Tesla, Inc. (TSLA)vs Amazon.com, Inc. (AMZN)

Quick verdict

Tesla, Inc. (TSLA) and Amazon.com, Inc. (AMZN) appeal to different investors. On our six-factor framework, TSLA scores 4 and AMZN scores 2. TSLA looks cheaper on the multiples that matter, while AMZN grows faster and AMZN earns higher returns on capital. Overall, TSLA edges this comparison, but the right pick depends on whether you prioritise value, growth, income or balance-sheet safety.

2-year relative performance

At-a-glance comparison

Business model and revenue mix

Tesla, Inc. operates in Auto Manufacturers (Consumer Cyclical), while Amazon.com, Inc. sits in Internet Retail (Consumer Cyclical). Because both compete in the same sector, this is a direct head-to-head and the financial differences below are especially meaningful. TSLA carries a beta of 1.25 versus 1.53 for AMZN, meaning AMZN has historically been the more volatile of the two.

Valuation

On valuation, TSLA is the cheaper stock. TSLA trades on a forward P/E of 26.25 and EV/EBITDA of 11.17, against 45.95 and 32.34 for AMZN. Price-to-sales is 13.28 vs 20.74, and free-cash-flow yield is 4.5% vs 2.0%. A higher multiple is only justified if the company can sustain faster growth or wider margins, which is exactly what the next sections test.

Growth profile

AMZN is the faster grower. TSLA has compounded revenue at 4.0% over three years with EPS growth of 5.0%, while AMZN has delivered 16.9% revenue and 25.7% EPS growth. Growth like this is the single biggest driver of long-term returns, but it also tends to come with a richer valuation, so it must be weighed against the multiples above.

Profitability and quality

On profitability and quality, AMZN is stronger. TSLA posts a 28.6% operating margin, 23.0% return on equity and 24.1% return on invested capital. AMZN posts 45.9%, 26.3% and 17.3% respectively. Return on invested capital above roughly 15% is a hallmark of a durable competitive advantage, so this metric deserves particular attention.

Balance-sheet risk

TSLA has the safer balance sheet. TSLA carries net-debt/EBITDA of 1.01x with a current ratio of 3.57, versus 0.86x and 1.04 for AMZN. Lower leverage gives a company more room to invest through a downturn and reduces the risk of dilution or distress.

Price performance and shareholder returns

Over the past year TSLA returned 19.9% against 4.0% for AMZN; on a three-year annualised basis it is 47.7% vs 42.8%. TSLA yields 0.4% and AMZN yields 0.0%. Past performance never guarantees future results, but the multi-year track record shows how the market has rewarded each business so far.

Which stock fits which investor

For value-oriented investors, TSLA is the better fit on today's multiples. Growth investors will likely prefer AMZN, which is expanding faster. Income investors should lean toward TSLA for its higher shareholder yield, while investors who prize quality-at-a-reasonable-price will favour AMZN for its superior returns on capital. This is a comparison of facts, not a recommendation — your time horizon, risk tolerance and existing holdings should drive the final decision.

• Value: TSLA
• Growth: AMZN
• Income: TSLA
• Quality: AMZN

Frequently asked questions

Is TSLA or AMZN the better buy right now?

Neither is universally "better." TSLA scores 4 and AMZN scores 2 on our six-factor framework. TSLA is cheaper, AMZN grows faster, and AMZN is higher quality — so the right pick depends on your objective.

Which stock is cheaper, TSLA or AMZN?

TSLA is the cheaper stock across forward P/E (26.25 vs 45.95), EV/EBITDA (11.17 vs 32.34) and price-to-sales (13.28 vs 20.74).

Which has grown faster, TSLA or AMZN?

AMZN has the stronger growth profile, with three-year revenue CAGR of 4.0% for TSLA versus 16.9% for AMZN.

Which stock pays a bigger dividend?

TSLA yields 0.4% and AMZN yields 0.0%, so TSLA is the stronger income choice.

Related comparisons

• AAPL vs TSLA
• AMZN vs BABA
• AMZN vs LCID
• AMZN vs MSFT
• AMZN vs RIVN
• GOOGL vs AMZN