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Warren Buffett-Led Berkshire Hathaway Sells Some Apple Stock. Should You?

01-16

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Should You?","url":"https://stock-news.laohu8.com/highlight/detail?id=2412979089","media":"Motley Fool","summary":"Buffett loves Apple's relentless stock buybacks, and so should you.","content":"<html><head></head><body><ul style=\"\"><li><p>Berkshire acquired the vast majority of its Apple stake between 2016 and 2018.</p></li><li><p>The decision to hold Apple stock indicates that Berkshire views it as a good value.</p></li><li><p>Investors can depend on Apple’s capital return program even as organic growth has slowed.</p></li></ul><p>On Feb. 14, <strong>Berkshire Hathaway</strong> filed its 13F report for the period ended Dec. 31, 2023. There weren&#39;t too many sizable moves, but one noticeable one was that Berkshire sold around 10 million shares of <strong>Apple</strong>, trimming the position by a little over 1%.</p><p>Let&#39;s discuss Berkshire&#39;s stake in Apple, what Berkshire&#39;s moves could indicate about its thoughts on the market, and what you should do if you own or want to buy the tech stock.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/1ba58bcbaaa509b62204fc84fd14153f\" alt=\"Image source: Getty Images.\" title=\"Image source: Getty Images.\" tg-width=\"700\" tg-height=\"466\"/><span>Image source: Getty Images.</span></p><h2 id=\"id_2666682996\">Berkshire&#39;s evolving Apple position</h2><p>Berkshire began acquiring Apple stock in 2016. By the end of 2018, Berkshire had racked up just shy of 1 billion shares. As of the end of 2023, Berkshire held 905.6 million shares.</p><p>Apple has become Berkshire&#39;s largest holding because the buying spree between 2016 and 2018 proved to be a genius move. Apple stock is up 366.6% between the end of 2018 and Feb. 14. Berkshire sold 93.5 million shares in 2020. But aside from that, the position has remained relatively unchanged.</p><p>Even after the fourth-quarter 2023 sale, Apple remains 45.5% of Berkshire&#39;s public equity portfolio, with Berkshire owning 5.9% of the company.</p><h2 id=\"id_1712136768\">What the move could signal</h2><p>I have two key takeaways from Berkshire&#39;s decision to keep its Apple position mostly unchanged between 2021 and 2023.</p><p>The first is that Berkshire doesn&#39;t have better ideas than Apple. If it did, it could divert its enormous profits from Apple stock elsewhere. Effectively, Berkshire doesn&#39;t have a good enough alternative idea to justify selling Apple stock and suffering the associated tax consequences.</p><p>The second takeaway is that Berkshire views Apple as a good value, not necessarily as a growth stock.</p><p>Berkshire CEO Warren Buffett is a value investor at heart, and Berkshire&#39;s overall portfolio is incredibly value-oriented. The top five holdings in its public equity portfolio are Apple, <strong>Bank of America</strong>, <strong>American Express</strong>, <strong>Coca-Cola</strong>, and <strong>Chevron</strong>. Outside of its public equity portfolio, the most valuable assets Berkshire owns are its property and casualty insurance business, its 100% ownership of BNSF railroad, its 92% ownership of Berkshire Hathaway Energy, and several stakes or partial stakes in other companies.</p><p>Berkshire isn&#39;t the kind of company to go out and ride the hot trend, like artificial intelligence (AI) today or the metaverse a few years ago. It&#39;s also not the kind of company to change its investment strategy.</p><p>In its 2023 annual shareholder meeting from last May, Warren Buffett praised Apple, saying the following:</p><blockquote><p>Our criteria for Apple isn&#39;t different than the other businesses we own, it just happens to be a better business than any we own and we put a fair amount of money in it but we haven&#39;t got more money in it than we&#39;ve got in the railroad. Our railroad is a very good business but it&#39;s not remotely as good as Apple&#39;s business.</p></blockquote><p>In other words, Apple doesn&#39;t get preferential treatment over other companies, it just continues to check all of the boxes. A couple of minutes later in the meeting, Buffett said: &#34;I made a mistake a couple years ago and I sold some shares.&#34; What he&#39;s referring to are the 93.5 million shares sold in the second half of 2020 that we discussed earlier. Buffett defended it by saying some tax-related factors made the move advisable, but he still seemed to regret it.</p><p>So, if Buffett said that selling Apple was a mistake, you may wonder why Berkshire sold a little over 10 million shares in Q4 2023. Since it is a relatively small amount, my guess is that this may have been tax-related. We will hear more about Buffett&#39;s opinions on Apple during Berkshire&#39;s 2024 annual meeting on May 4. If I had to guess, the investment thesis on Apple hasn&#39;t changed.</p><h2 id=\"id_1693367095\">Apple&#39;s ace in the hole</h2><p>Berkshire is a big believer in the power of stock buybacks, but only if the business is good. This is why Berkshire famously doesn&#39;t pay a dividend, preferring instead to repurchase its own stock. Dividends are &#34;double taxed&#34; because they are paid with income that is taxed to the company and then taxed again when distributed to shareholders. Buybacks can be a better use of capital because they avoid this double taxing problem. They also reduce the outstanding share count of a company, which boosts earnings per share (EPS) and makes each existing share own a higher percentage of the company.</p><p>Over the last 10 years, Berkshire has reduced its outstanding share count by 12.2%, whereas Apple has reduced its share count by 36%. Buybacks continue to be the main driver of Apple&#39;s capital return program. In its recent quarter, Apple spent $20.1 billion on buybacks and $3.8 billion on dividends.</p><p>It&#39;s no secret that Apple&#39;s top- and bottom-line growth has slowed. The stock is also down 4.5% year to date, compared to a 5.5% gain in the <strong>S&amp;P 500</strong>. Buybacks help boost EPS when organic growth is slow. Buffett and his team don&#39;t seem too concerned about Apple&#39;s current slowdown or its valuation. After all, there are aspects of the business that are thriving -- namely, the high-margin services segment, which just set a record for operating income and revenue.</p><h2 id=\"id_3643268022\">A foundational holding</h2><p>Berkshire&#39;s decision to leave its Apple position mostly unchanged makes sense. The company isn&#39;t exhibiting the growth to make it a screaming buy. Unlike other big tech stocks, Apple has yet to make a meaningful splash with AI, namely because it doesn&#39;t have the business-to-business AI potential of a company like <strong>Nvidia</strong> or <strong>Microsoft</strong>.</p><p>Apple is a well-run business that is missing out on the market rally for a good reason. There doesn&#39;t seem to be any real reason to pile into Apple stock now. However, if the broader market continues to become more expensive (and Apple languishes), it will begin to look like a better value. Apple is a stock worth putting on the top of a watchlist or buying a starter position in if you don&#39;t own any. The stock is out of favor on Wall Street right now compared to other big tech plays, but that could change quickly if fundamentals improve or the valuation comes down.</p></body></html>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Warren Buffett-Led Berkshire Hathaway Sells Some Apple Stock. Should You?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWarren Buffett-Led Berkshire Hathaway Sells Some Apple Stock. Should You?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-02-19 11:15 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2024/02/18/warren-buffett-berkshire-hathaway-sell-apple-stock/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Berkshire acquired the vast majority of its Apple stake between 2016 and 2018.The decision to hold Apple stock indicates that Berkshire views it as a good value.Investors can depend on Apple’s capital...</p>\n\n<a href=\"https://www.fool.com/investing/2024/02/18/warren-buffett-berkshire-hathaway-sell-apple-stock/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"IE00BFSS7M15.SGD":"Janus Henderson Balanced A Acc SGD-H","BK4571":"数字音乐概念","LU0238689110.USD":"贝莱德环球动力股票基金","BK4585":"ETF&股票定投概念","BK4507":"流媒体概念","LU0234570918.USD":"高盛全球核心股票组合Acc Close","BK4576":"AR","LU0170899867.USD":"EASTSPRING INVESTMENTS WORLD VALUE EQUITY  \"A\" (USD) ACC","LU0456855351.SGD":"JPMorgan Funds - Global Equity A (acc) SGD","LU0289739343.SGD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"A\" (SGD) ACC","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","LU0072462426.USD":"贝莱德全球配置 A2","BK4575":"芯片概念","LU0082616367.USD":"摩根大通美国科技A（dist）","LU0056508442.USD":"贝莱德世界科技基金A2","LU0640476718.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQ \"AU\" (USD) ACC","LU0080751232.USD":"富达环球多元动力基金A","BK4527":"明星科技股","BK4501":"段永平概念","LU0308772762.SGD":"Blackrock Global Allocation A2 SGD-H","BK4579":"人工智能","BK4588":"碎股","IE00BSNM7G36.USD":"NEUBERGER BERMAN SYSTEMATIC GLOBAL SUSTAINABLE VALUE \"A\" (USD) ACC","LU0234572021.USD":"高盛美国核心股票组合Acc","LU0109392836.USD":"富兰克林科技股A","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC","BK4574":"无人驾驶","IE00BZ1G4Q59.USD":"LEGG MASON CLEARBRIDGE US EQUITY SUSTAINABILITY LEADER \"A\"(USD) INC (A)","LU0251142724.SGD":"Fidelity America A-SGD","BK4573":"虚拟现实","BK4505":"高瓴资本持仓","LU0130102774.USD":"Natixis Harris Associates US Equity RA USD","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","LU0353189763.USD":"ALLSPRING  US ALL CAP GROWTH FUND \"I\" (USD) ACC","BK4581":"高盛持仓","AAPL":"苹果","LU0320765059.SGD":"FTIF - Franklin US Opportunities A Acc SGD","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","LU0444971666.USD":"天利全球科技基金","IE00BLSP4239.USD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis USD Plus","IE00BFSS8Q28.SGD":"Janus Henderson Balanced A Inc SGD-H","BK4170":"电脑硬件、储存设备及电脑周边","BRK.B":"伯克希尔B","LU0417517546.SGD":"Allianz US Equity Cl AT Acc SGD","BRK.A":"伯克希尔","LU0742534661.SGD":"Fidelity America A-SGD (hedged)","IE00B7KXQ091.USD":"Janus Henderson Balanced A Inc USD","BK4592":"伊斯兰概念","IE00BLSP4452.SGD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis SGD-H Plus"},"source_url":"https://www.fool.com/investing/2024/02/18/warren-buffett-berkshire-hathaway-sell-apple-stock/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2412979089","content_text":"Berkshire acquired the vast majority of its Apple stake between 2016 and 2018.The decision to hold Apple stock indicates that Berkshire views it as a good value.Investors can depend on Apple’s capital return program even as organic growth has slowed.On Feb. 14, Berkshire Hathaway filed its 13F report for the period ended Dec. 31, 2023. There weren't too many sizable moves, but one noticeable one was that Berkshire sold around 10 million shares of Apple, trimming the position by a little over 1%.Let's discuss Berkshire's stake in Apple, what Berkshire's moves could indicate about its thoughts on the market, and what you should do if you own or want to buy the tech stock.Image source: Getty Images.Berkshire's evolving Apple positionBerkshire began acquiring Apple stock in 2016. By the end of 2018, Berkshire had racked up just shy of 1 billion shares. As of the end of 2023, Berkshire held 905.6 million shares.Apple has become Berkshire's largest holding because the buying spree between 2016 and 2018 proved to be a genius move. Apple stock is up 366.6% between the end of 2018 and Feb. 14. Berkshire sold 93.5 million shares in 2020. But aside from that, the position has remained relatively unchanged.Even after the fourth-quarter 2023 sale, Apple remains 45.5% of Berkshire's public equity portfolio, with Berkshire owning 5.9% of the company.What the move could signalI have two key takeaways from Berkshire's decision to keep its Apple position mostly unchanged between 2021 and 2023.The first is that Berkshire doesn't have better ideas than Apple. If it did, it could divert its enormous profits from Apple stock elsewhere. Effectively, Berkshire doesn't have a good enough alternative idea to justify selling Apple stock and suffering the associated tax consequences.The second takeaway is that Berkshire views Apple as a good value, not necessarily as a growth stock.Berkshire CEO Warren Buffett is a value investor at heart, and Berkshire's overall portfolio is incredibly value-oriented. The top five holdings in its public equity portfolio are Apple, Bank of America, American Express, Coca-Cola, and Chevron. Outside of its public equity portfolio, the most valuable assets Berkshire owns are its property and casualty insurance business, its 100% ownership of BNSF railroad, its 92% ownership of Berkshire Hathaway Energy, and several stakes or partial stakes in other companies.Berkshire isn't the kind of company to go out and ride the hot trend, like artificial intelligence (AI) today or the metaverse a few years ago. It's also not the kind of company to change its investment strategy.In its 2023 annual shareholder meeting from last May, Warren Buffett praised Apple, saying the following:Our criteria for Apple isn't different than the other businesses we own, it just happens to be a better business than any we own and we put a fair amount of money in it but we haven't got more money in it than we've got in the railroad. Our railroad is a very good business but it's not remotely as good as Apple's business.In other words, Apple doesn't get preferential treatment over other companies, it just continues to check all of the boxes. A couple of minutes later in the meeting, Buffett said: \"I made a mistake a couple years ago and I sold some shares.\" What he's referring to are the 93.5 million shares sold in the second half of 2020 that we discussed earlier. Buffett defended it by saying some tax-related factors made the move advisable, but he still seemed to regret it.So, if Buffett said that selling Apple was a mistake, you may wonder why Berkshire sold a little over 10 million shares in Q4 2023. Since it is a relatively small amount, my guess is that this may have been tax-related. We will hear more about Buffett's opinions on Apple during Berkshire's 2024 annual meeting on May 4. If I had to guess, the investment thesis on Apple hasn't changed.Apple's ace in the holeBerkshire is a big believer in the power of stock buybacks, but only if the business is good. This is why Berkshire famously doesn't pay a dividend, preferring instead to repurchase its own stock. Dividends are \"double taxed\" because they are paid with income that is taxed to the company and then taxed again when distributed to shareholders. Buybacks can be a better use of capital because they avoid this double taxing problem. They also reduce the outstanding share count of a company, which boosts earnings per share (EPS) and makes each existing share own a higher percentage of the company.Over the last 10 years, Berkshire has reduced its outstanding share count by 12.2%, whereas Apple has reduced its share count by 36%. Buybacks continue to be the main driver of Apple's capital return program. In its recent quarter, Apple spent $20.1 billion on buybacks and $3.8 billion on dividends.It's no secret that Apple's top- and bottom-line growth has slowed. The stock is also down 4.5% year to date, compared to a 5.5% gain in the S&P 500. Buybacks help boost EPS when organic growth is slow. Buffett and his team don't seem too concerned about Apple's current slowdown or its valuation. After all, there are aspects of the business that are thriving -- namely, the high-margin services segment, which just set a record for operating income and revenue.A foundational holdingBerkshire's decision to leave its Apple position mostly unchanged makes sense. The company isn't exhibiting the growth to make it a screaming buy. Unlike other big tech stocks, Apple has yet to make a meaningful splash with AI, namely because it doesn't have the business-to-business AI potential of a company like Nvidia or Microsoft.Apple is a well-run business that is missing out on the market rally for a good reason. There doesn't seem to be any real reason to pile into Apple stock now. However, if the broader market continues to become more expensive (and Apple languishes), it will begin to look like a better value. Apple is a stock worth putting on the top of a watchlist or buying a starter position in if you don't own any. The stock is out of favor on Wall Street right now compared to other big tech plays, but that could change quickly if fundamentals improve or the valuation comes down.","news_type":1},"isVote":1,"tweetType":1,"viewCount":113,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":263686319771760,"gmtCreate":1705412324370,"gmtModify":1705412329278,"author":{"id":"3581675959770023","authorId":"3581675959770023","name":"LaifaLee","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3581675959770023","authorIdStr":"3581675959770023"},"themes":[],"htmlText":"Share your opinion about this news…","listText":"Share your opinion about this news…","text":"Share your opinion about this news…","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/263686319771760","repostId":"2403413870","repostType":2,"repost":{"id":"2403413870","pubTimestamp":1705393800,"share":"https://ttm.financial/m/news/2403413870?lang=&edition=fundamental","pubTime":"2024-01-16 16:30","market":"us","language":"en","title":"Palantir Is Down, But Its FCF Could Make It Worth 21% More at $20 Per Share","url":"https://stock-news.laohu8.com/highlight/detail?id=2403413870","media":"Barchart","summary":"Palantir Technologies (PLTR) stock is off its peak of $21.26 per share to $16.76 as of morning trading on Monday, Jan. 15, 2024. But the intelligence software company's powerful free cash flow could p","content":"<html><head></head><body><p style=\"text-align: start;\"><strong>Palantir Technologies</strong> (<strong>PLTR</strong>) stock is off its peak of $21.26 per share to $16.76 as of morning trading on Monday, Jan. 15, 2024. But the intelligence software company&#39;s powerful free cash flow could push PLTR stock up over 21% to that peak. One way investors can play this is to short OTM puts.</p><p style=\"text-align: start;\">I discussed this in my last article on Dec. 4, 2023, “<strong>Palantir Still Has Room to Rise, and Could Be Worth Up to 20% More</strong>.” At the time the stock was $18.50 and we suggested shorting the $17.00 put options for expiration on Dec. 29. It closed at $17.17 so the investor would have had no obligation to buy more shares. </p><p style=\"text-align: start;\">It might make sense to short out-of-the-money (OTM) puts again. But first, let&#39;s review why PLTR stock could be worth up to 21% more.</p><h3 id=\"id_834349817\" style=\"text-align: start;\">Free Cash Flow Powerhouse</h3><p style=\"text-align: start;\">Palantir produced adjusted free cash flow (FCF) of $141 million in Q3. That represented a 25% margin on its quarterly revenue of $558 million, which was up 17% YoY. We can use that to project its ongoing free cash flow.</p><p>For example, analysts surveyed by Seeking Alpha forecast 2024 revenue of $2.66 billion. So, if we apply a 25% margin to this forecast we can project $665 million for 2024. </p><p style=\"text-align: start;\">That is useful because if we assume the market will use a 1.5% FCF metric, its market cap will rise to $44.33 billion. Here is how that works. </p><p style=\"text-align: start;\">If we assume that the company were to pay out all FCF as a dividend the market would give the stock a 1.5% dividend yield. So, $665 million divided by 1.5% gives us a market cap of $44.33 billion.</p><p style=\"text-align: start;\">That is 21.6% higher than its market cap of $36.47 billion. In other words, PLTR stock is worth 21.6% more than its price on Friday, Jan 12 ($16.76), or $20.38 per share.</p><h3 id=\"id_3485685456\" style=\"text-align: start;\">Shorting OTM Puts For Income</h3><p style=\"text-align: start;\">The problem is Palantir still does not pay a dividend out of its free cash flow. So, shareholders can create pseudo income while they wait for the stock to hit its target price.</p><p style=\"text-align: start;\">One way to do this is to short out-of-the-money (OTM) puts in near-term expiry periods. That means selling puts at strike prices below the spot price. This is because the short sale process involves a potential purchase of the stock at the OTM strike price. </p><p style=\"text-align: start;\">This way shareholders can create income without having to worry that their shares will be called out or exercised. The only potential obligation will be to buy more stock at the OTM strike price.</p><p style=\"text-align: start;\">For example, look at the Feb. 2, 2024, options expiration period, which is three weeks away, and likely close to when the company will release its Q4 results. It shows that the $15.50 strike price puts, which is 7.5% below today&#39;s price, trade for 24 cents.</p><p style=\"text-align: start;\">That means that the short put investor can make an immediate 1.55% yield (i.e., $0.24/$15.50) selling puts at this strike price.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/3ee4b5d5747f4018a64fe49d712ffcd0\" alt=\"PLTR Puts expiring Feb 2, 2024 - Barchart - As of Jan 12, 2024\" title=\"PLTR Puts expiring Feb 2, 2024 - Barchart - As of Jan 12, 2024\" tg-width=\"975\" tg-height=\"443\"/><span>PLTR Puts expiring Feb 2, 2024 - Barchart - As of Jan 12, 2024</span></p><p style=\"text-align: start;\">Here is how that works. An investor in PLTR stock can short these puts by first securing $1,550 in cash and/or margin with their brokerage firm. That allows the account to potentially buy 100 shares at $15.50 should the stock fall to that price and the put contract is exercised (since one put equals 100 shares).</p><p style=\"text-align: start;\">Then the investor enters an order to “Sell to Open” 1 put contract at the $15.50 strike price for expiration on Feb. 2. That means that the investor&#39;s account will immediately receive $24 (i.e., $0.24 x 100 shares per contract). </p><p style=\"text-align: start;\">So, for example, if the investor sold short 10 contracts their account would receive $240.00, although they would have had to secure $15,500 with their brokerage firm. As a result, the $240 received represents 1.548% of the $15,500 invested in this play.</p><p style=\"text-align: start;\">Moreover, if the investor can repeat this trade every 3 weeks for a year, the expected return (ER) is $4,080. That is because there are 17 periods of 3 weeks in a year (i.e., $240 x 17 = $4,080). The ER is therefore 26.3% on an annualized basis, although this assumes that there would be no obligation to buy the stock at any point.