and profits from the last three years, Ford is worth $125.56 billion.
How Ford Is Facing Competition and Changing Markets
Ford has survived two world wars, the Great Depression, massive vehicle recalls and a pandemic, but it faces competition in the form of industry disruptors like Tesla and Uber. The company is gearing up for what CEO Jim Farley last year told CNBC will be “the largest transformation of Ford since the Model T scaled,” with plans to invest $30 billion in electric vehicles by the end of 2025. As noted in a July 21 press release, the company intends to invest more than $50 billion in electric vehicles by the end of 2026.
Ford shares have nearly doubled since Farley took the helm on Oct. 1, 2020.
In September, Ford announced an $11.4 billion deal with SK Innovation, a South Korea-based battery maker, to build four battery and EV factories, CNBC reported. The deal positions Ford to compete with GM’s Ultium EV battery factories. According to CNBC, as of July, Ford says it has all the battery supplies needed to deliver 600,000 EVs per year by late 2023 and is on track to produce 2 million per year by 2026.
Ford also has a roughly 9.7% stake in EV maker Rivian, which went public on Nov. 10, 2021. In its second-quarter earnings release, Ford announced it had lost $2.4 billion on its holdings in that quarter alone, marking the second quarter in a row its investment lost money, InsideEVs reported. Ford previously noted that its investment in Rivian had declined $4 billion between the end of 2021 and early 2022.
Ford, like other automakers, has been hard hit by semiconductor chip shortages and other challenges resulting from the pandemic. Following a third quarter 2021 that saw earnings nearly double analysts’ expectations, with revenue that also outpaced projections, Ford disappointed on both counts in its fourth quarter 2021 earnings release, although its 26-cent earnings per share was consistent with its guidance for the quarter, CNBC reported. During a media call reported by CNBC, Ford chief financial officer John Lawler attributed the EPS shortfall to missed production targets due to semiconductor chip shortages and other supply-chain issues.
Six months later, Ford is still hampered by supply chain challenges and feeling the effects of inflation, but it seems to have turned a corner. Its second quarter 2022 earnings, automotive revenue and profits all rose compared to a year prior, easily beating analysts’ expectations, CNBC reported. Sales were up 1.8% year over year, based on strong SUV and crossover demand, and production increased as well. Lawler confirmed the company’s earlier full-year guidance, saying Ford expects 15% to 25% earnings growth compared to last year. In addition, Ford has restored its quarterly dividend to its pre-pandemic 15 cents per share.
Ford’s History and CEO
CEO Jim Farley had been with Ford for about 13 years and served as chief operating officer, among other roles, prior to being named CEO. In 2021, Farley earned a base salary of $1.7 million.
Ford was founded by Henry Ford near the turn of the 20th century. The company’s Model A was first sold in July 1903, and the company’s genius use of assembly lines to increase mass production turned the carmaker into one of the most recognizable brands in the country. More recently, the Ford F-Series truck has been America’s best-selling pickup truck for more than four decades.
Daria Uhlig contributed to the reporting for this article.
Data is accurate as of July 29, 2022, and is subject to change.
Methodology: The GOBankingRates Evaluation assesses a company’s net worth based on the company’s total assets, total liabilities, and revenue and net income from the last three years. Base value is established by subtracting total liabilities from total assets from the company’s last full fiscal year. Income value is established by taking the average of the revenue from the last three full fiscal years, plus 10 times the average of the net profits from the last three full fiscal years, and then calculating the average of those two figures. The final GOBankingRates Evaluation number is the sum of the base value and the income value.