I know, it sounds like Covid’s methodical rally, but the right thing to do is 2013.
A year after Tesla launched its first electric sedán, Tesla S, its inventory has soared by 360%. But investors temporarily learned Tesla before its time and gave in. Over the next six years, Tesla’s inventory got nowhere.
It turns out that investors are putting Tesla back on a stage: they made an offer at a price that suggests it will sell more cars than is theoretically possible.
I’ll tell you everything in a moment. But first, let’s see what Tesla’s percentage value tells us.
Tesla’s market as an automobile manufacturer
At the current price, Tesla’s market is $393 billion, nearly twice as much as Toyota, the world’s largest automaker.
But while Toyota shipped 10. 74 million cars last year, 367,500 Teslas left Gigafactories. Why so much difference?
Is it because Tesla sells more expensive cars and makes a lot more profit? That would be part of that difference. But it turns out that Toyota makes a lot more from its cars.
Toyota generates about $ 19,000 in sales consistent with the car. And in the last quarter, you made $ 0. 06 for every dollar of sales you made (net profit margin).
Tesla earns much more consistent with the car, around $63,000. But in his peak success quarter, he earned $0. 015 per dollar of sales.
By my calculations, Tesla would have to sell 12 million cars a year to make up for Toyota’s profits.
But other people say that Tesla is not an automobile manufacturer, it is a generation company and will have to be appreciated as such.
Tesla’s market as a technology company
Let’s compare Tesla to some of America’s best-performing generation actions.
I will use one of the maximum valuation measures for expansion stocks, called price/earnings/expansion (PEG) ratio. Think of it as a fundamental “update” of the P/U.
In short, adjust the reading of a P/E on the expected expansion of an action. The larger the expected expansion relative to P/E, the lower the ratio. And vice versa.
As you can see, Tesla is trading around five times more than the tech stocks that flirt with their records. I checked the numbers to see what Tesla would like to offer to align with big tech.
Turns out it would take about 1. 3 million a year to reduce its PEG to the point of primary technologies, but is it even theoretically possible?
How much Tesla can sell
Before proceeding, I must point out a major failure in the knowledge of electric cars (EVs). Many sales figures bring together electric battery cars (BEVs) like Tesla’s with plug-in hybrid electric cars (PHEV).
The PHEV is powered by fuel and electricity, which Tesla manufactures, and the industry’s utmost knowledge greatly overestimates the demand for Tesla cars.
Here’s what global sales of PHEV electric cars look like:
This means that Tesla would have to have a quasi-monopoly on electric cars to verify their market value. Of course, demand for BEVs will increase over the years, as will competition.
Many automakers are quietly investing tens of billions of dollars in generating electric vehicles to catch up with Tesla, and it turns out they are starting to realize electric cars.
Take VW. Last September, the German car introduced the ID. 3, its first fully built electric car, and from the beginning surpassed the Tesla 3X in Norway, Tesla’s largest market in Europe.
Then there’s BYD, the “Tesla of China” backed up through Warren Buffett. Last July, he launched his first electric sedán, Han, which will compete head-on with Tesla. With 40,000 orders in just two months, it is expected to reach the best-selling electric car in China.
Other automakers are also not inactive.
Cut it any way you want. . .
But Tesla can’t get what’s included in the current percentage price, eer as an automaker or as a generation company.
Although I have the utmost respect for Elon Musk and what he does, I simply cannot perceive Tesla’s stock at this price. The irony is that neither does Elon Musk.
When Tesla traded for less than $100, Musk tweeted, “In my opinion, Tesla’s percentage value is too high. “Today, Tesla is worth four times that value.
Of all the people, I doubt the guy in the series about it.
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These are investment tips.
I have worked as a macroeconomic and equitable analyst in several monetary houses, adding Mauldin Economics, RiskHedge, Hard Assets Alliance and Garret/Galland.
I have worked as a macroeconomic and equitable analyst in several monetary houses, adding Mauldin Economics, RiskHedge, Hard Assets Alliance and Garret/Galland Research.
I had the ability to paint with some of the world’s investors, such as New York Times salesman John Mauldin and Jared Dillian, former ETF director for Lehman Brothers.
Today, I’m a monetary editor and an active investor. My research is presented at Yahoo Finance, Newsmax, Valuewalk and other leading monetary publications.