</p><p style=\"text-align: start;\">The bottom line is that PLTR stock is worth considerably more at today&#39;s price. If its Q4 free cash flow comes in as powerful as it did during Q3, investors could potentially see the stock rise back to its peak price. One way to play this while waiting is to short OTM puts in nearby expiration periods, such as we described above.</p></body></html>","source":"barchart_highlight","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Palantir Is Down, But Its FCF Could Make It Worth 21% More at $20 Per Share</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nPalantir Is Down, But Its FCF Could Make It Worth 21% More at $20 Per Share\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-01-16 16:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.barchart.com/story/news/23344973/palantir-is-down-but-its-fcf-could-make-it-worth-21-more-at-20-per-share><strong>Barchart</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Palantir Technologies (PLTR) stock is off its peak of $21.26 per share to $16.76 as of morning trading on Monday, Jan. 15, 2024. But the intelligence software company's powerful free cash flow could ...</p>\n\n<a href=\"https://www.barchart.com/story/news/23344973/palantir-is-down-but-its-fcf-could-make-it-worth-21-more-at-20-per-share\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BK4211":"区域性银行","PLTR":"Palantir Technologies Inc.","BK4543":"AI","BK4585":"ETF&股票定投概念","BK4547":"WSB热门概念","BK4588":"碎股","BK4023":"应用软件"},"source_url":"https://www.barchart.com/story/news/23344973/palantir-is-down-but-its-fcf-could-make-it-worth-21-more-at-20-per-share","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2403413870","content_text":"Palantir Technologies (PLTR) stock is off its peak of $21.26 per share to $16.76 as of morning trading on Monday, Jan. 15, 2024. But the intelligence software company's powerful free cash flow could push PLTR stock up over 21% to that peak. One way investors can play this is to short OTM puts.I discussed this in my last article on Dec. 4, 2023, “Palantir Still Has Room to Rise, and Could Be Worth Up to 20% More.” At the time the stock was $18.50 and we suggested shorting the $17.00 put options for expiration on Dec. 29. It closed at $17.17 so the investor would have had no obligation to buy more shares. It might make sense to short out-of-the-money (OTM) puts again. But first, let's review why PLTR stock could be worth up to 21% more.Free Cash Flow PowerhousePalantir produced adjusted free cash flow (FCF) of $141 million in Q3. That represented a 25% margin on its quarterly revenue of $558 million, which was up 17% YoY. We can use that to project its ongoing free cash flow.For example, analysts surveyed by Seeking Alpha forecast 2024 revenue of $2.66 billion. So, if we apply a 25% margin to this forecast we can project $665 million for 2024. That is useful because if we assume the market will use a 1.5% FCF metric, its market cap will rise to $44.33 billion. Here is how that works. If we assume that the company were to pay out all FCF as a dividend the market would give the stock a 1.5% dividend yield. So, $665 million divided by 1.5% gives us a market cap of $44.33 billion.That is 21.6% higher than its market cap of $36.47 billion. In other words, PLTR stock is worth 21.6% more than its price on Friday, Jan 12 ($16.76), or $20.38 per share.Shorting OTM Puts For IncomeThe problem is Palantir still does not pay a dividend out of its free cash flow. So, shareholders can create pseudo income while they wait for the stock to hit its target price.One way to do this is to short out-of-the-money (OTM) puts in near-term expiry periods. That means selling puts at strike prices below the spot price. This is because the short sale process involves a potential purchase of the stock at the OTM strike price. This way shareholders can create income without having to worry that their shares will be called out or exercised. The only potential obligation will be to buy more stock at the OTM strike price.For example, look at the Feb. 2, 2024, options expiration period, which is three weeks away, and likely close to when the company will release its Q4 results. It shows that the $15.50 strike price puts, which is 7.5% below today's price, trade for 24 cents.That means that the short put investor can make an immediate 1.55% yield (i.e., $0.24/$15.50) selling puts at this strike price.PLTR Puts expiring Feb 2, 2024 - Barchart - As of Jan 12, 2024Here is how that works. An investor in PLTR stock can short these puts by first securing $1,550 in cash and/or margin with their brokerage firm. That allows the account to potentially buy 100 shares at $15.50 should the stock fall to that price and the put contract is exercised (since one put equals 100 shares).Then the investor enters an order to “Sell to Open” 1 put contract at the $15.50 strike price for expiration on Feb. 2. That means that the investor's account will immediately receive $24 (i.e., $0.24 x 100 shares per contract). So, for example, if the investor sold short 10 contracts their account would receive $240.00, although they would have had to secure $15,500 with their brokerage firm. As a result, the $240 received represents 1.548% of the $15,500 invested in this play.Moreover, if the investor can repeat this trade every 3 weeks for a year, the expected return (ER) is $4,080. That is because there are 17 periods of 3 weeks in a year (i.e., $240 x 17 = $4,080). The ER is therefore 26.3% on an annualized basis, although this assumes that there would be no obligation to buy the stock at any point.The bottom line is that PLTR stock is worth considerably more at today's price. If its Q4 free cash flow comes in as powerful as it did during Q3, investors could potentially see the stock rise back to its peak price. One way to play this while waiting is to short OTM puts in nearby expiration periods, such as we described above.","news_type":1},"isVote":1,"tweetType":1,"viewCount":26,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":244962409058400,"gmtCreate":1700829380842,"gmtModify":1700833393669,"author":{"id":"3581675959770023","authorId":"3581675959770023","name":"LaifaLee","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3581675959770023","authorIdStr":"3581675959770023"},"themes":[],"htmlText":"Great ariticle, would you like to share it?","listText":"Great ariticle, would you like to share it?","text":"Great ariticle, would you like to share it?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/244962409058400","repostId":"1162662325","repostType":2,"isVote":1,"tweetType":1,"viewCount":114,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9062986913,"gmtCreate":1651987418032,"gmtModify":1676535009894,"author":{"id":"3581675959770023","authorId":"3581675959770023","name":"LaifaLee","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3581675959770023","authorIdStr":"3581675959770023"},"themes":[],"htmlText":"Interesting!👍","listText":"Interesting!👍","text":"Interesting!👍","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9062986913","repostId":"1131831539","repostType":4,"repost":{"id":"1131831539","pubTimestamp":1651980653,"share":"https://ttm.financial/m/news/1131831539?lang=&edition=fundamental","pubTime":"2022-05-08 11:30","market":"us","language":"en","title":"Tesla: Overvalued By 85.26% And Not A Technology Company","url":"https://stock-news.laohu8.com/highlight/detail?id=1131831539","media":"Seeking Alpha","summary":"SummaryMake no mistake, Tesla is a phenomenal company that has accomplished the unthinkable as it broke through extreme barriers of entry to disrupt the auto industry.Just because Tesla is a successfu","content":"<html><head></head><body><p>Summary</p><ul><li>Make no mistake, Tesla is a phenomenal company that has accomplished the unthinkable as it broke through extreme barriers of entry to disrupt the auto industry.</li><li>Just because Tesla is a successful company that is causing automotive titans to change from combustible engines to EVs doesn&#39;t mean Tesla&#39;s stock is a good investment today.</li><li>100% of gross profit and net income is generated from the automotive sector as Tesla&#39;s other businesses lose money, making them an automobile manufacturing company, not a technology company.</li><li>I compared Tesla&#39;s metrics to the auto industry and big tech and the results are the same, Tesla&#39;s valuation is egregious.</li></ul><p>It&#39;s rare to find companies that have cult-like followings with loyalists willing to pay any price for its stock. The debate regarding Tesla, Inc.&#39;s (NASDAQ:TSLA) valuation continues to be a topic of conversation between the bulls and the bears. Oneside argues that TSLA&#39;s financial growth and future prospects, including FSD, insurance, and robotaxis, justify the current $902.12 billion valuations, while others argue that the current financials and cult-like following have led to a massive overvaluation in TSLA&#39;s stock.</p><p>I tip my hat to Elon Musk, as his accomplishments are second to none. When others called him crazy, Mr. Musk chose one of the hardest industries to compete in, started TSLA from the ground up, went to battle against the auto manufacturers, and succeeded. TSLA is one of the rare success stories that has truly shaped an industry, and the barriers of entry that were overcome are astonishing. TSLA didn&#39;t have the capital, manufacturing, credibility, or the infrastructure that its competitors did, yet they found a way to succeed. If the odds weren&#39;t enough which TSLA faced, they accomplished their goals without a combustible engine and pioneered an entirely new sector within the automotive industry.</p><p>Just because TSLA is a great company, it doesn&#39;t mean TSLA has a great stock, or it isn&#39;t overvalued. I am not bearish on TSLA the company because I believe they still have a long runway of growth ahead of them, but I am bearish on the valuation. Prior to leaving a comment on why I am wrong, please read the article and think about the metrics I am citing; then, I will happily discuss any viewpoints about the analysis.</p><p><b>Tesla Vs. The World In The Automotive Sector</b></p><p>It feels like TSLA vs. the world whenever TSLA is discussed. Discussing who makes a better automobile is a matter of opinion, and everyone is correct because it&#39;s their opinion. If person A thinks TSLA makes the best car and person B thinks Mercedes Benz makes the best car, they are both correct. Debating over this is pointless, so let&#39;s look at the raw numbers.</p><p>TSLA has a larger market cap than the combination ofToyota(TM),Volkswagen(OTCPK:VWAGY),Daimler(OTCPK:DDAIF),BMW(OTCPK:BMWYY),General Motors(GM),Ford(F),Honda(HMC),Ferrari(RACE),Nissan(OTCPK:NSANY),Subaru(OTCPK:FUJHY),Volvo(OTCPK:VOLAF), andMazda(OTCPK:MZDAY). TSLA&#39;s market cap is currently $986.92 billion, while the combination of these 12 companies is $777.41 billion.</p><p><img src=\"https://static.tigerbbs.com/ff930d2442bf282c1bd880cca408eb94\" tg-width=\"640\" tg-height=\"327\" referrerpolicy=\"no-referrer\"/></p><p>Steven Fiorillo</p><p>The P/S ratio is often cited to justify the valuation. The combination of TM, VWAGY, DDAIF, BMWYY, GM, F, HMC, RACE, NSANY, FUJHY, VOLAF, and MZDAY has generated $1.38 trillion in revenue over the TTM, putting their P/S at 0.56, while TSLA has generated $62.19 billion in revenue and has a 15.87 P/S.</p><p><img src=\"https://static.tigerbbs.com/c9b9661fde232925a758c38fd2e93f36\" tg-width=\"640\" tg-height=\"330\" referrerpolicy=\"no-referrer\"/></p><p>Steven Fiorillo, Seeking Alpha</p><p>As a combined entity, these 12 companies have generated $118.29 billion in net income, while TSLA has produced $8.4 billion.</p><p><img src=\"https://static.tigerbbs.com/d25806eb839eb9ca2b4ef3c24218048c\" tg-width=\"640\" tg-height=\"330\" referrerpolicy=\"no-referrer\"/></p><p>Steven Fiorillo, Seeking Alpha</p><p>TSLA is a great company, but its current valuation has become overly inflated. TSLA&#39;s market cap is $209.52 billion larger than these 12 auto manufacturers, yet the combination of the 12 auto manufacturers generates $1.32 trillion more in revenue and $109.89 billion more in net income.</p><p><img src=\"https://static.tigerbbs.com/a1b686de4009ca733ff9651ce0d9fcaf\" tg-width=\"640\" tg-height=\"348\" referrerpolicy=\"no-referrer\"/></p><p>Steven Fiorillo, Seeking Alpha</p><p>Looking at the market caps, one would assume that TSLA has a dominant majority over its competitors in auto sales within the U.S. According to the2021 data, TSLA sold 2.02% of all vehicles in the U.S. TSLA&#39;s market cap reflects a level of dominance that is non-existent.</p><p>Realistically, TSLA will have a hard time disrupting the sector further due to the price point of their vehicles. The reality is that, unless TSLA can sell a car that rivals a Honda or Toyota, doubling its market share is going to be a daunting task. It&#39;s just math. TSLA doesn&#39;t have a product for the masses, and while it may continue to grow in the luxury segment, the amount of growth that can be achieved is limited due to the pricing power of the consumer.</p><p><img src=\"https://static.tigerbbs.com/442ffe151dd83bc524785857925f9797\" tg-width=\"640\" tg-height=\"227\" referrerpolicy=\"no-referrer\"/></p><p>www.goodcarbadcar.net</p><p><b>Tesla Isn&#39;t A Technology Company And Shouldn&#39;t Be Valued As One</b></p><p>The valuation rebuttal has always been that TSLA isn&#39;t an automobile company, rather, it&#39;s a technology company.</p><p><img src=\"https://static.tigerbbs.com/bbc9ccb2cb8a0e7d40804db24e183214\" tg-width=\"640\" tg-height=\"341\" referrerpolicy=\"no-referrer\"/></p><p>Tesla</p><p>Page 23 ofTSLA&#39;s Q1 2022 slide deck from their earnings call is their statement of operations. Once again, 100% of TSLA&#39;s gross profit and net income are derived from automobiles. Energy generation and storage lose money as it generates $616 million in revenue while the cost of this revenue is $688 million. The same goes for Services and others, as this segment generates $1.279 billion in revenue while the cost of this revenue is $1.286 billion. This doesn&#39;t even factor in operating expenses.</p><p>TSLA manufacturers state of the art automobiles, but this doesn&#39;t classify them as a technology company, nor should they be classified as one. Since this is always the rebuttal and technology companies trade at larger earnings multiples, I will compare TSLA to Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOG) (GOOGL), and Meta Platforms (FB) and illustrate why TSLA is still drastically overvalued if the market was still to provide it with a tech multiple.</p><p>Prior to the comparisons, I want to frame the analysis by providing each company&#39;s market cap:</p><ul><li>AAPL $2.69 Trillion</li><li>MSFT $2.17 Trillion</li><li>GOOGL $1.62 Trillion</li><li>AMZN $1.28 Trillion</li><li>TSLA $986.92 Billion</li><li>FB $604.62 Billion</li></ul><p>I am going to start with growth because this is always the key metric bulls point out. Since the close of 2018, which is 3.25 fiscal years, TSLA has grown its revenue from $21.46 billion to $62.19 billion.</p><p>This is absolutely remarkable, but it doesn&#39;t place TSLA in the upper epsilon of technology companies. Over the same period, FB grew its revenue by $63.83 billion, which is more than what TSLA produced in the TTM. FB grew its revenue by more than what TSLA produces and generates just about double the revenue ($119.67 billion), yet TSLA has a larger market cap. For everyone who has used growth as their investment premise, FB having a market cap that&#39;s $382.30 less than TSLA nullifies that aspect of the bull thesis. AMZN&#39;s market cap is only $294.33 billion larger than TSLA, yet they generated $477.75 billion in revenue and grew their revenue by $341.76 billion in this period. Using revenue growth for TSLA doesn&#39;t support the valuation.</p><p><img src=\"https://static.tigerbbs.com/3c0fbd4eb93f026c4575ee8f77f53e4b\" tg-width=\"640\" tg-height=\"396\" referrerpolicy=\"no-referrer\"/></p><p>Steven Fiorillo, Seeking Alpha</p><p>Next, I will turn to profits because, at the end of the day, businesses are in the business of making money. Once again, TSLA has done a fantastic job of monetizing its business and, in 3.25 short years, has gone from losing -$976 million to make $8.4 billion in the TTM for an increase of $9.38 billion. FB has produced $37.34 billion in profit in the TTM, and its net income grew by $15.23 billion over this period. Using growth doesn&#39;t support the valuation when FB has a market cap that&#39;s $382.30 less than TSLA and grew its profits in this period by almost double what TSLA has generated in the TTM.</p><p><img src=\"https://static.tigerbbs.com/c9716477607711ee0b6d4f77eb24c890\" tg-width=\"640\" tg-height=\"382\" referrerpolicy=\"no-referrer\"/></p><p>Steven Fiorillo, Seeking Alpha</p><p>The new metric bulls are using in their thesis is TSLA&#39;s free cash flow (FCF). Once again, TSLA has done an excellent job, going from -$221 million of FCF in 2018 to $6.93 billion of FCF in the TTM. Many companies would love to grow their annual FCF by $7.15 billion over a 3.25-year period, and this should be applauded.</p><p>Let&#39;s look at FB once again, since TSLA&#39;s valuation isn&#39;t based on its core segment as an automobile manufacturer. FB has grown its FCF over the previous 3.25 years by $23.45 billion, more than 3x TSLA&#39;s growth, and has generated $39.81 billion of FCF in the TTM. FB generated roughly 5.75x more FCF than TSLA and grew its FCF by more than 3x what TSLA produces, yet FB has a market cap that&#39;s almost $400 billion less than TSLA. Growth within the financials does not support TSLA&#39;s valuation, which is a breath away from $1 trillion.</p><p><img src=\"https://static.tigerbbs.com/902a7074eda9e8f2f2765e0833423d2c\" tg-width=\"640\" tg-height=\"373\" referrerpolicy=\"no-referrer\"/></p><p>Steven Fiorillo, Seeking Alpha</p><p>Today you&#39;re paying a 113.81 P/E for TSLA. Paying a larger multiple for a company that&#39;s growing its earnings quickly is normal, but TSLA isn&#39;t growing by larger amounts than FB, and FB trades at a 16.66 P/E. I have seen TSLA bulls justify the P/E because of TSLA&#39;s growth factor, but this doesn&#39;t hold up when FB has grown by larger amounts from larger starting positions and has a P/E that&#39;s a fraction of TSLA. Look at AAPL, which is the largest company in the world. AAPL has grown its net income by $56.25 billion and its FCF by $52.3 billion over the past 3.25 years, and its P/E is 26.78. People are blindly paying any multiple the market places on TSLA.</p><p><img src=\"https://static.tigerbbs.com/75168f6e39ced721cf0c53d78481a983\" tg-width=\"614\" tg-height=\"335\" referrerpolicy=\"no-referrer\"/>TSLA is trading at a 15.38 P/S. The justification for this multiple is difficult to defend while AMZN trades at a P/S of 11.31. AMZN&#39;s revenue grew by $341.76 billion over the past 3.25 years while TSLA grew their revenue by $40.73 billion. Instead of an absolute basis, looking at this from a percentage aspect, TSLA grew its revenue by 189.78%, while AMZN&#39;s grew by 251.32%. The P/S ratio is not a supporting valuation metric as TSLA is trading at a larger multiple than AMZN yet produced $301.03 billion less in revenue growth compared to AMZN. At the very least, TSLA should trade at a lower P/S multiple than AMZN considering their revenue growth was a fraction of AMZN&#39;s.</p><p><img src=\"https://static.tigerbbs.com/aad00a6c490808962705a1a2dae45cfe\" tg-width=\"608\" tg-height=\"338\" referrerpolicy=\"no-referrer\"/>TSLA has done an excellent job monetizing its revenue, delivering exceptional margins, and generating FCF. Now that TSLA is generating billions in FCF, it&#39;s been inserted into the bull thesis. FCF is a measure of profitability that excludes the non-cash expenses of the income statement and includes spending on equipment and assets as well as changes in working capital from the balance sheet. FCF could be the most underrated and most important financial metric to look at, as this is the pool of capital that companies can utilize to repay debt, pay dividends, buy back shares, make acquisitions, or reinvest in the business.</p><p>Every investment is the present value of all future cash flow. This is why investors look at the price to FCF valuation. Investors want to pay the cheapest multiple for a company&#39;s FCF. Today, you&#39;re paying 142.52x TSLA&#39;s FCF. Going back to the FCF section, TSLA grew its FCF by $7.15 billion over the past 3.25 years. FB generated $23.45 billion of FCF in this period, which is 3x the amount TSLA grew, yet FB is trading at a 15.19x multiple on price to FCF.</p><p>Why on earth would you want to pay 142.52x for TSLA&#39;s FCF when you could pay 15.19x for FB, which is growing their FCF by more than 3x the amount that TSLA is growing by? How about AAPL? AAPL grew its FCF by $52.3 billion and trades at a 25.4x price to FCF. If I exclude FB for a moment, should TSLA trade at a larger FCF multiple than GOOGL, which has grown its FCF by $46.15 billion over the past 3.25 years? My answer is no because there is no guarantee that TSLA will ever generate $46.15 billion in annual FCF, let alone the $68.99 billion in FCF that GOOGL generates.</p><p>So what is a fair price to FCF multiple for TSLA? I don&#39;t believe TSLA has earned the right to trade at the same multiples as the rest of big tech considering the levels of FCF they produce. If I stick with the methodology that FB is egregiously undervalued, then TSLA should trade above 15.19x its FCF but lower than the 23.42x multiple GOOGL trades at.</p><p>I don&#39;t want to be overly bearish, so I will place a 21x multiple on TSLA&#39;s FCF, which is more than fair considering big tech metrics. A 21x multiple on TSLA&#39;s FCF puts its market cap at $145.43 billion, which is -85.26% from its current market cap of $986.92 billion. It&#39;s just math, and if TSLA is going to be valued as a technology company, it needs to be compared to the technology companies with similar market caps.</p><p>At the very least, there isn&#39;t a single reason why TSLA&#39;s market cap is larger than FB&#39;s. There isn&#39;t a single metric that TSLA beats FB in. Based on FB&#39;s valuation, if TSLA traded at the same FCF multiple, it would have a market cap of $105.19 billion.</p><p><img src=\"https://static.tigerbbs.com/b81a61d60d9ec098276569cc4a501da0\" tg-width=\"627\" tg-height=\"341\" referrerpolicy=\"no-referrer\"/>TSLA has a gross profit margin of 27.1% ($16.85b / $62.19b) and a profit margin of 13.51% ($8.4b / $62.19b). FB has a gross profit margin of 80.34% ($96.14b / $119.67b) and a profit margin of 31.2% ($37.34b / $119.67b). FB has much wider margins and is growing its revenue by larger amounts. This reinforces my methodology as to why TSLA is grossly overvalued. GOOGL has a gross profit margin of 56.93% ($153.9b / $270.33b) and a profit margin of 27.57% ($74.54b / $270.33b).</p><p>The chances are incredibly slim that TSLA can double its profit margin to be within striking distance of GOOGL&#39;s. TSLA should not trade at a larger FCF, P/E, or P/S multiple than FB or GOOGL. While the market would indicate that I am wrong today, eventually, the hype will wear off, and TSLA will trade at a realistic valuation.</p><p><b>TSLA&#39;s Future Catalysts Have A Long Way To Go Before Impacting Its Bottom Line</b></p><p>There are three main catalysts people discuss, which include insurance, robotaxis, and FSD.TSLA offers insurance using real-time driving behavior. This is currently available to all Model S, Model 3, Model X, and Model Y owners. The catch is that it&#39;s only available in Arizona, Colorado, Illinois, Ohio, Oregon, Texas, and Virginia as of now.</p><p>TSLA uses a safety rating score to determine the monthly premium for its vehicles. At the largest premium of $130/mo, this would be $1,560 per year. If TSLA converted 100% of their U.S sales in 2021 as an insurance customer, which I think could be possible if TSLA insurance was available in every state, it would have generated $471.12 million in revenue.</p><p>We have no idea what the margins would have been, but if the margin was 50%, it would have been an additional $235.56 million in net income in 2021. While this is nothing to sneeze at, an additional $235.56 million in net income hardly moves the needle. This could be a $1 billion top-line revenue segment in the future, but with availability in only 7 states, insurance&#39;s $1 billion revenue mark is a long way away.</p><p><img src=\"https://static.tigerbbs.com/e86de6232b9abf7cee46a9607eb09741\" tg-width=\"640\" tg-height=\"326\" referrerpolicy=\"no-referrer\"/></p><p>Tesla</p><p>Next,FSD, for which TSLA has created two subscription models, a $99/mo price point and a $199/mo price point. The problem with FSD is that it doesn&#39;t make the vehicle fully autonomous, and you still need a driver to be attentive and alert. While I am not arguing that TSLA&#39;s FSD isn&#39;t leaps and bounds ahead of the competition, the problem is that it&#39;s not exactly a self-driving car.</p><p>The questions around legality and where you can use it pop into my head, and how many of TSLA&#39;s drivers opt for this upgrade. Until there is clear legislation and the technology advances to where vehicles can fully drive a person from point A to B while that person takes a nap or reads, I have a hard time believing enough TSLA owners will spend the extra $199/mo on FSD. If there is somewhere where TSLA produces the numbers about how many owners opt for this package, please let me know, and I will crunch the numbers.</p><p>Which Features Come With My Subscription?</p><blockquote>The FSD capability features you receive are based on your configuration and location. Not all features are available in all markets, and features are subject to change.Learn more about Autopilot and Full Self-Driving capability features.</blockquote><blockquote><i>Note: These features are designed to become more capable over time; however the currently enabled features do not make the vehicle autonomous. The currently enabled features require a fully attentive driver, who has their hands on the wheel and is prepared to take over at any moment.</i></blockquote><p>The last catalyst is Robotaxis which many have commented on in my articles before. We&#39;re so far off on Robotaxis that this can&#39;t be considered in TSLA&#39;s upcoming revenue. I would think major legislation would be needed for Robotaxis to exist, and there is no telling how many years away we are from this.</p><p>Also, what is the percentage of TSLA owners that would actually allow their vehicle to be used as a Robotaxi? Depending on what the profitability is, I can see people buying TSLAs to enroll them in this program, but, once again, we need to see the economics behind it. I know I am just one opinion, but I would never enroll one of my cars into a robotaxi program because I don&#39;t want other people that I don&#39;t know in my car. I would think there are many others that have similar viewpoints.</p><p>The real upcoming catalysts are future revenue growth and entering the Chinese market. In 2021 TSLA grew its YoY revenue by 70.67%, and their off to a great start after Q1 2022. Only time will tell what type of growth rate TSLA can maintain, but too many people are assuming that TSLA will obliterate the competition. Over the next several years, we could see TSLA&#39;s growth rate become significantly reduced as more luxury operators put EVs on the road.</p><p>At TSLA&#39;s current margins, they would need to increase their revenue by 444.55% to $276.47 billion to produce the same amount of net income ($37.34b) that FB produces today at their current 13.51% profit margin. Maybe TSLA can get there in the future, but why should TSLA be valued at almost $1 trillion today, considering not a single metric of theirs is similar to FB or GOOGL, and TSLA&#39;s growth across any of the sectors isn&#39;t larger than FB or GOOGL?</p><p><b>Tesla Continues To Dilute Shareholders, And Almost No Shareholders Care</b></p><p>Dilution kills shareholder value. Look, I am a shareholder of TSLA, and I hate that my shares continue to be diluted. These numbers are split-adjusted that I am using. Over the past decade,TSLA has diluted its shares by 80.93%. This is horrible compared to big tech, yet investors can&#39;t buy enough TSLA shares. TSLA finished 2012 with 572.6 million shares and, as of its last filing, had increased its outstanding shares to 1.036 billion shares.</p><p>This is the equivalent of me taking a pizza, and instead of giving you a slice, cutting another 6.5 slices, then giving you one. The pizza represents TSLA, the company, and they basically turned an 8-slice pie into a 14.5-slice pie, reducing shareholder&#39;s ownership and the amount of equity, revenue, and EPS our shares represent.</p><p>If you want to see what a true shepherd of shareholder value looks like, turn to AAPL. In 2012 AAPL had 26.3 billion shares outstanding. Over the past decade, AAPL has repurchased 10.09 billion shares, reducing its outstanding shares by 38.37%. Every quarter, AAPL is buying back shares and increasing the ownership its shares represent. TSLA, on the other hand, continues to dilute shareholders by increasing shares YOY.</p><p><b>I Could Be Completely Wrong, And Tesla Could Continue Growing At These Rates</b></p><p>TSLA&#39;s vehicle deliveries continue to outpace its growing production. YoY TSLA&#39;s deliveries increased by 68% in Q1, adding 125,171 delivered vehicles to its customers. TSLA just began Model Y deliveries from the Austin facility, and production at the Gigafactory in Berlin started in March of 2022. TSLA&#39;s Shanghai facility had strong production rates prior to the spike in COVID that resulted in temporary shutdowns. TSLA isn&#39;t just focusing on the U.S, they have Europe and China in their sights.</p><p>EVs accounted for 488,000 sales in the U.S for 2021, and the previous projection was that EVs would account for 670,000 units sold in 2022. Oil has hovered around $100 per barrel and could render the previous projections of 37% increased EV sales domestically for 2022 conservative. TSLA is in a prime position to capitalize on this trend. In 2021 TSLA vehicles accounted for 61.89% of EVs sold in the U.S (301,998 / 488,000).</p><p>Hypothetically, if the previous projection of 670,000 EV sales for 2022 is accurate and TSLA maintains its current margin, they would sell 414,628 vehicles throughout the U.S in 2022. If gas prices do alter the decision-making process when deciding between a combustible engine or an EV, then TSLA could continue surprising the market with QoQ earnings beats.</p><p>The U.S has a national goal of reaching 50% of domestic auto sales coming from EVs. In 2021, EVs accounted for 3.26% of total sales in the U.S auto market. Based on U.S auto sales in 2021, annual EV sales would need to grow by 6,989,403 to reach a 50% EV to combustible engine ratio. Hypothetically if U.S auto sales stayed flat but EVs reached 50% of the market in 2030 they would sell 7,477,403 vehicles. If TSLA&#39;s dominance in the EV sector was to drop from 61.89% to 15% due to increased competition, they would generate 1,121,610 in sales compared to 301,998 in 2021. When you add in Europe and China, TSLA certainly has the ability to become a top auto manufacturer by sales next decade.</p><p>Bulls aren&#39;t incorrect to be excited about TSLA. The world is moving toward EVs, and TSLA is the crème de la crème. As I said in the beginning, I am bullish about TSLA&#39;s future prospects, but I think the valuation today is overinflated. Nobody can predict the future, but I have no doubt that TSLA will continue to grow its sales YoY.</p><p>The question becomes, how much growth will they be able to achieve YoY? In 2021, TM generated $226.48 billion of revenue and, based on the future of EVs, TSLA certainly could achieve this level of revenue in the future. Based on TSLA&#39;s current 13.51% profit margin, if they achieved TM&#39;s level of revenue, they would generate $30.59 billion of net income, which would definitely make today&#39;s valuation look more realistic.</p><p><img src=\"https://static.tigerbbs.com/93c9176fa9bebc2c940e038cafd23229\" tg-width=\"603\" tg-height=\"631\" referrerpolicy=\"no-referrer\"/></p><p>Tesla</p><p><b>Conclusion</b></p><p>You&#39;re probably wondering how I can be a shareholder and be a bear on TSLA&#39;s valuation at the same time. It&#39;s simple; my wife bought shares of TSLA, which makes me a shareholder. My stance has always been bullish on the company and bearish on the valuation. What Elon Musk and the team at TSLA has accomplished is astonishing, and they deserve nothing but respect.</p><p>Keep in mind a company and a company&#39;s stock are two separate things. TSLA continues to dilute shareholders, and they and the market are valuing TSLA as if it&#39;s FB or GOOGL. TSLA is not a technology company; it&#39;s an automobile company, as the automotive segments drive 100% of its gross revenue and net income.</p><p>TSLA is trading at a P/E of 113.81, a P/S of 15.38, and a 142.52x multiple on its FCF. The numbers are drastically inflated as TSLA has no business trading at a larger P/S multiple than AMZN, which trades at 11.31 P/S when it has grown its revenue by $341.76 billion over the previous 3.25 years compared to TSLA&#39;s $40.73 billion of revenue growth. TSLA has generated $6.93 billion in FCF over the TTM, while Mr. Market has placed a 142.52x multiple on TSLA due to $7.15 billion FCF growth over the past 3.25 years. FB trades at a 15.19x FCF multiple while growing FCF by $23.45 billion over this period which is more than 3x what TSLA has generated in the TTM.</p><p>With FB trading at 15.19x FCF, GOOGL at 23.42x FCF, and AAPL at 25.4x FCF, it&#39;s hard to justify any number above 20x for TSLA. I think a 21x FCF multiple is generous and that places TSLA at a market cap of $145.43 billion, which is -85.26% from its current market cap of $986.92 billion.</p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Tesla: Overvalued By 85.26% And Not A Technology Company</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nTesla: Overvalued By 85.26% And Not A Technology Company\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-05-08 11:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4507535-tesla-overvalued-by-85-26-percent-and-not-a-technology-company><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryMake no mistake, Tesla is a phenomenal company that has accomplished the unthinkable as it broke through extreme barriers of entry to disrupt the auto industry.Just because Tesla is a ...</p>\n\n<a href=\"https://seekingalpha.com/article/4507535-tesla-overvalued-by-85-26-percent-and-not-a-technology-company\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"TSLA":"特斯拉"},"source_url":"https://seekingalpha.com/article/4507535-tesla-overvalued-by-85-26-percent-and-not-a-technology-company","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1131831539","content_text":"SummaryMake no mistake, Tesla is a phenomenal company that has accomplished the unthinkable as it broke through extreme barriers of entry to disrupt the auto industry.Just because Tesla is a successful company that is causing automotive titans to change from combustible engines to EVs doesn't mean Tesla's stock is a good investment today.100% of gross profit and net income is generated from the automotive sector as Tesla's other businesses lose money, making them an automobile manufacturing company, not a technology company.I compared Tesla's metrics to the auto industry and big tech and the results are the same, Tesla's valuation is egregious.It's rare to find companies that have cult-like followings with loyalists willing to pay any price for its stock. The debate regarding Tesla, Inc.'s (NASDAQ:TSLA) valuation continues to be a topic of conversation between the bulls and the bears. Oneside argues that TSLA's financial growth and future prospects, including FSD, insurance, and robotaxis, justify the current $902.12 billion valuations, while others argue that the current financials and cult-like following have led to a massive overvaluation in TSLA's stock.I tip my hat to Elon Musk, as his accomplishments are second to none. When others called him crazy, Mr. Musk chose one of the hardest industries to compete in, started TSLA from the ground up, went to battle against the auto manufacturers, and succeeded. TSLA is one of the rare success stories that has truly shaped an industry, and the barriers of entry that were overcome are astonishing. TSLA didn't have the capital, manufacturing, credibility, or the infrastructure that its competitors did, yet they found a way to succeed. If the odds weren't enough which TSLA faced, they accomplished their goals without a combustible engine and pioneered an entirely new sector within the automotive industry.Just because TSLA is a great company, it doesn't mean TSLA has a great stock, or it isn't overvalued. I am not bearish on TSLA the company because I believe they still have a long runway of growth ahead of them, but I am bearish on the valuation. Prior to leaving a comment on why I am wrong, please read the article and think about the metrics I am citing; then, I will happily discuss any viewpoints about the analysis.Tesla Vs. The World In The Automotive SectorIt feels like TSLA vs. the world whenever TSLA is discussed. Discussing who makes a better automobile is a matter of opinion, and everyone is correct because it's their opinion. If person A thinks TSLA makes the best car and person B thinks Mercedes Benz makes the best car, they are both correct. Debating over this is pointless, so let's look at the raw numbers.TSLA has a larger market cap than the combination ofToyota(TM),Volkswagen(OTCPK:VWAGY),Daimler(OTCPK:DDAIF),BMW(OTCPK:BMWYY),General Motors(GM),Ford(F),Honda(HMC),Ferrari(RACE),Nissan(OTCPK:NSANY),Subaru(OTCPK:FUJHY),Volvo(OTCPK:VOLAF), andMazda(OTCPK:MZDAY). TSLA's market cap is currently $986.92 billion, while the combination of these 12 companies is $777.41 billion.Steven FiorilloThe P/S ratio is often cited to justify the valuation. The combination of TM, VWAGY, DDAIF, BMWYY, GM, F, HMC, RACE, NSANY, FUJHY, VOLAF, and MZDAY has generated $1.38 trillion in revenue over the TTM, putting their P/S at 0.56, while TSLA has generated $62.19 billion in revenue and has a 15.87 P/S.Steven Fiorillo, Seeking AlphaAs a combined entity, these 12 companies have generated $118.29 billion in net income, while TSLA has produced $8.4 billion.Steven Fiorillo, Seeking AlphaTSLA is a great company, but its current valuation has become overly inflated. TSLA's market cap is $209.52 billion larger than these 12 auto manufacturers, yet the combination of the 12 auto manufacturers generates $1.32 trillion more in revenue and $109.89 billion more in net income.Steven Fiorillo, Seeking AlphaLooking at the market caps, one would assume that TSLA has a dominant majority over its competitors in auto sales within the U.S. According to the2021 data, TSLA sold 2.02% of all vehicles in the U.S. TSLA's market cap reflects a level of dominance that is non-existent.Realistically, TSLA will have a hard time disrupting the sector further due to the price point of their vehicles. The reality is that, unless TSLA can sell a car that rivals a Honda or Toyota, doubling its market share is going to be a daunting task. It's just math. TSLA doesn't have a product for the masses, and while it may continue to grow in the luxury segment, the amount of growth that can be achieved is limited due to the pricing power of the consumer.www.goodcarbadcar.netTesla Isn't A Technology Company And Shouldn't Be Valued As OneThe valuation rebuttal has always been that TSLA isn't an automobile company, rather, it's a technology company.TeslaPage 23 ofTSLA's Q1 2022 slide deck from their earnings call is their statement of operations. Once again, 100% of TSLA's gross profit and net income are derived from automobiles. Energy generation and storage lose money as it generates $616 million in revenue while the cost of this revenue is $688 million. The same goes for Services and others, as this segment generates $1.279 billion in revenue while the cost of this revenue is $1.286 billion. This doesn't even factor in operating expenses.TSLA manufacturers state of the art automobiles, but this doesn't classify them as a technology company, nor should they be classified as one. Since this is always the rebuttal and technology companies trade at larger earnings multiples, I will compare TSLA to Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOG) (GOOGL), and Meta Platforms (FB) and illustrate why TSLA is still drastically overvalued if the market was still to provide it with a tech multiple.Prior to the comparisons, I want to frame the analysis by providing each company's market cap:AAPL $2.69 TrillionMSFT $2.17 TrillionGOOGL $1.62 TrillionAMZN $1.28 TrillionTSLA $986.92 BillionFB $604.62 BillionI am going to start with growth because this is always the key metric bulls point out. Since the close of 2018, which is 3.25 fiscal years, TSLA has grown its revenue from $21.46 billion to $62.19 billion.This is absolutely remarkable, but it doesn't place TSLA in the upper epsilon of technology companies. Over the same period, FB grew its revenue by $63.83 billion, which is more than what TSLA produced in the TTM. FB grew its revenue by more than what TSLA produces and generates just about double the revenue ($119.67 billion), yet TSLA has a larger market cap. For everyone who has used growth as their investment premise, FB having a market cap that's $382.30 less than TSLA nullifies that aspect of the bull thesis. AMZN's market cap is only $294.33 billion larger than TSLA, yet they generated $477.75 billion in revenue and grew their revenue by $341.76 billion in this period. Using revenue growth for TSLA doesn't support the valuation.Steven Fiorillo, Seeking AlphaNext, I will turn to profits because, at the end of the day, businesses are in the business of making money. Once again, TSLA has done a fantastic job of monetizing its business and, in 3.25 short years, has gone from losing -$976 million to make $8.4 billion in the TTM for an increase of $9.38 billion. FB has produced $37.34 billion in profit in the TTM, and its net income grew by $15.23 billion over this period. Using growth doesn't support the valuation when FB has a market cap that's $382.30 less than TSLA and grew its profits in this period by almost double what TSLA has generated in the TTM.Steven Fiorillo, Seeking AlphaThe new metric bulls are using in their thesis is TSLA's free cash flow (FCF). Once again, TSLA has done an excellent job, going from -$221 million of FCF in 2018 to $6.93 billion of FCF in the TTM. Many companies would love to grow their annual FCF by $7.15 billion over a 3.25-year period, and this should be applauded.Let's look at FB once again, since TSLA's valuation isn't based on its core segment as an automobile manufacturer. FB has grown its FCF over the previous 3.25 years by $23.45 billion, more than 3x TSLA's growth, and has generated $39.81 billion of FCF in the TTM. FB generated roughly 5.75x more FCF than TSLA and grew its FCF by more than 3x what TSLA produces, yet FB has a market cap that's almost $400 billion less than TSLA. Growth within the financials does not support TSLA's valuation, which is a breath away from $1 trillion.Steven Fiorillo, Seeking AlphaToday you're paying a 113.81 P/E for TSLA. Paying a larger multiple for a company that's growing its earnings quickly is normal, but TSLA isn't growing by larger amounts than FB, and FB trades at a 16.66 P/E. I have seen TSLA bulls justify the P/E because of TSLA's growth factor, but this doesn't hold up when FB has grown by larger amounts from larger starting positions and has a P/E that's a fraction of TSLA. Look at AAPL, which is the largest company in the world. AAPL has grown its net income by $56.25 billion and its FCF by $52.3 billion over the past 3.25 years, and its P/E is 26.78. People are blindly paying any multiple the market places on TSLA.TSLA is trading at a 15.38 P/S. The justification for this multiple is difficult to defend while AMZN trades at a P/S of 11.31. AMZN's revenue grew by $341.76 billion over the past 3.25 years while TSLA grew their revenue by $40.73 billion. Instead of an absolute basis, looking at this from a percentage aspect, TSLA grew its revenue by 189.78%, while AMZN's grew by 251.32%. The P/S ratio is not a supporting valuation metric as TSLA is trading at a larger multiple than AMZN yet produced $301.03 billion less in revenue growth compared to AMZN. At the very least, TSLA should trade at a lower P/S multiple than AMZN considering their revenue growth was a fraction of AMZN's.TSLA has done an excellent job monetizing its revenue, delivering exceptional margins, and generating FCF. Now that TSLA is generating billions in FCF, it's been inserted into the bull thesis. FCF is a measure of profitability that excludes the non-cash expenses of the income statement and includes spending on equipment and assets as well as changes in working capital from the balance sheet. FCF could be the most underrated and most important financial metric to look at, as this is the pool of capital that companies can utilize to repay debt, pay dividends, buy back shares, make acquisitions, or reinvest in the business.Every investment is the present value of all future cash flow. This is why investors look at the price to FCF valuation. Investors want to pay the cheapest multiple for a company's FCF. Today, you're paying 142.52x TSLA's FCF. Going back to the FCF section, TSLA grew its FCF by $7.15 billion over the past 3.25 years. FB generated $23.45 billion of FCF in this period, which is 3x the amount TSLA grew, yet FB is trading at a 15.19x multiple on price to FCF.Why on earth would you want to pay 142.52x for TSLA's FCF when you could pay 15.19x for FB, which is growing their FCF by more than 3x the amount that TSLA is growing by? How about AAPL? AAPL grew its FCF by $52.3 billion and trades at a 25.4x price to FCF. If I exclude FB for a moment, should TSLA trade at a larger FCF multiple than GOOGL, which has grown its FCF by $46.15 billion over the past 3.25 years? My answer is no because there is no guarantee that TSLA will ever generate $46.15 billion in annual FCF, let alone the $68.99 billion in FCF that GOOGL generates.So what is a fair price to FCF multiple for TSLA? I don't believe TSLA has earned the right to trade at the same multiples as the rest of big tech considering the levels of FCF they produce. If I stick with the methodology that FB is egregiously undervalued, then TSLA should trade above 15.19x its FCF but lower than the 23.42x multiple GOOGL trades at.I don't want to be overly bearish, so I will place a 21x multiple on TSLA's FCF, which is more than fair considering big tech metrics. A 21x multiple on TSLA's FCF puts its market cap at $145.43 billion, which is -85.26% from its current market cap of $986.92 billion. It's just math, and if TSLA is going to be valued as a technology company, it needs to be compared to the technology companies with similar market caps.At the very least, there isn't a single reason why TSLA's market cap is larger than FB's. There isn't a single metric that TSLA beats FB in. Based on FB's valuation, if TSLA traded at the same FCF multiple, it would have a market cap of $105.19 billion.TSLA has a gross profit margin of 27.1% ($16.85b / $62.19b) and a profit margin of 13.51% ($8.4b / $62.19b). FB has a gross profit margin of 80.34% ($96.14b / $119.67b) and a profit margin of 31.2% ($37.34b / $119.67b). FB has much wider margins and is growing its revenue by larger amounts. This reinforces my methodology as to why TSLA is grossly overvalued. GOOGL has a gross profit margin of 56.93% ($153.9b / $270.33b) and a profit margin of 27.57% ($74.54b / $270.33b).The chances are incredibly slim that TSLA can double its profit margin to be within striking distance of GOOGL's. TSLA should not trade at a larger FCF, P/E, or P/S multiple than FB or GOOGL. While the market would indicate that I am wrong today, eventually, the hype will wear off, and TSLA will trade at a realistic valuation.TSLA's Future Catalysts Have A Long Way To Go Before Impacting Its Bottom LineThere are three main catalysts people discuss, which include insurance, robotaxis, and FSD.TSLA offers insurance using real-time driving behavior. This is currently available to all Model S, Model 3, Model X, and Model Y owners. The catch is that it's only available in Arizona, Colorado, Illinois, Ohio, Oregon, Texas, and Virginia as of now.TSLA uses a safety rating score to determine the monthly premium for its vehicles. At the largest premium of $130/mo, this would be $1,560 per year. If TSLA converted 100% of their U.S sales in 2021 as an insurance customer, which I think could be possible if TSLA insurance was available in every state, it would have generated $471.12 million in revenue.We have no idea what the margins would have been, but if the margin was 50%, it would have been an additional $235.56 million in net income in 2021. While this is nothing to sneeze at, an additional $235.56 million in net income hardly moves the needle. This could be a $1 billion top-line revenue segment in the future, but with availability in only 7 states, insurance's $1 billion revenue mark is a long way away.TeslaNext,FSD, for which TSLA has created two subscription models, a $99/mo price point and a $199/mo price point. The problem with FSD is that it doesn't make the vehicle fully autonomous, and you still need a driver to be attentive and alert. While I am not arguing that TSLA's FSD isn't leaps and bounds ahead of the competition, the problem is that it's not exactly a self-driving car.The questions around legality and where you can use it pop into my head, and how many of TSLA's drivers opt for this upgrade. Until there is clear legislation and the technology advances to where vehicles can fully drive a person from point A to B while that person takes a nap or reads, I have a hard time believing enough TSLA owners will spend the extra $199/mo on FSD. If there is somewhere where TSLA produces the numbers about how many owners opt for this package, please let me know, and I will crunch the numbers.Which Features Come With My Subscription?The FSD capability features you receive are based on your configuration and location. Not all features are available in all markets, and features are subject to change.Learn more about Autopilot and Full Self-Driving capability features.Note: These features are designed to become more capable over time; however the currently enabled features do not make the vehicle autonomous. The currently enabled features require a fully attentive driver, who has their hands on the wheel and is prepared to take over at any moment.The last catalyst is Robotaxis which many have commented on in my articles before. We're so far off on Robotaxis that this can't be considered in TSLA's upcoming revenue. I would think major legislation would be needed for Robotaxis to exist, and there is no telling how many years away we are from this.Also, what is the percentage of TSLA owners that would actually allow their vehicle to be used as a Robotaxi? Depending on what the profitability is, I can see people buying TSLAs to enroll them in this program, but, once again, we need to see the economics behind it. I know I am just one opinion, but I would never enroll one of my cars into a robotaxi program because I don't want other people that I don't know in my car. I would think there are many others that have similar viewpoints.The real upcoming catalysts are future revenue growth and entering the Chinese market. In 2021 TSLA grew its YoY revenue by 70.67%, and their off to a great start after Q1 2022. Only time will tell what type of growth rate TSLA can maintain, but too many people are assuming that TSLA will obliterate the competition. Over the next several years, we could see TSLA's growth rate become significantly reduced as more luxury operators put EVs on the road.At TSLA's current margins, they would need to increase their revenue by 444.55% to $276.47 billion to produce the same amount of net income ($37.34b) that FB produces today at their current 13.51% profit margin. Maybe TSLA can get there in the future, but why should TSLA be valued at almost $1 trillion today, considering not a single metric of theirs is similar to FB or GOOGL, and TSLA's growth across any of the sectors isn't larger than FB or GOOGL?Tesla Continues To Dilute Shareholders, And Almost No Shareholders CareDilution kills shareholder value. Look, I am a shareholder of TSLA, and I hate that my shares continue to be diluted. These numbers are split-adjusted that I am using. Over the past decade,TSLA has diluted its shares by 80.93%. This is horrible compared to big tech, yet investors can't buy enough TSLA shares. TSLA finished 2012 with 572.6 million shares and, as of its last filing, had increased its outstanding shares to 1.036 billion shares.This is the equivalent of me taking a pizza, and instead of giving you a slice, cutting another 6.5 slices, then giving you one. The pizza represents TSLA, the company, and they basically turned an 8-slice pie into a 14.5-slice pie, reducing shareholder's ownership and the amount of equity, revenue, and EPS our shares represent.If you want to see what a true shepherd of shareholder value looks like, turn to AAPL. In 2012 AAPL had 26.3 billion shares outstanding. Over the past decade, AAPL has repurchased 10.09 billion shares, reducing its outstanding shares by 38.37%. Every quarter, AAPL is buying back shares and increasing the ownership its shares represent. TSLA, on the other hand, continues to dilute shareholders by increasing shares YOY.I Could Be Completely Wrong, And Tesla Could Continue Growing At These RatesTSLA's vehicle deliveries continue to outpace its growing production. YoY TSLA's deliveries increased by 68% in Q1, adding 125,171 delivered vehicles to its customers. TSLA just began Model Y deliveries from the Austin facility, and production at the Gigafactory in Berlin started in March of 2022. TSLA's Shanghai facility had strong production rates prior to the spike in COVID that resulted in temporary shutdowns. TSLA isn't just focusing on the U.S, they have Europe and China in their sights.EVs accounted for 488,000 sales in the U.S for 2021, and the previous projection was that EVs would account for 670,000 units sold in 2022. Oil has hovered around $100 per barrel and could render the previous projections of 37% increased EV sales domestically for 2022 conservative. TSLA is in a prime position to capitalize on this trend. In 2021 TSLA vehicles accounted for 61.89% of EVs sold in the U.S (301,998 / 488,000).Hypothetically, if the previous projection of 670,000 EV sales for 2022 is accurate and TSLA maintains its current margin, they would sell 414,628 vehicles throughout the U.S in 2022. If gas prices do alter the decision-making process when deciding between a combustible engine or an EV, then TSLA could continue surprising the market with QoQ earnings beats.The U.S has a national goal of reaching 50% of domestic auto sales coming from EVs. In 2021, EVs accounted for 3.26% of total sales in the U.S auto market. Based on U.S auto sales in 2021, annual EV sales would need to grow by 6,989,403 to reach a 50% EV to combustible engine ratio. Hypothetically if U.S auto sales stayed flat but EVs reached 50% of the market in 2030 they would sell 7,477,403 vehicles. If TSLA's dominance in the EV sector was to drop from 61.89% to 15% due to increased competition, they would generate 1,121,610 in sales compared to 301,998 in 2021. When you add in Europe and China, TSLA certainly has the ability to become a top auto manufacturer by sales next decade.Bulls aren't incorrect to be excited about TSLA. The world is moving toward EVs, and TSLA is the crème de la crème. As I said in the beginning, I am bullish about TSLA's future prospects, but I think the valuation today is overinflated. Nobody can predict the future, but I have no doubt that TSLA will continue to grow its sales YoY.The question becomes, how much growth will they be able to achieve YoY? In 2021, TM generated $226.48 billion of revenue and, based on the future of EVs, TSLA certainly could achieve this level of revenue in the future. Based on TSLA's current 13.51% profit margin, if they achieved TM's level of revenue, they would generate $30.59 billion of net income, which would definitely make today's valuation look more realistic.TeslaConclusionYou're probably wondering how I can be a shareholder and be a bear on TSLA's valuation at the same time. It's simple; my wife bought shares of TSLA, which makes me a shareholder. My stance has always been bullish on the company and bearish on the valuation. What Elon Musk and the team at TSLA has accomplished is astonishing, and they deserve nothing but respect.Keep in mind a company and a company's stock are two separate things. TSLA continues to dilute shareholders, and they and the market are valuing TSLA as if it's FB or GOOGL. TSLA is not a technology company; it's an automobile company, as the automotive segments drive 100% of its gross revenue and net income.TSLA is trading at a P/E of 113.81, a P/S of 15.38, and a 142.52x multiple on its FCF. The numbers are drastically inflated as TSLA has no business trading at a larger P/S multiple than AMZN, which trades at 11.31 P/S when it has grown its revenue by $341.76 billion over the previous 3.25 years compared to TSLA's $40.73 billion of revenue growth. TSLA has generated $6.93 billion in FCF over the TTM, while Mr. Market has placed a 142.52x multiple on TSLA due to $7.15 billion FCF growth over the past 3.25 years. FB trades at a 15.19x FCF multiple while growing FCF by $23.45 billion over this period which is more than 3x what TSLA has generated in the TTM.With FB trading at 15.19x FCF, GOOGL at 23.42x FCF, and AAPL at 25.4x FCF, it's hard to justify any number above 20x for TSLA. I think a 21x FCF multiple is generous and that places TSLA at a market cap of $145.43 billion, which is -85.26% from its current market cap of $986.92 billion.","news_type":1},"isVote":1,"tweetType":1,"viewCount":93,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":175804210,"gmtCreate":1627018678930,"gmtModify":1703482554324,"author":{"id":"3581675959770023","authorId":"3581675959770023","name":"LaifaLee","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3581675959770023","authorIdStr":"3581675959770023"},"themes":[],"htmlText":"?","listText":"?","text":"?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/175804210","repostId":"2153787206","repostType":4,"repost":{"id":"2153787206","pubTimestamp":1627011840,"share":"https://ttm.financial/m/news/2153787206?lang=&edition=fundamental","pubTime":"2021-07-23 11:44","market":"us","language":"en","title":"Warren Buffett Has Gained Over $181 Billion on These 5 Stocks","url":"https://stock-news.laohu8.com/highlight/detail?id=2153787206","media":"Motley Fool","summary":"These five holdings account for 88% of Berkshire Hathaway's unrealized gains.","content":"<p><b>Berkshire Hathaway</b> (NYSE:BRK.A)(NYSE:BRK.B) CEO Warren Buffett is arguably in a class of his own when it comes to investing legends. Since taking the helm of Berkshire Hathaway in 1965, the Oracle of Omaha has led his stock to an average annual return of 20%. Taking into account the 20% year-to-date gain for Berkshire's Class A shares (BRK.A), shareholders have seen Buffett generate aggregate returns of almost 3,400,000% in 56 years.</p>\n<p>Although Berkshire Hathaway has a relatively large portfolio filled with four dozen different securities, Buffett has never been a big fan of diversification. As a result, only a small number of holdings comprise the bulk of Berkshire Hathaway's $206.4 billion in unrealized gains, as of this past weekend.</p>\n<p>Based on the cost basis of Berkshire's major holdings (outlined in the company's 2020 annual shareholder letter), the following five stocks have netted Buffett $181.1 billion in combined unrealized gains (about 88% of all current unrealized profit), not including dividends paid.</p>\n<p><img src=\"https://static.tigerbbs.com/d28b3a8823057ce2bc2495cefe7ee3ff\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"></p>\n<p>Berkshire Hathaway CEO Warren Buffett is all smiles with his company sitting on over $206 billion in unrealized gains. Image source: The Motley Fool.</p>\n<h3>Apple: $101,764,676,001 in unrealized gains</h3>\n<p>Easily the best investment of Buffett's tenured career is <b>Apple</b> (NASDAQ:AAPL). Even after modestly paring down his company's stake in the tech kingpin, Berkshire Hathaway still owns 907,559,761 shares at a cost basis of $34.26 a share. With Apple closing last week at $146.39 a share, the Oracle of Omaha and his team are sitting on close to a $102 billion unrealized gain.</p>\n<p>Investors certainly shouldn't look for this stake to be reduced any further anytime soon. That's because Buffett views Apple as Berkshire Hathaway's \"third business.\" It's a globally recognized brand with an exceptionally loyal following, as evidenced by the mammoth lines outside of its stores anytime a new product hits the shelves. And, as you're probably aware, the iPhone is the dominant smartphone by market share in the U.S.</p>\n<p>In addition to Apple being a product innovation juggernaut, CEO Tim Cook is overseeing a steady transition toward services. By emphasizing various subscription-based platforms, Apple can reduce some of the revenue lumpiness associated with tech replacement cycles and likely boost its operating margins.</p>\n<p>A final reason Buffett isn't bailing on Apple is the company's generous shareholder return program. Though some of you might be scratching your head given that Apple's dividend yield is \"only\" 0.6%, the $0.88 base annual payout is closer to 2.6% of Berkshire Hathaway's cost basis. Tack on Apple's aggressive share repurchase program and you have a very shareholder-friendly company.</p>\n<p><img src=\"https://static.tigerbbs.com/44a30c4dfd6886a29e22d3c6558c3e56\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"></p>\n<p>Image source: Getty Images.</p>\n<h3>Bank of America: $24,530,235,143 in unrealized gains</h3>\n<p>There's no industry on the planet Buffett loves more than bank stocks -- and there's no bank stock Buffett favors more than <b>Bank of America</b> (NYSE:BAC). Berkshire Hathaway owns over 1.03 billion shares of BofA with a cost basis of $14.17 a share. This works out to an unrealized gain of just over $24.5 billion, based on where BofA shares closed this past Friday, July 16.</p>\n<p>Buffett has always been a big fan of playing the economic numbers game, which is exactly what he's doing with Bank of America. Since the U.S. economy spends a disproportionate amount of time expanding, relative to contracting, bank stocks like BofA should benefit from stronger loan origination and higher net interest income. The Oracle of Omaha is fully aware that recessions are a natural part of the economic cycle, but he fully understands that the long term strongly favors optimists.</p>\n<p>More specific to the business, BofA stands to benefit from eventual interest rate hikes by the Federal Reserve. Bank of America is the most interest-sensitive of all the big banks, with the company noting in the June-ended quarter that a 100 basis point parallel shift in the interest rate yield curve would net it an extra $8 billion in net interest income over the next 12 months.</p>\n<p>With BofA pushing digitization initiatives and bolstering its dividend program, it's far likelier that Buffett ups his stake in the company than sells a single share.</p>\n<p><img src=\"https://static.tigerbbs.com/ed3e6a16841306014bf0cfc3b1697b23\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"></p>\n<p>Image source: American <a href=\"https://laohu8.com/S/EXPR\">Express</a>.</p>\n<h2>American Express: $24,488,160,264 in unrealized gains</h2>\n<p>Whereas the gains racked up in Apple and BofA have come within the past couple of years, the nearly $24.5 billion in unrealized gains in credit services behemoth <b>American Express</b> (NYSE:AXP) have been built up over the past 28 years. With a cost basis of right around $8.49 a share, Buffett's patience has paid off in a big way with AmEx.</p>\n<p>Similar to Bank of America, American Express is a cyclical company that benefits from the aforementioned numbers game. If the U.S. and global economy are expanding, consumers and businesses are more likely to spend more, thereby helping boost payment processing revenue and profits. Keep in mind, though, AmEx is a double dipper. In addition to processing payments, it's also a credit services provider. This means it can generate growing amounts of fee revenue and interest income during long-winded periods of expansion.</p>\n<p>Another facet to AmEx's success is the company's ability to bring in affluent clientele. The well-to-do are far less inclined to alter their spending habits when minor economic disruptions rear their heads. As a result, AmEx isn't as likely to be hurt by credit delinquencies as some of its lending peers.</p>\n<p>With Berkshire Hathaway an American Express shareholder since 1993, I don't foresee Buffett or his team selling shares anytime soon.</p>\n<p><img src=\"https://static.tigerbbs.com/299023e9f7694c143fc3162fbb154afa\" tg-width=\"700\" tg-height=\"467\" referrerpolicy=\"no-referrer\"></p>\n<p>Image source: Coca-Cola.</p>\n<h3>Coca-Cola: $21,262,000,000 in unrealized gains</h3>\n<p>Speaking of tenured holdings, no stock has been a fixture in Buffett's portfolio for longer than beverage giant <b>Coca-Cola</b> (NYSE:KO). With a cost basis of a fraction under $3.25 a share, Buffett and his team have piled up almost $21.3 billion in unrealized gains by owning Coca-Cola since 1988.</p>\n<p>Like Apple, we're talking about a company with insanely strong branding and brand recognition. Coke products are sold in all but two countries worldwide (Cuba and North Korea), and it has more than 20 brands in its product portfolio generating at least $1 billion in annual sales. Coca-Cola enjoys the best of both worlds, with 20% of the developed market cold beverage share (i.e., highly predictable cash flow) and 10% of emerging market cold beverage share, which represents a higher-growth opportunity over the long run.</p>\n<p>Beyond geographic diversity, marketing is a big reason for Coca-Cola's success. The company has not been shy about turning to social media and well-known ambassadors to represent its brand, and it has clear holiday tie-ins that go back decades.</p>\n<p>Considering that Berkshire Hathaway is netting almost a 52% annual dividend yield based on its original cost basis for Coca-Cola, there's absolutely no incentive to sell this position.</p>\n<p><img src=\"https://static.tigerbbs.com/0405d7e87cf0321a7d9113d036c164a4\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"></p>\n<p>Image source: Getty Images.</p>\n<h3>Moody's: $9,076,258,024 in unrealized gains</h3>\n<p>While Apple singlehandedly takes the crown for generating the highest unrealized return in nominal dollars for the Oracle of Omaha, credit ratings agency <b>Moody's</b> (NYSE:MCO) might well be Warren Buffett's greatest investment on a percentage basis of all time. Berkshire's cost basis is $10.05 a share following Moody's spinoff from Dun &amp; Bradstreet in 2000. Moody's closed this past week at almost $378 a share -- good enough for a 3,661% return and nearly $9.1 billion unrealized gain.</p>\n<p>One thing keeping Moody's busy is historically low lending rates. With the Federal Reserve standing pat for as long as possible on interest rates, businesses haven't been shy about issuing debt to hire, acquire, innovate, or even buy back stock, as in Apple's case. With so much corporate debt issued, Moody's has been active evaluating the debt landscape.</p>\n<p>Equally exciting has been the generally heightened levels of market volatility and economic uncertainty since the beginning of 2020. Though Moody's is best known for its credit ratings operations, its fastest-growing segment tends to be analytics. As long as deep levels of uncertainty exist, Moody's Analytics has double-digit annual growth potential.</p>\n<p>As with Coke, Buffett's patience has resulted in an insanely high yield on cost with Moody's. Despite a 0.7% nominal yield, Berkshire Hathaway is netting an almost 25% yield annually, based on its initial cost basis.</p>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Warren Buffett Has Gained Over $181 Billion on These 5 Stocks</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWarren Buffett Has Gained Over $181 Billion on These 5 Stocks\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-07-23 11:44 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2021/07/22/warren-buffett-gained-181-billion-these-5-stocks/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) CEO Warren Buffett is arguably in a class of his own when it comes to investing legends. Since taking the helm of Berkshire Hathaway in 1965, the Oracle of ...</p>\n\n<a href=\"https://www.fool.com/investing/2021/07/22/warren-buffett-gained-181-billion-these-5-stocks/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"AAPL":"苹果","MCO":"穆迪","BRK.B":"伯克希尔B","AXP":"美国运通","BAC":"美国银行","BRK.A":"伯克希尔","KO":"可口可乐"},"source_url":"https://www.fool.com/investing/2021/07/22/warren-buffett-gained-181-billion-these-5-stocks/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2153787206","content_text":"Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) CEO Warren Buffett is arguably in a class of his own when it comes to investing legends. Since taking the helm of Berkshire Hathaway in 1965, the Oracle of Omaha has led his stock to an average annual return of 20%. Taking into account the 20% year-to-date gain for Berkshire's Class A shares (BRK.A), shareholders have seen Buffett generate aggregate returns of almost 3,400,000% in 56 years.\nAlthough Berkshire Hathaway has a relatively large portfolio filled with four dozen different securities, Buffett has never been a big fan of diversification. As a result, only a small number of holdings comprise the bulk of Berkshire Hathaway's $206.4 billion in unrealized gains, as of this past weekend.\nBased on the cost basis of Berkshire's major holdings (outlined in the company's 2020 annual shareholder letter), the following five stocks have netted Buffett $181.1 billion in combined unrealized gains (about 88% of all current unrealized profit), not including dividends paid.\n\nBerkshire Hathaway CEO Warren Buffett is all smiles with his company sitting on over $206 billion in unrealized gains. Image source: The Motley Fool.\nApple: $101,764,676,001 in unrealized gains\nEasily the best investment of Buffett's tenured career is Apple (NASDAQ:AAPL). Even after modestly paring down his company's stake in the tech kingpin, Berkshire Hathaway still owns 907,559,761 shares at a cost basis of $34.26 a share. With Apple closing last week at $146.39 a share, the Oracle of Omaha and his team are sitting on close to a $102 billion unrealized gain.\nInvestors certainly shouldn't look for this stake to be reduced any further anytime soon. That's because Buffett views Apple as Berkshire Hathaway's \"third business.\" It's a globally recognized brand with an exceptionally loyal following, as evidenced by the mammoth lines outside of its stores anytime a new product hits the shelves. And, as you're probably aware, the iPhone is the dominant smartphone by market share in the U.S.\nIn addition to Apple being a product innovation juggernaut, CEO Tim Cook is overseeing a steady transition toward services. By emphasizing various subscription-based platforms, Apple can reduce some of the revenue lumpiness associated with tech replacement cycles and likely boost its operating margins.\nA final reason Buffett isn't bailing on Apple is the company's generous shareholder return program. Though some of you might be scratching your head given that Apple's dividend yield is \"only\" 0.6%, the $0.88 base annual payout is closer to 2.6% of Berkshire Hathaway's cost basis. Tack on Apple's aggressive share repurchase program and you have a very shareholder-friendly company.\n\nImage source: Getty Images.\nBank of America: $24,530,235,143 in unrealized gains\nThere's no industry on the planet Buffett loves more than bank stocks -- and there's no bank stock Buffett favors more than Bank of America (NYSE:BAC). Berkshire Hathaway owns over 1.03 billion shares of BofA with a cost basis of $14.17 a share. This works out to an unrealized gain of just over $24.5 billion, based on where BofA shares closed this past Friday, July 16.\nBuffett has always been a big fan of playing the economic numbers game, which is exactly what he's doing with Bank of America. Since the U.S. economy spends a disproportionate amount of time expanding, relative to contracting, bank stocks like BofA should benefit from stronger loan origination and higher net interest income. The Oracle of Omaha is fully aware that recessions are a natural part of the economic cycle, but he fully understands that the long term strongly favors optimists.\nMore specific to the business, BofA stands to benefit from eventual interest rate hikes by the Federal Reserve. Bank of America is the most interest-sensitive of all the big banks, with the company noting in the June-ended quarter that a 100 basis point parallel shift in the interest rate yield curve would net it an extra $8 billion in net interest income over the next 12 months.\nWith BofA pushing digitization initiatives and bolstering its dividend program, it's far likelier that Buffett ups his stake in the company than sells a single share.\n\nImage source: American Express.\nAmerican Express: $24,488,160,264 in unrealized gains\nWhereas the gains racked up in Apple and BofA have come within the past couple of years, the nearly $24.5 billion in unrealized gains in credit services behemoth American Express (NYSE:AXP) have been built up over the past 28 years. With a cost basis of right around $8.49 a share, Buffett's patience has paid off in a big way with AmEx.\nSimilar to Bank of America, American Express is a cyclical company that benefits from the aforementioned numbers game. If the U.S. and global economy are expanding, consumers and businesses are more likely to spend more, thereby helping boost payment processing revenue and profits. Keep in mind, though, AmEx is a double dipper. In addition to processing payments, it's also a credit services provider. This means it can generate growing amounts of fee revenue and interest income during long-winded periods of expansion.\nAnother facet to AmEx's success is the company's ability to bring in affluent clientele. The well-to-do are far less inclined to alter their spending habits when minor economic disruptions rear their heads. As a result, AmEx isn't as likely to be hurt by credit delinquencies as some of its lending peers.\nWith Berkshire Hathaway an American Express shareholder since 1993, I don't foresee Buffett or his team selling shares anytime soon.\n\nImage source: Coca-Cola.\nCoca-Cola: $21,262,000,000 in unrealized gains\nSpeaking of tenured holdings, no stock has been a fixture in Buffett's portfolio for longer than beverage giant Coca-Cola (NYSE:KO). With a cost basis of a fraction under $3.25 a share, Buffett and his team have piled up almost $21.3 billion in unrealized gains by owning Coca-Cola since 1988.\nLike Apple, we're talking about a company with insanely strong branding and brand recognition. Coke products are sold in all but two countries worldwide (Cuba and North Korea), and it has more than 20 brands in its product portfolio generating at least $1 billion in annual sales. Coca-Cola enjoys the best of both worlds, with 20% of the developed market cold beverage share (i.e., highly predictable cash flow) and 10% of emerging market cold beverage share, which represents a higher-growth opportunity over the long run.\nBeyond geographic diversity, marketing is a big reason for Coca-Cola's success. The company has not been shy about turning to social media and well-known ambassadors to represent its brand, and it has clear holiday tie-ins that go back decades.\nConsidering that Berkshire Hathaway is netting almost a 52% annual dividend yield based on its original cost basis for Coca-Cola, there's absolutely no incentive to sell this position.\n\nImage source: Getty Images.\nMoody's: $9,076,258,024 in unrealized gains\nWhile Apple singlehandedly takes the crown for generating the highest unrealized return in nominal dollars for the Oracle of Omaha, credit ratings agency Moody's (NYSE:MCO) might well be Warren Buffett's greatest investment on a percentage basis of all time. Berkshire's cost basis is $10.05 a share following Moody's spinoff from Dun & Bradstreet in 2000. Moody's closed this past week at almost $378 a share -- good enough for a 3,661% return and nearly $9.1 billion unrealized gain.\nOne thing keeping Moody's busy is historically low lending rates. With the Federal Reserve standing pat for as long as possible on interest rates, businesses haven't been shy about issuing debt to hire, acquire, innovate, or even buy back stock, as in Apple's case. With so much corporate debt issued, Moody's has been active evaluating the debt landscape.\nEqually exciting has been the generally heightened levels of market volatility and economic uncertainty since the beginning of 2020. Though Moody's is best known for its credit ratings operations, its fastest-growing segment tends to be analytics. As long as deep levels of uncertainty exist, Moody's Analytics has double-digit annual growth potential.\nAs with Coke, Buffett's patience has resulted in an insanely high yield on cost with Moody's. Despite a 0.7% nominal yield, Berkshire Hathaway is netting an almost 25% yield annually, based on its initial cost basis.","news_type":1},"isVote":1,"tweetType":1,"viewCount":94,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":103126444,"gmtCreate":1619758066088,"gmtModify":1704271962292,"author":{"id":"3581675959770023","authorId":"3581675959770023","name":"LaifaLee","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3581675959770023","authorIdStr":"3581675959770023"},"themes":[],"htmlText":"No&nbsp;","listText":"No&nbsp;","text":"No","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/103126444","repostId":"1179123018","repostType":4,"isVote":1,"tweetType":1,"viewCount":179,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"hots":[{"id":175804210,"gmtCreate":1627018678930,"gmtModify":1703482554324,"author":{"id":"3581675959770023","authorId":"3581675959770023","name":"LaifaLee","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"authorIdStr":"3581675959770023","idStr":"3581675959770023"},"themes":[],"htmlText":"?","listText":"?","text":"?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/175804210","repostId":"2153787206","repostType":4,"isVote":1,"tweetType":1,"viewCount":94,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9062986913,"gmtCreate":1651987418032,"gmtModify":1676535009894,"author":{"id":"3581675959770023","authorId":"3581675959770023","name":"LaifaLee","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"authorIdStr":"3581675959770023","idStr":"3581675959770023"},"themes":[],"htmlText":"Interesting!👍","listText":"Interesting!👍","text":"Interesting!👍","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9062986913","repostId":"1131831539","repostType":4,"repost":{"id":"1131831539","pubTimestamp":1651980653,"share":"https://ttm.financial/m/news/1131831539?lang=&edition=fundamental","pubTime":"2022-05-08 11:30","market":"us","language":"en","title":"Tesla: Overvalued By 85.26% And Not A Technology Company","url":"https://stock-news.laohu8.com/highlight/detail?id=1131831539","media":"Seeking Alpha","summary":"SummaryMake no mistake, Tesla is a phenomenal company that has accomplished the unthinkable as it broke through extreme barriers of entry to disrupt the auto industry.Just because Tesla is a successfu","content":"<html><head></head><body><p>Summary</p><ul><li>Make no mistake, Tesla is a phenomenal company that has accomplished the unthinkable as it broke through extreme barriers of entry to disrupt the auto industry.</li><li>Just because Tesla is a successful company that is causing automotive titans to change from combustible engines to EVs doesn&#39;t mean Tesla&#39;s stock is a good investment today.</li><li>100% of gross profit and net income is generated from the automotive sector as Tesla&#39;s other businesses lose money, making them an automobile manufacturing company, not a technology company.</li><li>I compared Tesla&#39;s metrics to the auto industry and big tech and the results are the same, Tesla&#39;s valuation is egregious.</li></ul><p>It&#39;s rare to find companies that have cult-like followings with loyalists willing to pay any price for its stock. The debate regarding Tesla, Inc.&#39;s (NASDAQ:TSLA) valuation continues to be a topic of conversation between the bulls and the bears. Oneside argues that TSLA&#39;s financial growth and future prospects, including FSD, insurance, and robotaxis, justify the current $902.12 billion valuations, while others argue that the current financials and cult-like following have led to a massive overvaluation in TSLA&#39;s stock.</p><p>I tip my hat to Elon Musk, as his accomplishments are second to none. When others called him crazy, Mr. Musk chose one of the hardest industries to compete in, started TSLA from the ground up, went to battle against the auto manufacturers, and succeeded. TSLA is one of the rare success stories that has truly shaped an industry, and the barriers of entry that were overcome are astonishing. TSLA didn&#39;t have the capital, manufacturing, credibility, or the infrastructure that its competitors did, yet they found a way to succeed. If the odds weren&#39;t enough which TSLA faced, they accomplished their goals without a combustible engine and pioneered an entirely new sector within the automotive industry.</p><p>Just because TSLA is a great company, it doesn&#39;t mean TSLA has a great stock, or it isn&#39;t overvalued. I am not bearish on TSLA the company because I believe they still have a long runway of growth ahead of them, but I am bearish on the valuation. Prior to leaving a comment on why I am wrong, please read the article and think about the metrics I am citing; then, I will happily discuss any viewpoints about the analysis.</p><p><b>Tesla Vs. The World In The Automotive Sector</b></p><p>It feels like TSLA vs. the world whenever TSLA is discussed. Discussing who makes a better automobile is a matter of opinion, and everyone is correct because it&#39;s their opinion. If person A thinks TSLA makes the best car and person B thinks Mercedes Benz makes the best car, they are both correct. Debating over this is pointless, so let&#39;s look at the raw numbers.</p><p>TSLA has a larger market cap than the combination ofToyota(TM),Volkswagen(OTCPK:VWAGY),Daimler(OTCPK:DDAIF),BMW(OTCPK:BMWYY),General Motors(GM),Ford(F),Honda(HMC),Ferrari(RACE),Nissan(OTCPK:NSANY),Subaru(OTCPK:FUJHY),Volvo(OTCPK:VOLAF), andMazda(OTCPK:MZDAY). TSLA&#39;s market cap is currently $986.92 billion, while the combination of these 12 companies is $777.41 billion.</p><p><img src=\"https://static.tigerbbs.com/ff930d2442bf282c1bd880cca408eb94\" tg-width=\"640\" tg-height=\"327\" referrerpolicy=\"no-referrer\"/></p><p>Steven Fiorillo</p><p>The P/S ratio is often cited to justify the valuation. The combination of TM, VWAGY, DDAIF, BMWYY, GM, F, HMC, RACE, NSANY, FUJHY, VOLAF, and MZDAY has generated $1.38 trillion in revenue over the TTM, putting their P/S at 0.56, while TSLA has generated $62.19 billion in revenue and has a 15.87 P/S.</p><p><img src=\"https://static.tigerbbs.com/c9b9661fde232925a758c38fd2e93f36\" tg-width=\"640\" tg-height=\"330\" referrerpolicy=\"no-referrer\"/></p><p>Steven Fiorillo, Seeking Alpha</p><p>As a combined entity, these 12 companies have generated $118.29 billion in net income, while TSLA has produced $8.4 billion.</p><p><img src=\"https://static.tigerbbs.com/d25806eb839eb9ca2b4ef3c24218048c\" tg-width=\"640\" tg-height=\"330\" referrerpolicy=\"no-referrer\"/></p><p>Steven Fiorillo, Seeking Alpha</p><p>TSLA is a great company, but its current valuation has become overly inflated. TSLA&#39;s market cap is $209.52 billion larger than these 12 auto manufacturers, yet the combination of the 12 auto manufacturers generates $1.32 trillion more in revenue and $109.89 billion more in net income.</p><p><img src=\"https://static.tigerbbs.com/a1b686de4009ca733ff9651ce0d9fcaf\" tg-width=\"640\" tg-height=\"348\" referrerpolicy=\"no-referrer\"/></p><p>Steven Fiorillo, Seeking Alpha</p><p>Looking at the market caps, one would assume that TSLA has a dominant majority over its competitors in auto sales within the U.S. According to the2021 data, TSLA sold 2.02% of all vehicles in the U.S. TSLA&#39;s market cap reflects a level of dominance that is non-existent.</p><p>Realistically, TSLA will have a hard time disrupting the sector further due to the price point of their vehicles. The reality is that, unless TSLA can sell a car that rivals a Honda or Toyota, doubling its market share is going to be a daunting task. It&#39;s just math. TSLA doesn&#39;t have a product for the masses, and while it may continue to grow in the luxury segment, the amount of growth that can be achieved is limited due to the pricing power of the consumer.</p><p><img src=\"https://static.tigerbbs.com/442ffe151dd83bc524785857925f9797\" tg-width=\"640\" tg-height=\"227\" referrerpolicy=\"no-referrer\"/></p><p>www.goodcarbadcar.net</p><p><b>Tesla Isn&#39;t A Technology Company And Shouldn&#39;t Be Valued As One</b></p><p>The valuation rebuttal has always been that TSLA isn&#39;t an automobile company, rather, it&#39;s a technology company.</p><p><img src=\"https://static.tigerbbs.com/bbc9ccb2cb8a0e7d40804db24e183214\" tg-width=\"640\" tg-height=\"341\" referrerpolicy=\"no-referrer\"/></p><p>Tesla</p><p>Page 23 ofTSLA&#39;s Q1 2022 slide deck from their earnings call is their statement of operations. Once again, 100% of TSLA&#39;s gross profit and net income are derived from automobiles. Energy generation and storage lose money as it generates $616 million in revenue while the cost of this revenue is $688 million. The same goes for Services and others, as this segment generates $1.279 billion in revenue while the cost of this revenue is $1.286 billion. This doesn&#39;t even factor in operating expenses.</p><p>TSLA manufacturers state of the art automobiles, but this doesn&#39;t classify them as a technology company, nor should they be classified as one. Since this is always the rebuttal and technology companies trade at larger earnings multiples, I will compare TSLA to Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOG) (GOOGL), and Meta Platforms (FB) and illustrate why TSLA is still drastically overvalued if the market was still to provide it with a tech multiple.</p><p>Prior to the comparisons, I want to frame the analysis by providing each company&#39;s market cap:</p><ul><li>AAPL $2.69 Trillion</li><li>MSFT $2.17 Trillion</li><li>GOOGL $1.62 Trillion</li><li>AMZN $1.28 Trillion</li><li>TSLA $986.92 Billion</li><li>FB $604.62 Billion</li></ul><p>I am going to start with growth because this is always the key metric bulls point out. Since the close of 2018, which is 3.25 fiscal years, TSLA has grown its revenue from $21.46 billion to $62.19 billion.</p><p>This is absolutely remarkable, but it doesn&#39;t place TSLA in the upper epsilon of technology companies. Over the same period, FB grew its revenue by $63.83 billion, which is more than what TSLA produced in the TTM. FB grew its revenue by more than what TSLA produces and generates just about double the revenue ($119.67 billion), yet TSLA has a larger market cap. For everyone who has used growth as their investment premise, FB having a market cap that&#39;s $382.30 less than TSLA nullifies that aspect of the bull thesis. AMZN&#39;s market cap is only $294.33 billion larger than TSLA, yet they generated $477.75 billion in revenue and grew their revenue by $341.76 billion in this period. Using revenue growth for TSLA doesn&#39;t support the valuation.</p><p><img src=\"https://static.tigerbbs.com/3c0fbd4eb93f026c4575ee8f77f53e4b\" tg-width=\"640\" tg-height=\"396\" referrerpolicy=\"no-referrer\"/></p><p>Steven Fiorillo, Seeking Alpha</p><p>Next, I will turn to profits because, at the end of the day, businesses are in the business of making money. Once again, TSLA has done a fantastic job of monetizing its business and, in 3.25 short years, has gone from losing -$976 million to make $8.4 billion in the TTM for an increase of $9.38 billion. FB has produced $37.34 billion in profit in the TTM, and its net income grew by $15.23 billion over this period. Using growth doesn&#39;t support the valuation when FB has a market cap that&#39;s $382.30 less than TSLA and grew its profits in this period by almost double what TSLA has generated in the TTM.</p><p><img src=\"https://static.tigerbbs.com/c9716477607711ee0b6d4f77eb24c890\" tg-width=\"640\" tg-height=\"382\" referrerpolicy=\"no-referrer\"/></p><p>Steven Fiorillo, Seeking Alpha</p><p>The new metric bulls are using in their thesis is TSLA&#39;s free cash flow (FCF). Once again, TSLA has done an excellent job, going from -$221 million of FCF in 2018 to $6.93 billion of FCF in the TTM. Many companies would love to grow their annual FCF by $7.15 billion over a 3.25-year period, and this should be applauded.</p><p>Let&#39;s look at FB once again, since TSLA&#39;s valuation isn&#39;t based on its core segment as an automobile manufacturer. FB has grown its FCF over the previous 3.25 years by $23.45 billion, more than 3x TSLA&#39;s growth, and has generated $39.81 billion of FCF in the TTM. FB generated roughly 5.75x more FCF than TSLA and grew its FCF by more than 3x what TSLA produces, yet FB has a market cap that&#39;s almost $400 billion less than TSLA. Growth within the financials does not support TSLA&#39;s valuation, which is a breath away from $1 trillion.</p><p><img src=\"https://static.tigerbbs.com/902a7074eda9e8f2f2765e0833423d2c\" tg-width=\"640\" tg-height=\"373\" referrerpolicy=\"no-referrer\"/></p><p>Steven Fiorillo, Seeking Alpha</p><p>Today you&#39;re paying a 113.81 P/E for TSLA. Paying a larger multiple for a company that&#39;s growing its earnings quickly is normal, but TSLA isn&#39;t growing by larger amounts than FB, and FB trades at a 16.66 P/E. I have seen TSLA bulls justify the P/E because of TSLA&#39;s growth factor, but this doesn&#39;t hold up when FB has grown by larger amounts from larger starting positions and has a P/E that&#39;s a fraction of TSLA. Look at AAPL, which is the largest company in the world. AAPL has grown its net income by $56.25 billion and its FCF by $52.3 billion over the past 3.25 years, and its P/E is 26.78. People are blindly paying any multiple the market places on TSLA.</p><p><img src=\"https://static.tigerbbs.com/75168f6e39ced721cf0c53d78481a983\" tg-width=\"614\" tg-height=\"335\" referrerpolicy=\"no-referrer\"/>TSLA is trading at a 15.38 P/S. The justification for this multiple is difficult to defend while AMZN trades at a P/S of 11.31. AMZN&#39;s revenue grew by $341.76 billion over the past 3.25 years while TSLA grew their revenue by $40.73 billion. Instead of an absolute basis, looking at this from a percentage aspect, TSLA grew its revenue by 189.78%, while AMZN&#39;s grew by 251.32%. The P/S ratio is not a supporting valuation metric as TSLA is trading at a larger multiple than AMZN yet produced $301.03 billion less in revenue growth compared to AMZN. At the very least, TSLA should trade at a lower P/S multiple than AMZN considering their revenue growth was a fraction of AMZN&#39;s.</p><p><img src=\"https://static.tigerbbs.com/aad00a6c490808962705a1a2dae45cfe\" tg-width=\"608\" tg-height=\"338\" referrerpolicy=\"no-referrer\"/>TSLA has done an excellent job monetizing its revenue, delivering exceptional margins, and generating FCF. Now that TSLA is generating billions in FCF, it&#39;s been inserted into the bull thesis. FCF is a measure of profitability that excludes the non-cash expenses of the income statement and includes spending on equipment and assets as well as changes in working capital from the balance sheet. FCF could be the most underrated and most important financial metric to look at, as this is the pool of capital that companies can utilize to repay debt, pay dividends, buy back shares, make acquisitions, or reinvest in the business.</p><p>Every investment is the present value of all future cash flow. This is why investors look at the price to FCF valuation. Investors want to pay the cheapest multiple for a company&#39;s FCF. Today, you&#39;re paying 142.52x TSLA&#39;s FCF. Going back to the FCF section, TSLA grew its FCF by $7.15 billion over the past 3.25 years. FB generated $23.45 billion of FCF in this period, which is 3x the amount TSLA grew, yet FB is trading at a 15.19x multiple on price to FCF.</p><p>Why on earth would you want to pay 142.52x for TSLA&#39;s FCF when you could pay 15.19x for FB, which is growing their FCF by more than 3x the amount that TSLA is growing by? How about AAPL? AAPL grew its FCF by $52.3 billion and trades at a 25.4x price to FCF. If I exclude FB for a moment, should TSLA trade at a larger FCF multiple than GOOGL, which has grown its FCF by $46.15 billion over the past 3.25 years? My answer is no because there is no guarantee that TSLA will ever generate $46.15 billion in annual FCF, let alone the $68.99 billion in FCF that GOOGL generates.</p><p>So what is a fair price to FCF multiple for TSLA? I don&#39;t believe TSLA has earned the right to trade at the same multiples as the rest of big tech considering the levels of FCF they produce. If I stick with the methodology that FB is egregiously undervalued, then TSLA should trade above 15.19x its FCF but lower than the 23.42x multiple GOOGL trades at.</p><p>I don&#39;t want to be overly bearish, so I will place a 21x multiple on TSLA&#39;s FCF, which is more than fair considering big tech metrics. A 21x multiple on TSLA&#39;s FCF puts its market cap at $145.43 billion, which is -85.26% from its current market cap of $986.92 billion. It&#39;s just math, and if TSLA is going to be valued as a technology company, it needs to be compared to the technology companies with similar market caps.</p><p>At the very least, there isn&#39;t a single reason why TSLA&#39;s market cap is larger than FB&#39;s. There isn&#39;t a single metric that TSLA beats FB in. Based on FB&#39;s valuation, if TSLA traded at the same FCF multiple, it would have a market cap of $105.19 billion.</p><p><img src=\"https://static.tigerbbs.com/b81a61d60d9ec098276569cc4a501da0\" tg-width=\"627\" tg-height=\"341\" referrerpolicy=\"no-referrer\"/>TSLA has a gross profit margin of 27.1% ($16.85b / $62.19b) and a profit margin of 13.51% ($8.4b / $62.19b). FB has a gross profit margin of 80.34% ($96.14b / $119.67b) and a profit margin of 31.2% ($37.34b / $119.67b). FB has much wider margins and is growing its revenue by larger amounts. This reinforces my methodology as to why TSLA is grossly overvalued. GOOGL has a gross profit margin of 56.93% ($153.9b / $270.33b) and a profit margin of 27.57% ($74.54b / $270.33b).</p><p>The chances are incredibly slim that TSLA can double its profit margin to be within striking distance of GOOGL&#39;s. TSLA should not trade at a larger FCF, P/E, or P/S multiple than FB or GOOGL. While the market would indicate that I am wrong today, eventually, the hype will wear off, and TSLA will trade at a realistic valuation.</p><p><b>TSLA&#39;s Future Catalysts Have A Long Way To Go Before Impacting Its Bottom Line</b></p><p>There are three main catalysts people discuss, which include insurance, robotaxis, and FSD.TSLA offers insurance using real-time driving behavior. This is currently available to all Model S, Model 3, Model X, and Model Y owners. The catch is that it&#39;s only available in Arizona, Colorado, Illinois, Ohio, Oregon, Texas, and Virginia as of now.</p><p>TSLA uses a safety rating score to determine the monthly premium for its vehicles. At the largest premium of $130/mo, this would be $1,560 per year. If TSLA converted 100% of their U.S sales in 2021 as an insurance customer, which I think could be possible if TSLA insurance was available in every state, it would have generated $471.12 million in revenue.</p><p>We have no idea what the margins would have been, but if the margin was 50%, it would have been an additional $235.56 million in net income in 2021. While this is nothing to sneeze at, an additional $235.56 million in net income hardly moves the needle. This could be a $1 billion top-line revenue segment in the future, but with availability in only 7 states, insurance&#39;s $1 billion revenue mark is a long way away.</p><p><img src=\"https://static.tigerbbs.com/e86de6232b9abf7cee46a9607eb09741\" tg-width=\"640\" tg-height=\"326\" referrerpolicy=\"no-referrer\"/></p><p>Tesla</p><p>Next,FSD, for which TSLA has created two subscription models, a $99/mo price point and a $199/mo price point. The problem with FSD is that it doesn&#39;t make the vehicle fully autonomous, and you still need a driver to be attentive and alert. While I am not arguing that TSLA&#39;s FSD isn&#39;t leaps and bounds ahead of the competition, the problem is that it&#39;s not exactly a self-driving car.</p><p>The questions around legality and where you can use it pop into my head, and how many of TSLA&#39;s drivers opt for this upgrade. Until there is clear legislation and the technology advances to where vehicles can fully drive a person from point A to B while that person takes a nap or reads, I have a hard time believing enough TSLA owners will spend the extra $199/mo on FSD. If there is somewhere where TSLA produces the numbers about how many owners opt for this package, please let me know, and I will crunch the numbers.</p><p>Which Features Come With My Subscription?</p><blockquote>The FSD capability features you receive are based on your configuration and location. Not all features are available in all markets, and features are subject to change.Learn more about Autopilot and Full Self-Driving capability features.</blockquote><blockquote><i>Note: These features are designed to become more capable over time; however the currently enabled features do not make the vehicle autonomous. The currently enabled features require a fully attentive driver, who has their hands on the wheel and is prepared to take over at any moment.</i></blockquote><p>The last catalyst is Robotaxis which many have commented on in my articles before. We&#39;re so far off on Robotaxis that this can&#39;t be considered in TSLA&#39;s upcoming revenue. I would think major legislation would be needed for Robotaxis to exist, and there is no telling how many years away we are from this.</p><p>Also, what is the percentage of TSLA owners that would actually allow their vehicle to be used as a Robotaxi? Depending on what the profitability is, I can see people buying TSLAs to enroll them in this program, but, once again, we need to see the economics behind it. I know I am just one opinion, but I would never enroll one of my cars into a robotaxi program because I don&#39;t want other people that I don&#39;t know in my car. I would think there are many others that have similar viewpoints.</p><p>The real upcoming catalysts are future revenue growth and entering the Chinese market. In 2021 TSLA grew its YoY revenue by 70.67%, and their off to a great start after Q1 2022. Only time will tell what type of growth rate TSLA can maintain, but too many people are assuming that TSLA will obliterate the competition. Over the next several years, we could see TSLA&#39;s growth rate become significantly reduced as more luxury operators put EVs on the road.</p><p>At TSLA&#39;s current margins, they would need to increase their revenue by 444.55% to $276.47 billion to produce the same amount of net income ($37.34b) that FB produces today at their current 13.51% profit margin. Maybe TSLA can get there in the future, but why should TSLA be valued at almost $1 trillion today, considering not a single metric of theirs is similar to FB or GOOGL, and TSLA&#39;s growth across any of the sectors isn&#39;t larger than FB or GOOGL?</p><p><b>Tesla Continues To Dilute Shareholders, And Almost No Shareholders Care</b></p><p>Dilution kills shareholder value. Look, I am a shareholder of TSLA, and I hate that my shares continue to be diluted. These numbers are split-adjusted that I am using. Over the past decade,TSLA has diluted its shares by 80.93%. This is horrible compared to big tech, yet investors can&#39;t buy enough TSLA shares. TSLA finished 2012 with 572.6 million shares and, as of its last filing, had increased its outstanding shares to 1.036 billion shares.</p><p>This is the equivalent of me taking a pizza, and instead of giving you a slice, cutting another 6.5 slices, then giving you one. The pizza represents TSLA, the company, and they basically turned an 8-slice pie into a 14.5-slice pie, reducing shareholder&#39;s ownership and the amount of equity, revenue, and EPS our shares represent.</p><p>If you want to see what a true shepherd of shareholder value looks like, turn to AAPL. In 2012 AAPL had 26.3 billion shares outstanding. Over the past decade, AAPL has repurchased 10.09 billion shares, reducing its outstanding shares by 38.37%. Every quarter, AAPL is buying back shares and increasing the ownership its shares represent. TSLA, on the other hand, continues to dilute shareholders by increasing shares YOY.</p><p><b>I Could Be Completely Wrong, And Tesla Could Continue Growing At These Rates</b></p><p>TSLA&#39;s vehicle deliveries continue to outpace its growing production. YoY TSLA&#39;s deliveries increased by 68% in Q1, adding 125,171 delivered vehicles to its customers. TSLA just began Model Y deliveries from the Austin facility, and production at the Gigafactory in Berlin started in March of 2022. TSLA&#39;s Shanghai facility had strong production rates prior to the spike in COVID that resulted in temporary shutdowns. TSLA isn&#39;t just focusing on the U.S, they have Europe and China in their sights.</p><p>EVs accounted for 488,000 sales in the U.S for 2021, and the previous projection was that EVs would account for 670,000 units sold in 2022. Oil has hovered around $100 per barrel and could render the previous projections of 37% increased EV sales domestically for 2022 conservative. TSLA is in a prime position to capitalize on this trend. In 2021 TSLA vehicles accounted for 61.89% of EVs sold in the U.S (301,998 / 488,000).</p><p>Hypothetically, if the previous projection of 670,000 EV sales for 2022 is accurate and TSLA maintains its current margin, they would sell 414,628 vehicles throughout the U.S in 2022. If gas prices do alter the decision-making process when deciding between a combustible engine or an EV, then TSLA could continue surprising the market with QoQ earnings beats.</p><p>The U.S has a national goal of reaching 50% of domestic auto sales coming from EVs. In 2021, EVs accounted for 3.26% of total sales in the U.S auto market. Based on U.S auto sales in 2021, annual EV sales would need to grow by 6,989,403 to reach a 50% EV to combustible engine ratio. Hypothetically if U.S auto sales stayed flat but EVs reached 50% of the market in 2030 they would sell 7,477,403 vehicles. If TSLA&#39;s dominance in the EV sector was to drop from 61.89% to 15% due to increased competition, they would generate 1,121,610 in sales compared to 301,998 in 2021. When you add in Europe and China, TSLA certainly has the ability to become a top auto manufacturer by sales next decade.</p><p>Bulls aren&#39;t incorrect to be excited about TSLA. The world is moving toward EVs, and TSLA is the crème de la crème. As I said in the beginning, I am bullish about TSLA&#39;s future prospects, but I think the valuation today is overinflated. Nobody can predict the future, but I have no doubt that TSLA will continue to grow its sales YoY.</p><p>The question becomes, how much growth will they be able to achieve YoY? In 2021, TM generated $226.48 billion of revenue and, based on the future of EVs, TSLA certainly could achieve this level of revenue in the future. Based on TSLA&#39;s current 13.51% profit margin, if they achieved TM&#39;s level of revenue, they would generate $30.59 billion of net income, which would definitely make today&#39;s valuation look more realistic.</p><p><img src=\"https://static.tigerbbs.com/93c9176fa9bebc2c940e038cafd23229\" tg-width=\"603\" tg-height=\"631\" referrerpolicy=\"no-referrer\"/></p><p>Tesla</p><p><b>Conclusion</b></p><p>You&#39;re probably wondering how I can be a shareholder and be a bear on TSLA&#39;s valuation at the same time. It&#39;s simple; my wife bought shares of TSLA, which makes me a shareholder. My stance has always been bullish on the company and bearish on the valuation. What Elon Musk and the team at TSLA has accomplished is astonishing, and they deserve nothing but respect.</p><p>Keep in mind a company and a company&#39;s stock are two separate things. TSLA continues to dilute shareholders, and they and the market are valuing TSLA as if it&#39;s FB or GOOGL. TSLA is not a technology company; it&#39;s an automobile company, as the automotive segments drive 100% of its gross revenue and net income.</p><p>TSLA is trading at a P/E of 113.81, a P/S of 15.38, and a 142.52x multiple on its FCF. The numbers are drastically inflated as TSLA has no business trading at a larger P/S multiple than AMZN, which trades at 11.31 P/S when it has grown its revenue by $341.76 billion over the previous 3.25 years compared to TSLA&#39;s $40.73 billion of revenue growth. TSLA has generated $6.93 billion in FCF over the TTM, while Mr. Market has placed a 142.52x multiple on TSLA due to $7.15 billion FCF growth over the past 3.25 years. FB trades at a 15.19x FCF multiple while growing FCF by $23.45 billion over this period which is more than 3x what TSLA has generated in the TTM.</p><p>With FB trading at 15.19x FCF, GOOGL at 23.42x FCF, and AAPL at 25.4x FCF, it&#39;s hard to justify any number above 20x for TSLA. I think a 21x FCF multiple is generous and that places TSLA at a market cap of $145.43 billion, which is -85.26% from its current market cap of $986.92 billion.</p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Tesla: Overvalued By 85.26% And Not A Technology Company</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nTesla: Overvalued By 85.26% And Not A Technology Company\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-05-08 11:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4507535-tesla-overvalued-by-85-26-percent-and-not-a-technology-company><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryMake no mistake, Tesla is a phenomenal company that has accomplished the unthinkable as it broke through extreme barriers of entry to disrupt the auto industry.Just because Tesla is a ...</p>\n\n<a href=\"https://seekingalpha.com/article/4507535-tesla-overvalued-by-85-26-percent-and-not-a-technology-company\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"TSLA":"特斯拉"},"source_url":"https://seekingalpha.com/article/4507535-tesla-overvalued-by-85-26-percent-and-not-a-technology-company","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1131831539","content_text":"SummaryMake no mistake, Tesla is a phenomenal company that has accomplished the unthinkable as it broke through extreme barriers of entry to disrupt the auto industry.Just because Tesla is a successful company that is causing automotive titans to change from combustible engines to EVs doesn't mean Tesla's stock is a good investment today.100% of gross profit and net income is generated from the automotive sector as Tesla's other businesses lose money, making them an automobile manufacturing company, not a technology company.I compared Tesla's metrics to the auto industry and big tech and the results are the same, Tesla's valuation is egregious.It's rare to find companies that have cult-like followings with loyalists willing to pay any price for its stock. The debate regarding Tesla, Inc.'s (NASDAQ:TSLA) valuation continues to be a topic of conversation between the bulls and the bears. Oneside argues that TSLA's financial growth and future prospects, including FSD, insurance, and robotaxis, justify the current $902.12 billion valuations, while others argue that the current financials and cult-like following have led to a massive overvaluation in TSLA's stock.I tip my hat to Elon Musk, as his accomplishments are second to none. When others called him crazy, Mr. Musk chose one of the hardest industries to compete in, started TSLA from the ground up, went to battle against the auto manufacturers, and succeeded. TSLA is one of the rare success stories that has truly shaped an industry, and the barriers of entry that were overcome are astonishing. TSLA didn't have the capital, manufacturing, credibility, or the infrastructure that its competitors did, yet they found a way to succeed. If the odds weren't enough which TSLA faced, they accomplished their goals without a combustible engine and pioneered an entirely new sector within the automotive industry.Just because TSLA is a great company, it doesn't mean TSLA has a great stock, or it isn't overvalued. I am not bearish on TSLA the company because I believe they still have a long runway of growth ahead of them, but I am bearish on the valuation. Prior to leaving a comment on why I am wrong, please read the article and think about the metrics I am citing; then, I will happily discuss any viewpoints about the analysis.Tesla Vs. The World In The Automotive SectorIt feels like TSLA vs. the world whenever TSLA is discussed. Discussing who makes a better automobile is a matter of opinion, and everyone is correct because it's their opinion. If person A thinks TSLA makes the best car and person B thinks Mercedes Benz makes the best car, they are both correct. Debating over this is pointless, so let's look at the raw numbers.TSLA has a larger market cap than the combination ofToyota(TM),Volkswagen(OTCPK:VWAGY),Daimler(OTCPK:DDAIF),BMW(OTCPK:BMWYY),General Motors(GM),Ford(F),Honda(HMC),Ferrari(RACE),Nissan(OTCPK:NSANY),Subaru(OTCPK:FUJHY),Volvo(OTCPK:VOLAF), andMazda(OTCPK:MZDAY). TSLA's market cap is currently $986.92 billion, while the combination of these 12 companies is $777.41 billion.Steven FiorilloThe P/S ratio is often cited to justify the valuation. The combination of TM, VWAGY, DDAIF, BMWYY, GM, F, HMC, RACE, NSANY, FUJHY, VOLAF, and MZDAY has generated $1.38 trillion in revenue over the TTM, putting their P/S at 0.56, while TSLA has generated $62.19 billion in revenue and has a 15.87 P/S.Steven Fiorillo, Seeking AlphaAs a combined entity, these 12 companies have generated $118.29 billion in net income, while TSLA has produced $8.4 billion.Steven Fiorillo, Seeking AlphaTSLA is a great company, but its current valuation has become overly inflated. TSLA's market cap is $209.52 billion larger than these 12 auto manufacturers, yet the combination of the 12 auto manufacturers generates $1.32 trillion more in revenue and $109.89 billion more in net income.Steven Fiorillo, Seeking AlphaLooking at the market caps, one would assume that TSLA has a dominant majority over its competitors in auto sales within the U.S. According to the2021 data, TSLA sold 2.02% of all vehicles in the U.S. TSLA's market cap reflects a level of dominance that is non-existent.Realistically, TSLA will have a hard time disrupting the sector further due to the price point of their vehicles. The reality is that, unless TSLA can sell a car that rivals a Honda or Toyota, doubling its market share is going to be a daunting task. It's just math. TSLA doesn't have a product for the masses, and while it may continue to grow in the luxury segment, the amount of growth that can be achieved is limited due to the pricing power of the consumer.www.goodcarbadcar.netTesla Isn't A Technology Company And Shouldn't Be Valued As OneThe valuation rebuttal has always been that TSLA isn't an automobile company, rather, it's a technology company.TeslaPage 23 ofTSLA's Q1 2022 slide deck from their earnings call is their statement of operations. Once again, 100% of TSLA's gross profit and net income are derived from automobiles. Energy generation and storage lose money as it generates $616 million in revenue while the cost of this revenue is $688 million. The same goes for Services and others, as this segment generates $1.279 billion in revenue while the cost of this revenue is $1.286 billion. This doesn't even factor in operating expenses.TSLA manufacturers state of the art automobiles, but this doesn't classify them as a technology company, nor should they be classified as one. Since this is always the rebuttal and technology companies trade at larger earnings multiples, I will compare TSLA to Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOG) (GOOGL), and Meta Platforms (FB) and illustrate why TSLA is still drastically overvalued if the market was still to provide it with a tech multiple.Prior to the comparisons, I want to frame the analysis by providing each company's market cap:AAPL $2.69 TrillionMSFT $2.17 TrillionGOOGL $1.62 TrillionAMZN $1.28 TrillionTSLA $986.92 BillionFB $604.62 BillionI am going to start with growth because this is always the key metric bulls point out. Since the close of 2018, which is 3.25 fiscal years, TSLA has grown its revenue from $21.46 billion to $62.19 billion.This is absolutely remarkable, but it doesn't place TSLA in the upper epsilon of technology companies. Over the same period, FB grew its revenue by $63.83 billion, which is more than what TSLA produced in the TTM. FB grew its revenue by more than what TSLA produces and generates just about double the revenue ($119.67 billion), yet TSLA has a larger market cap. For everyone who has used growth as their investment premise, FB having a market cap that's $382.30 less than TSLA nullifies that aspect of the bull thesis. AMZN's market cap is only $294.33 billion larger than TSLA, yet they generated $477.75 billion in revenue and grew their revenue by $341.76 billion in this period. Using revenue growth for TSLA doesn't support the valuation.Steven Fiorillo, Seeking AlphaNext, I will turn to profits because, at the end of the day, businesses are in the business of making money. Once again, TSLA has done a fantastic job of monetizing its business and, in 3.25 short years, has gone from losing -$976 million to make $8.4 billion in the TTM for an increase of $9.38 billion. FB has produced $37.34 billion in profit in the TTM, and its net income grew by $15.23 billion over this period. Using growth doesn't support the valuation when FB has a market cap that's $382.30 less than TSLA and grew its profits in this period by almost double what TSLA has generated in the TTM.Steven Fiorillo, Seeking AlphaThe new metric bulls are using in their thesis is TSLA's free cash flow (FCF). Once again, TSLA has done an excellent job, going from -$221 million of FCF in 2018 to $6.93 billion of FCF in the TTM. Many companies would love to grow their annual FCF by $7.15 billion over a 3.25-year period, and this should be applauded.Let's look at FB once again, since TSLA's valuation isn't based on its core segment as an automobile manufacturer. FB has grown its FCF over the previous 3.25 years by $23.45 billion, more than 3x TSLA's growth, and has generated $39.81 billion of FCF in the TTM. FB generated roughly 5.75x more FCF than TSLA and grew its FCF by more than 3x what TSLA produces, yet FB has a market cap that's almost $400 billion less than TSLA. Growth within the financials does not support TSLA's valuation, which is a breath away from $1 trillion.Steven Fiorillo, Seeking AlphaToday you're paying a 113.81 P/E for TSLA. Paying a larger multiple for a company that's growing its earnings quickly is normal, but TSLA isn't growing by larger amounts than FB, and FB trades at a 16.66 P/E. I have seen TSLA bulls justify the P/E because of TSLA's growth factor, but this doesn't hold up when FB has grown by larger amounts from larger starting positions and has a P/E that's a fraction of TSLA. Look at AAPL, which is the largest company in the world. AAPL has grown its net income by $56.25 billion and its FCF by $52.3 billion over the past 3.25 years, and its P/E is 26.78. People are blindly paying any multiple the market places on TSLA.TSLA is trading at a 15.38 P/S. The justification for this multiple is difficult to defend while AMZN trades at a P/S of 11.31. AMZN's revenue grew by $341.76 billion over the past 3.25 years while TSLA grew their revenue by $40.73 billion. Instead of an absolute basis, looking at this from a percentage aspect, TSLA grew its revenue by 189.78%, while AMZN's grew by 251.32%. The P/S ratio is not a supporting valuation metric as TSLA is trading at a larger multiple than AMZN yet produced $301.03 billion less in revenue growth compared to AMZN. At the very least, TSLA should trade at a lower P/S multiple than AMZN considering their revenue growth was a fraction of AMZN's.TSLA has done an excellent job monetizing its revenue, delivering exceptional margins, and generating FCF. Now that TSLA is generating billions in FCF, it's been inserted into the bull thesis. FCF is a measure of profitability that excludes the non-cash expenses of the income statement and includes spending on equipment and assets as well as changes in working capital from the balance sheet. FCF could be the most underrated and most important financial metric to look at, as this is the pool of capital that companies can utilize to repay debt, pay dividends, buy back shares, make acquisitions, or reinvest in the business.Every investment is the present value of all future cash flow. This is why investors look at the price to FCF valuation. Investors want to pay the cheapest multiple for a company's FCF. Today, you're paying 142.52x TSLA's FCF. Going back to the FCF section, TSLA grew its FCF by $7.15 billion over the past 3.25 years. FB generated $23.45 billion of FCF in this period, which is 3x the amount TSLA grew, yet FB is trading at a 15.19x multiple on price to FCF.Why on earth would you want to pay 142.52x for TSLA's FCF when you could pay 15.19x for FB, which is growing their FCF by more than 3x the amount that TSLA is growing by? How about AAPL? AAPL grew its FCF by $52.3 billion and trades at a 25.4x price to FCF. If I exclude FB for a moment, should TSLA trade at a larger FCF multiple than GOOGL, which has grown its FCF by $46.15 billion over the past 3.25 years? My answer is no because there is no guarantee that TSLA will ever generate $46.15 billion in annual FCF, let alone the $68.99 billion in FCF that GOOGL generates.So what is a fair price to FCF multiple for TSLA? I don't believe TSLA has earned the right to trade at the same multiples as the rest of big tech considering the levels of FCF they produce. If I stick with the methodology that FB is egregiously undervalued, then TSLA should trade above 15.19x its FCF but lower than the 23.42x multiple GOOGL trades at.I don't want to be overly bearish, so I will place a 21x multiple on TSLA's FCF, which is more than fair considering big tech metrics. A 21x multiple on TSLA's FCF puts its market cap at $145.43 billion, which is -85.26% from its current market cap of $986.92 billion. It's just math, and if TSLA is going to be valued as a technology company, it needs to be compared to the technology companies with similar market caps.At the very least, there isn't a single reason why TSLA's market cap is larger than FB's. There isn't a single metric that TSLA beats FB in. Based on FB's valuation, if TSLA traded at the same FCF multiple, it would have a market cap of $105.19 billion.TSLA has a gross profit margin of 27.1% ($16.85b / $62.19b) and a profit margin of 13.51% ($8.4b / $62.19b). FB has a gross profit margin of 80.34% ($96.14b / $119.67b) and a profit margin of 31.2% ($37.34b / $119.67b). FB has much wider margins and is growing its revenue by larger amounts. This reinforces my methodology as to why TSLA is grossly overvalued. GOOGL has a gross profit margin of 56.93% ($153.9b / $270.33b) and a profit margin of 27.57% ($74.54b / $270.33b).The chances are incredibly slim that TSLA can double its profit margin to be within striking distance of GOOGL's. TSLA should not trade at a larger FCF, P/E, or P/S multiple than FB or GOOGL. While the market would indicate that I am wrong today, eventually, the hype will wear off, and TSLA will trade at a realistic valuation.TSLA's Future Catalysts Have A Long Way To Go Before Impacting Its Bottom LineThere are three main catalysts people discuss, which include insurance, robotaxis, and FSD.TSLA offers insurance using real-time driving behavior. This is currently available to all Model S, Model 3, Model X, and Model Y owners. The catch is that it's only available in Arizona, Colorado, Illinois, Ohio, Oregon, Texas, and Virginia as of now.TSLA uses a safety rating score to determine the monthly premium for its vehicles. At the largest premium of $130/mo, this would be $1,560 per year. If TSLA converted 100% of their U.S sales in 2021 as an insurance customer, which I think could be possible if TSLA insurance was available in every state, it would have generated $471.12 million in revenue.We have no idea what the margins would have been, but if the margin was 50%, it would have been an additional $235.56 million in net income in 2021. While this is nothing to sneeze at, an additional $235.56 million in net income hardly moves the needle. This could be a $1 billion top-line revenue segment in the future, but with availability in only 7 states, insurance's $1 billion revenue mark is a long way away.TeslaNext,FSD, for which TSLA has created two subscription models, a $99/mo price point and a $199/mo price point. The problem with FSD is that it doesn't make the vehicle fully autonomous, and you still need a driver to be attentive and alert. While I am not arguing that TSLA's FSD isn't leaps and bounds ahead of the competition, the problem is that it's not exactly a self-driving car.The questions around legality and where you can use it pop into my head, and how many of TSLA's drivers opt for this upgrade. Until there is clear legislation and the technology advances to where vehicles can fully drive a person from point A to B while that person takes a nap or reads, I have a hard time believing enough TSLA owners will spend the extra $199/mo on FSD. If there is somewhere where TSLA produces the numbers about how many owners opt for this package, please let me know, and I will crunch the numbers.Which Features Come With My Subscription?The FSD capability features you receive are based on your configuration and location. Not all features are available in all markets, and features are subject to change.Learn more about Autopilot and Full Self-Driving capability features.Note: These features are designed to become more capable over time; however the currently enabled features do not make the vehicle autonomous. The currently enabled features require a fully attentive driver, who has their hands on the wheel and is prepared to take over at any moment.The last catalyst is Robotaxis which many have commented on in my articles before. We're so far off on Robotaxis that this can't be considered in TSLA's upcoming revenue. I would think major legislation would be needed for Robotaxis to exist, and there is no telling how many years away we are from this.Also, what is the percentage of TSLA owners that would actually allow their vehicle to be used as a Robotaxi? Depending on what the profitability is, I can see people buying TSLAs to enroll them in this program, but, once again, we need to see the economics behind it. I know I am just one opinion, but I would never enroll one of my cars into a robotaxi program because I don't want other people that I don't know in my car. I would think there are many others that have similar viewpoints.The real upcoming catalysts are future revenue growth and entering the Chinese market. In 2021 TSLA grew its YoY revenue by 70.67%, and their off to a great start after Q1 2022. Only time will tell what type of growth rate TSLA can maintain, but too many people are assuming that TSLA will obliterate the competition. Over the next several years, we could see TSLA's growth rate become significantly reduced as more luxury operators put EVs on the road.At TSLA's current margins, they would need to increase their revenue by 444.55% to $276.47 billion to produce the same amount of net income ($37.34b) that FB produces today at their current 13.51% profit margin. Maybe TSLA can get there in the future, but why should TSLA be valued at almost $1 trillion today, considering not a single metric of theirs is similar to FB or GOOGL, and TSLA's growth across any of the sectors isn't larger than FB or GOOGL?Tesla Continues To Dilute Shareholders, And Almost No Shareholders CareDilution kills shareholder value. Look, I am a shareholder of TSLA, and I hate that my shares continue to be diluted. These numbers are split-adjusted that I am using. Over the past decade,TSLA has diluted its shares by 80.93%. This is horrible compared to big tech, yet investors can't buy enough TSLA shares. TSLA finished 2012 with 572.6 million shares and, as of its last filing, had increased its outstanding shares to 1.036 billion shares.This is the equivalent of me taking a pizza, and instead of giving you a slice, cutting another 6.5 slices, then giving you one. The pizza represents TSLA, the company, and they basically turned an 8-slice pie into a 14.5-slice pie, reducing shareholder's ownership and the amount of equity, revenue, and EPS our shares represent.If you want to see what a true shepherd of shareholder value looks like, turn to AAPL. In 2012 AAPL had 26.3 billion shares outstanding. Over the past decade, AAPL has repurchased 10.09 billion shares, reducing its outstanding shares by 38.37%. Every quarter, AAPL is buying back shares and increasing the ownership its shares represent. TSLA, on the other hand, continues to dilute shareholders by increasing shares YOY.I Could Be Completely Wrong, And Tesla Could Continue Growing At These RatesTSLA's vehicle deliveries continue to outpace its growing production. YoY TSLA's deliveries increased by 68% in Q1, adding 125,171 delivered vehicles to its customers. TSLA just began Model Y deliveries from the Austin facility, and production at the Gigafactory in Berlin started in March of 2022. TSLA's Shanghai facility had strong production rates prior to the spike in COVID that resulted in temporary shutdowns. TSLA isn't just focusing on the U.S, they have Europe and China in their sights.EVs accounted for 488,000 sales in the U.S for 2021, and the previous projection was that EVs would account for 670,000 units sold in 2022. Oil has hovered around $100 per barrel and could render the previous projections of 37% increased EV sales domestically for 2022 conservative. TSLA is in a prime position to capitalize on this trend. In 2021 TSLA vehicles accounted for 61.89% of EVs sold in the U.S (301,998 / 488,000).Hypothetically, if the previous projection of 670,000 EV sales for 2022 is accurate and TSLA maintains its current margin, they would sell 414,628 vehicles throughout the U.S in 2022. If gas prices do alter the decision-making process when deciding between a combustible engine or an EV, then TSLA could continue surprising the market with QoQ earnings beats.The U.S has a national goal of reaching 50% of domestic auto sales coming from EVs. In 2021, EVs accounted for 3.26% of total sales in the U.S auto market. Based on U.S auto sales in 2021, annual EV sales would need to grow by 6,989,403 to reach a 50% EV to combustible engine ratio. Hypothetically if U.S auto sales stayed flat but EVs reached 50% of the market in 2030 they would sell 7,477,403 vehicles. If TSLA's dominance in the EV sector was to drop from 61.89% to 15% due to increased competition, they would generate 1,121,610 in sales compared to 301,998 in 2021. When you add in Europe and China, TSLA certainly has the ability to become a top auto manufacturer by sales next decade.Bulls aren't incorrect to be excited about TSLA. The world is moving toward EVs, and TSLA is the crème de la crème. As I said in the beginning, I am bullish about TSLA's future prospects, but I think the valuation today is overinflated. Nobody can predict the future, but I have no doubt that TSLA will continue to grow its sales YoY.The question becomes, how much growth will they be able to achieve YoY? In 2021, TM generated $226.48 billion of revenue and, based on the future of EVs, TSLA certainly could achieve this level of revenue in the future. Based on TSLA's current 13.51% profit margin, if they achieved TM's level of revenue, they would generate $30.59 billion of net income, which would definitely make today's valuation look more realistic.TeslaConclusionYou're probably wondering how I can be a shareholder and be a bear on TSLA's valuation at the same time. It's simple; my wife bought shares of TSLA, which makes me a shareholder. My stance has always been bullish on the company and bearish on the valuation. What Elon Musk and the team at TSLA has accomplished is astonishing, and they deserve nothing but respect.Keep in mind a company and a company's stock are two separate things. TSLA continues to dilute shareholders, and they and the market are valuing TSLA as if it's FB or GOOGL. TSLA is not a technology company; it's an automobile company, as the automotive segments drive 100% of its gross revenue and net income.TSLA is trading at a P/E of 113.81, a P/S of 15.38, and a 142.52x multiple on its FCF. The numbers are drastically inflated as TSLA has no business trading at a larger P/S multiple than AMZN, which trades at 11.31 P/S when it has grown its revenue by $341.76 billion over the previous 3.25 years compared to TSLA's $40.73 billion of revenue growth. TSLA has generated $6.93 billion in FCF over the TTM, while Mr. Market has placed a 142.52x multiple on TSLA due to $7.15 billion FCF growth over the past 3.25 years. FB trades at a 15.19x FCF multiple while growing FCF by $23.45 billion over this period which is more than 3x what TSLA has generated in the TTM.With FB trading at 15.19x FCF, GOOGL at 23.42x FCF, and AAPL at 25.4x FCF, it's hard to justify any number above 20x for TSLA. I think a 21x FCF multiple is generous and that places TSLA at a market cap of $145.43 billion, which is -85.26% from its current market cap of $986.92 billion.","news_type":1},"isVote":1,"tweetType":1,"viewCount":93,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":103126444,"gmtCreate":1619758066088,"gmtModify":1704271962292,"author":{"id":"3581675959770023","authorId":"3581675959770023","name":"LaifaLee","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"authorIdStr":"3581675959770023","idStr":"3581675959770023"},"themes":[],"htmlText":"No&nbsp;","listText":"No&nbsp;","text":"No","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/103126444","repostId":"1179123018","repostType":4,"repost":{"id":"1179123018","pubTimestamp":1619746983,"share":"https://ttm.financial/m/news/1179123018?lang=&edition=fundamental","pubTime":"2021-04-30 09:43","market":"us","language":"en","title":"These 2 Stocks Could Send the Market to New Records on Friday","url":"https://stock-news.laohu8.com/highlight/detail?id=1179123018","media":"Motley Fool","summary":"More earnings wins from top tech stocks are powering market sentiment.\nThursday was a solid day for ","content":"<p>More earnings wins from top tech stocks are powering market sentiment.</p>\n<p>Thursday was a solid day for the stock market, with the&nbsp;<b>S&amp;P 500</b>&nbsp;index&nbsp;(SNPINDEX:^GSPC)&nbsp;reaching all-time highs and other indexes coming in closely behind. Investors have never been more confident in the power of an economic recovery for 2021, and they're hoping that despite big market gains already in the past year, there's room for still more movement higher among major market benchmarks.</p>\n<p>If anything can send the market to new records on Friday, it'll be earnings reports from a couple of stocks with exposure to technology.<b>Amazon.com</b>&nbsp;(NASDAQ:AMZN)&nbsp;is a household name worldwide, but investors won't necessarily be as familiar with Australia's&nbsp;<b>Atlassian</b>&nbsp;(NASDAQ:TEAM). Nevertheless, both showed signs of strength and could help build even more positive momentum on Wall Street to finish the week.</p>\n<p><b>How the market did on Thursday</b></p>\n<p>The day was a volatile one, with markets initially climbing on positive economic news. By midday, investors had given back just about all of their daily gains, but more optimism as the afternoon went on ended up pulling the S&amp;P,<b>Nasdaq Composite</b>&nbsp;(NASDAQINDEX:^IXIC), and&nbsp;<b>Dow Jones Industrial Average</b>&nbsp;(DJINDICES:^DJI)&nbsp;all higher.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/7dd6a2b8ea9eca5ebf972110a916a4cc\" tg-width=\"1151\" tg-height=\"331\"><span>DATA SOURCE: YAHOO! FINANCE.</span></p>\n<p><b>Amazon's after-hours ascent</b></p>\n<p>Shares of Amazon didn't do much during Thursday's regular session. But in the after-hours market, the&nbsp;FAANG stock&nbsp;climbed almost 4% as of 5 p.m. EDT following the e-commerce and cloud computing company's quarterly financial report.</p>\n<p>Amazon's numbers were outstanding. Revenue soared 44% to $108.5 billion, with service sales leading the way higher with a 52% year-over-year gain. Net income more than tripled to $8.1 billion, and that produced earnings of $15.79 per share. All of the numbers were well above&nbsp;what most of those following Amazon had expected.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/6eb736194bd9a0e56a5b8273269d2eb5\" tg-width=\"2000\" tg-height=\"1500\"><span>IMAGE SOURCE: GETTY IMAGES.</span></p>\n<p>The thriving e-commerce business makes complete sense given the ongoing COVID-19 pandemic, but the success of Amazon Web Services was also noteworthy. Segment revenue there rose 32%, with operating income getting a 35% boost.</p>\n<p>Founder and CEO Jeff Bezos celebrated the 10th anniversary of Prime Video and the 15th anniversary of Amazon Web Services, and he foresees plenty of upside for them in the future.Amazon has a host of growth opportunities&nbsp;lined up ahead of it, and shareholders have to like what they're seeing from the colossus as it looks forward.</p>\n<p><b>Atlassian wins one for the team</b></p>\n<p>Elsewhere, shares of Atlassian reversed a 3% drop during the regular session by rising almost 7% after hours. The workplace collaboration software platform provider continued to build positive momentum as it released its fiscal third-quarter financial results.</p>\n<p>Atlassian continued to see the benefit of high demand for its services in its quarterly numbers. Third-quarter revenue jumped 38% from the year-ago period, with subscription-based sales soaring at an even faster 43% rate. Atlassian contained costs well, leading to the company reversing its year-earlier loss with earnings of $0.63 per share.</p>\n<p>In particular, cloud migration is playing a huge role in Atlassian's success. The company pointed to data analytics provider&nbsp;<b>Splunk</b>&nbsp;(NASDAQ:SPLK)&nbsp;as just one example of many companies moving to the cloud in order to get more value from Atlassian offerings like Jira and Confluence. Moreover, by working closely with clients, Atlassian is developing the products and services that resonate most with users.</p>\n<p>Atlassian has flown under the radar&nbsp;of many investors, but it's rapidly becoming a massive player in the global cloud services industry. It might never catch up to Amazon, but there's a lot to like in what Atlassian has done so far.</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>These 2 Stocks Could Send the Market to New Records on Friday</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nThese 2 Stocks Could Send the Market to New Records on Friday\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-30 09:43 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2021/04/29/these-2-stocks-could-send-the-market-to-new-record/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>More earnings wins from top tech stocks are powering market sentiment.\nThursday was a solid day for the stock market, with the S&P 500 index (SNPINDEX:^GSPC) reaching all-time highs and other indexes ...</p>\n\n<a href=\"https://www.fool.com/investing/2021/04/29/these-2-stocks-could-send-the-market-to-new-record/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"AMZN":"亚马逊","TEAM":"Atlassian Corporation PLC"},"source_url":"https://www.fool.com/investing/2021/04/29/these-2-stocks-could-send-the-market-to-new-record/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1179123018","content_text":"More earnings wins from top tech stocks are powering market sentiment.\nThursday was a solid day for the stock market, with the S&P 500 index (SNPINDEX:^GSPC) reaching all-time highs and other indexes coming in closely behind. Investors have never been more confident in the power of an economic recovery for 2021, and they're hoping that despite big market gains already in the past year, there's room for still more movement higher among major market benchmarks.\nIf anything can send the market to new records on Friday, it'll be earnings reports from a couple of stocks with exposure to technology.Amazon.com (NASDAQ:AMZN) is a household name worldwide, but investors won't necessarily be as familiar with Australia's Atlassian (NASDAQ:TEAM). Nevertheless, both showed signs of strength and could help build even more positive momentum on Wall Street to finish the week.\nHow the market did on Thursday\nThe day was a volatile one, with markets initially climbing on positive economic news. By midday, investors had given back just about all of their daily gains, but more optimism as the afternoon went on ended up pulling the S&P,Nasdaq Composite (NASDAQINDEX:^IXIC), and Dow Jones Industrial Average (DJINDICES:^DJI) all higher.\nDATA SOURCE: YAHOO! FINANCE.\nAmazon's after-hours ascent\nShares of Amazon didn't do much during Thursday's regular session. But in the after-hours market, the FAANG stock climbed almost 4% as of 5 p.m. EDT following the e-commerce and cloud computing company's quarterly financial report.\nAmazon's numbers were outstanding. Revenue soared 44% to $108.5 billion, with service sales leading the way higher with a 52% year-over-year gain. Net income more than tripled to $8.1 billion, and that produced earnings of $15.79 per share. All of the numbers were well above what most of those following Amazon had expected.\nIMAGE SOURCE: GETTY IMAGES.\nThe thriving e-commerce business makes complete sense given the ongoing COVID-19 pandemic, but the success of Amazon Web Services was also noteworthy. Segment revenue there rose 32%, with operating income getting a 35% boost.\nFounder and CEO Jeff Bezos celebrated the 10th anniversary of Prime Video and the 15th anniversary of Amazon Web Services, and he foresees plenty of upside for them in the future.Amazon has a host of growth opportunities lined up ahead of it, and shareholders have to like what they're seeing from the colossus as it looks forward.\nAtlassian wins one for the team\nElsewhere, shares of Atlassian reversed a 3% drop during the regular session by rising almost 7% after hours. The workplace collaboration software platform provider continued to build positive momentum as it released its fiscal third-quarter financial results.\nAtlassian continued to see the benefit of high demand for its services in its quarterly numbers. Third-quarter revenue jumped 38% from the year-ago period, with subscription-based sales soaring at an even faster 43% rate. Atlassian contained costs well, leading to the company reversing its year-earlier loss with earnings of $0.63 per share.\nIn particular, cloud migration is playing a huge role in Atlassian's success. The company pointed to data analytics provider Splunk (NASDAQ:SPLK) as just one example of many companies moving to the cloud in order to get more value from Atlassian offerings like Jira and Confluence. Moreover, by working closely with clients, Atlassian is developing the products and services that resonate most with users.\nAtlassian has flown under the radar of many investors, but it's rapidly becoming a massive player in the global cloud services industry. It might never catch up to Amazon, but there's a lot to like in what Atlassian has done so far.","news_type":1},"isVote":1,"tweetType":1,"viewCount":179,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":275643017478384,"gmtCreate":1708318368012,"gmtModify":1708318372507,"author":{"id":"3581675959770023","authorId":"3581675959770023","name":"LaifaLee","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"authorIdStr":"3581675959770023","idStr":"3581675959770023"},"themes":[],"htmlText":"I'm k ok f comm&nbsp;","listText":"I'm k ok f comm&nbsp;","text":"I'm k ok f comm","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/275643017478384","repostId":"2412979089","repostType":2,"isVote":1,"tweetType":1,"viewCount":113,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":263686319771760,"gmtCreate":1705412324370,"gmtModify":1705412329278,"author":{"id":"3581675959770023","authorId":"3581675959770023","name":"LaifaLee","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"authorIdStr":"3581675959770023","idStr":"3581675959770023"},"themes":[],"htmlText":"Share your opinion about this news…","listText":"Share your opinion about this news…","text":"Share your opinion about this news…","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/263686319771760","repostId":"2403413870","repostType":2,"isVote":1,"tweetType":1,"viewCount":26,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":244962409058400,"gmtCreate":1700829380842,"gmtModify":1700833393669,"author":{"id":"3581675959770023","authorId":"3581675959770023","name":"LaifaLee","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"authorIdStr":"3581675959770023","idStr":"3581675959770023"},"themes":[],"htmlText":"Great ariticle, would you like to share it?","listText":"Great ariticle, would you like to share it?","text":"Great ariticle, would you like to share it?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/244962409058400","repostId":"1162662325","repostType":2,"repost":{"id":"1162662325","weMediaInfo":{"introduction":"Stock Market Quotes, Business News, Financial News, Trading Ideas, and Stock Research by Professionals","home_visible":0,"media_name":"Benzinga","id":"1052270027","head_image":"https://static.tigerbbs.com/d08bf7808052c0ca9deb4e944cae32aa"},"pubTimestamp":1700710200,"share":"https://ttm.financial/m/news/1162662325?lang=&edition=fundamental","pubTime":"2023-11-23 11:30","market":"us","language":"en","title":"Microsoft Surges To Record Highs, Stock Price Now At 33x Earnings: How Much Further Can It Climb?","url":"https://stock-news.laohu8.com/highlight/detail?id=1162662325","media":"Benzinga","summary":"ZINGER KEY POINTSMicrosoft reaches record-breaking high at $379.79 per share, boasting a year-to-date gain of 58%.Key drivers include leadership in AI, cloud dominance, and strong financial results, b","content":"<html><head></head><body><h4 id=\"id_2652189847\" style=\"text-align: start;\">ZINGER KEY POINTS</h4><ul style=\"list-style-type: disc;\"><li><p>Microsoft reaches record-breaking high at $379.79 per share, boasting a year-to-date gain of 58%.</p></li><li><p>Key drivers include leadership in AI, cloud dominance, and strong financial results, but caution emerges over stretched valuations.</p></li></ul><p><strong>Microsoft Corp. </strong>reached unprecedented heights in its stock performance, touching a new all-time high of $379.79 per share inthe Nov. 22 session.</p><p style=\"text-align: start;\">This impressive performance adds to the tech giant’s stellar year, with a year-to-date gain of 58%, reminiscent of its glory days in 2009 and even reaching levels not seen since 1999.</p><p style=\"text-align: start;\">Market capitalization now stands at a staggering $2.81 trillion, closely trailing<strong> Apple Inc.’s</strong> dominance by a mere $170 billion.</p><h2 id=\"id_3083035716\" style=\"text-align: start;\">Driving Forces Behind Microsoft’s Remarkable Surge</h2><p style=\"text-align: start;\">Several key factors have driven Microsoft’s incredible ascent.</p><p style=\"text-align: start;\">One pivotal development was Microsoft’s emergence as a leader in the world of AI, particularly with its acquisition of OpenAI. This strategic move solidified its position as a key player in the Generative AI era.</p><p style=\"text-align: start;\">Additionally, Microsoft’s dominance in the cloud computing sector, notably through its Azure platform and Office suite, has been a significant contributor to its success. Cloud services continued to be a lucrative growth engine, bolstering the company’s financial performance.</p><p style=\"text-align: start;\">In the third quarter of 2023, Microsoft reported record-breaking revenue of $56.5 billion, slightly surpassing Street’s estimates and marking a substantial 13% increase compared to last year’s same period. Notably, the tech titan also surpassed earnings per share (EPS) expectations, posting $2.99, compared to the anticipated $2.65. This performance also marked an improvement over the previous quarter’s EPS of $2.69.</p><p style=\"text-align: start;\">Goldman Sachs analysts identified Microsoft as one of the most compelling investment opportunities in the tech industry and across sectors.</p><p style=\"text-align: start;\">Wall Street anticipated a further 10% rise in Microsoft’s shares, setting a 1-year median price target at $406.</p><h2 id=\"id_2041313286\" style=\"text-align: start;\">Microsoft’s P/E Ratio: Cautionary Signs Emerge</h2><p style=\"text-align: start;\">Despite the overwhelmingly positive sentiment surrounding Microsoft, certain fundamental and technical indicators raised cautious flags among investors.</p><p style=\"text-align: start;\">While not indicative of extreme concerns, they warrant attention.</p><p style=\"text-align: start;\">Investors might have already priced in a significant portion of the company’s future growth, as Microsoft’s stock prices surged at a faster rate than anticipated earnings.</p><p>Microsoft’s forward price-to-earnings (P/E) ratio, which assessed the current stock price relative to projected earnings over the next 12 months, has risen to 33x.</p><p style=\"text-align: start;\">Although this figure is not far from previous highs of 34x reached in July and the multi-decade highs of 37x seen at the end of 2021, it was worth noting a higher forward P/E ratio often implied a relatively expensive valuation.</p><p style=\"text-align: start;\">Over the past two decades, Microsoft’s forward P/E ratio typically averaged around 20x-23x. While the current valuation was undoubtedly on the expensive side, it had not yet reached bubble territory. During the dot-com bubble of the late 1990s, Microsoft’s price-to-earnings ratio exceeded a staggering 80x.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/ae3e21ef9a24fc53a79dd6af0230238c\" tg-width=\"1024\" tg-height=\"529\"/></p><h2 id=\"id_2690828955\" style=\"text-align: start;\">Technical Indicators Screen Bearish RSI Divergence</h2><p style=\"text-align: start;\">Technical indicators, such as the Relative Strength Index (RSI), were also sending cautionary signals.</p><p style=\"text-align: start;\">The RSI oscillated in and out of the overbought zone, crossing the 70 mark at times, which could indicate a potential overextension in the stock’s price.</p><p style=\"text-align: start;\">The question on investors’ minds now was whether it was time to lock in some profits, before a potential pullback. Over the past year, Microsoft experienced temporary pullbacks accompanied by what is known as a “bearish RSI divergence.</p><p style=\"text-align: start;\">This divergence occurred when the stock’s price set new highs while the RSI declined from prior highs.</p><p style=\"text-align: start;\">Typically, this signals a weakening of bullish momentum and can trigger profit-taking behavior among investors. As of today’s closing, Microsoft might be showing signs of another bearish RSI divergence.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/5d990eb9975dbd179c0ba56a7eba7fe6\" tg-width=\"1024\" tg-height=\"521\"/></p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Microsoft Surges To Record Highs, Stock Price Now At 33x Earnings: How Much Further Can It Climb?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMicrosoft Surges To Record Highs, Stock Price Now At 33x Earnings: How Much Further Can It Climb?\n</h2>\n\n<h4 class=\"meta\">\n\n\n<div class=\"head\" \">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://static.tigerbbs.com/d08bf7808052c0ca9deb4e944cae32aa);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Benzinga </p>\n<p class=\"h-time\">2023-11-23 11:30</p>\n</div>\n\n</div>\n\n\n</h4>\n\n</header>\n<article>\n<html><head></head><body><h4 id=\"id_2652189847\" style=\"text-align: start;\">ZINGER KEY POINTS</h4><ul style=\"list-style-type: disc;\"><li><p>Microsoft reaches record-breaking high at $379.79 per share, boasting a year-to-date gain of 58%.</p></li><li><p>Key drivers include leadership in AI, cloud dominance, and strong financial results, but caution emerges over stretched valuations.</p></li></ul><p><strong>Microsoft Corp. </strong>reached unprecedented heights in its stock performance, touching a new all-time high of $379.79 per share inthe Nov. 22 session.</p><p style=\"text-align: start;\">This impressive performance adds to the tech giant’s stellar year, with a year-to-date gain of 58%, reminiscent of its glory days in 2009 and even reaching levels not seen since 1999.</p><p style=\"text-align: start;\">Market capitalization now stands at a staggering $2.81 trillion, closely trailing<strong> Apple Inc.’s</strong> dominance by a mere $170 billion.</p><h2 id=\"id_3083035716\" style=\"text-align: start;\">Driving Forces Behind Microsoft’s Remarkable Surge</h2><p style=\"text-align: start;\">Several key factors have driven Microsoft’s incredible ascent.</p><p style=\"text-align: start;\">One pivotal development was Microsoft’s emergence as a leader in the world of AI, particularly with its acquisition of OpenAI. This strategic move solidified its position as a key player in the Generative AI era.</p><p style=\"text-align: start;\">Additionally, Microsoft’s dominance in the cloud computing sector, notably through its Azure platform and Office suite, has been a significant contributor to its success. Cloud services continued to be a lucrative growth engine, bolstering the company’s financial performance.</p><p style=\"text-align: start;\">In the third quarter of 2023, Microsoft reported record-breaking revenue of $56.5 billion, slightly surpassing Street’s estimates and marking a substantial 13% increase compared to last year’s same period. Notably, the tech titan also surpassed earnings per share (EPS) expectations, posting $2.99, compared to the anticipated $2.65. This performance also marked an improvement over the previous quarter’s EPS of $2.69.</p><p style=\"text-align: start;\">Goldman Sachs analysts identified Microsoft as one of the most compelling investment opportunities in the tech industry and across sectors.</p><p style=\"text-align: start;\">Wall Street anticipated a further 10% rise in Microsoft’s shares, setting a 1-year median price target at $406.</p><h2 id=\"id_2041313286\" style=\"text-align: start;\">Microsoft’s P/E Ratio: Cautionary Signs Emerge</h2><p style=\"text-align: start;\">Despite the overwhelmingly positive sentiment surrounding Microsoft, certain fundamental and technical indicators raised cautious flags among investors.</p><p style=\"text-align: start;\">While not indicative of extreme concerns, they warrant attention.</p><p style=\"text-align: start;\">Investors might have already priced in a significant portion of the company’s future growth, as Microsoft’s stock prices surged at a faster rate than anticipated earnings.</p><p>Microsoft’s forward price-to-earnings (P/E) ratio, which assessed the current stock price relative to projected earnings over the next 12 months, has risen to 33x.</p><p style=\"text-align: start;\">Although this figure is not far from previous highs of 34x reached in July and the multi-decade highs of 37x seen at the end of 2021, it was worth noting a higher forward P/E ratio often implied a relatively expensive valuation.</p><p style=\"text-align: start;\">Over the past two decades, Microsoft’s forward P/E ratio typically averaged around 20x-23x. While the current valuation was undoubtedly on the expensive side, it had not yet reached bubble territory. During the dot-com bubble of the late 1990s, Microsoft’s price-to-earnings ratio exceeded a staggering 80x.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/ae3e21ef9a24fc53a79dd6af0230238c\" tg-width=\"1024\" tg-height=\"529\"/></p><h2 id=\"id_2690828955\" style=\"text-align: start;\">Technical Indicators Screen Bearish RSI Divergence</h2><p style=\"text-align: start;\">Technical indicators, such as the Relative Strength Index (RSI), were also sending cautionary signals.</p><p style=\"text-align: start;\">The RSI oscillated in and out of the overbought zone, crossing the 70 mark at times, which could indicate a potential overextension in the stock’s price.</p><p style=\"text-align: start;\">The question on investors’ minds now was whether it was time to lock in some profits, before a potential pullback. Over the past year, Microsoft experienced temporary pullbacks accompanied by what is known as a “bearish RSI divergence.</p><p style=\"text-align: start;\">This divergence occurred when the stock’s price set new highs while the RSI declined from prior highs.</p><p style=\"text-align: start;\">Typically, this signals a weakening of bullish momentum and can trigger profit-taking behavior among investors. As of today’s closing, Microsoft might be showing signs of another bearish RSI divergence.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/5d990eb9975dbd179c0ba56a7eba7fe6\" tg-width=\"1024\" tg-height=\"521\"/></p></body></html>\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"MSFT":"微软"},"source_url":"","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1162662325","content_text":"ZINGER KEY POINTSMicrosoft reaches record-breaking high at $379.79 per share, boasting a year-to-date gain of 58%.Key drivers include leadership in AI, cloud dominance, and strong financial results, but caution emerges over stretched valuations.Microsoft Corp. reached unprecedented heights in its stock performance, touching a new all-time high of $379.79 per share inthe Nov. 22 session.This impressive performance adds to the tech giant’s stellar year, with a year-to-date gain of 58%, reminiscent of its glory days in 2009 and even reaching levels not seen since 1999.Market capitalization now stands at a staggering $2.81 trillion, closely trailing Apple Inc.’s dominance by a mere $170 billion.Driving Forces Behind Microsoft’s Remarkable SurgeSeveral key factors have driven Microsoft’s incredible ascent.One pivotal development was Microsoft’s emergence as a leader in the world of AI, particularly with its acquisition of OpenAI. This strategic move solidified its position as a key player in the Generative AI era.Additionally, Microsoft’s dominance in the cloud computing sector, notably through its Azure platform and Office suite, has been a significant contributor to its success. Cloud services continued to be a lucrative growth engine, bolstering the company’s financial performance.In the third quarter of 2023, Microsoft reported record-breaking revenue of $56.5 billion, slightly surpassing Street’s estimates and marking a substantial 13% increase compared to last year’s same period. Notably, the tech titan also surpassed earnings per share (EPS) expectations, posting $2.99, compared to the anticipated $2.65. This performance also marked an improvement over the previous quarter’s EPS of $2.69.Goldman Sachs analysts identified Microsoft as one of the most compelling investment opportunities in the tech industry and across sectors.Wall Street anticipated a further 10% rise in Microsoft’s shares, setting a 1-year median price target at $406.Microsoft’s P/E Ratio: Cautionary Signs EmergeDespite the overwhelmingly positive sentiment surrounding Microsoft, certain fundamental and technical indicators raised cautious flags among investors.While not indicative of extreme concerns, they warrant attention.Investors might have already priced in a significant portion of the company’s future growth, as Microsoft’s stock prices surged at a faster rate than anticipated earnings.Microsoft’s forward price-to-earnings (P/E) ratio, which assessed the current stock price relative to projected earnings over the next 12 months, has risen to 33x.Although this figure is not far from previous highs of 34x reached in July and the multi-decade highs of 37x seen at the end of 2021, it was worth noting a higher forward P/E ratio often implied a relatively expensive valuation.Over the past two decades, Microsoft’s forward P/E ratio typically averaged around 20x-23x. While the current valuation was undoubtedly on the expensive side, it had not yet reached bubble territory. During the dot-com bubble of the late 1990s, Microsoft’s price-to-earnings ratio exceeded a staggering 80x.Technical Indicators Screen Bearish RSI DivergenceTechnical indicators, such as the Relative Strength Index (RSI), were also sending cautionary signals.The RSI oscillated in and out of the overbought zone, crossing the 70 mark at times, which could indicate a potential overextension in the stock’s price.The question on investors’ minds now was whether it was time to lock in some profits, before a potential pullback. Over the past year, Microsoft experienced temporary pullbacks accompanied by what is known as a “bearish RSI divergence.This divergence occurred when the stock’s price set new highs while the RSI declined from prior highs.Typically, this signals a weakening of bullish momentum and can trigger profit-taking behavior among investors. As of today’s closing, Microsoft might be showing signs of another bearish RSI divergence.","news_type":1},"isVote":1,"tweetType":1,"viewCount":114,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"lives":[]}