I am a Long Term TSLA bull. There are many critics saying that TSLA PE ratio is overvalued now at 64.72. However as we know TSLA is a growth company as such the sales to earnings ratio is more accurate in valuing the company which currently stands at only 8.48 times that of sales. Also TSLA is the most profitable EV company in the industry. It has a strong earnings performance growth and has a stable 5 year earnings trend. See table below:
5-Year EPS
12/18 12/19 12/20 12/22 12/22
EPS -0.44 -0.02 0.61 1.68 3.73
EPS % Growth
4.46% -96.49% -4094.26% 174.37% 121.83%
5-Year Revenue
12/18 12/19 12/20 12/21 12/22
Revenue (M)
21,461.27 24,578.00 31,536.00 53,823.00 81,462.00
Rev % Growth
82.51% 14.52% 28.31% 70.67% 51.35%
Price
Source: ChaikinAnalytics
Other than the strong financial performance lets also look at what is happening now at the auto industry recently & why it us benefitting TSLA. TSLA is not a unionised company. Meanwhile we have seen workers at Stellantis, GM & Ford the big 3 US automakers striking costing them tens of millions of dollars. On the business side TSLA's penetrating into the truck market with its cybertruck should be a major catalyst in the next 6 months with it reportedly having a pre-order of 2 millions in the books.
Moreover in terms of infrastructure TSLA has the charging stations that even companies like GM & Honda said they will be using TSLA's charging stations.
TSLA can also be argued not to be a solely EV company with it all the AI in the pipeline like self- driving vehicles & also Elon has string other companies he owns Starlink, SpaceX,X(twitter). Imagine if these companies were going public-my guess TSLA will ride the waves too...
The Nasdaq 100(QQQ) is up about 35% this year & TSLA is up 110% this year; more than 3 times that of QQQ. This happened without any major announcements no new vehicles launching in short no new catalysts.
However if the market sells off, being a high beta stock-will sell off along the market. But should the Nasdaq rally 10% - 20% over the next years, is not unreasonable to expect TSLA to rally 2 or 3 times more in the same period based on past performance.
in conclusion I know TSLA us not cheap with its PE towering above 60 but as in my previous post, Im a firm believer of you get what you paid for & cheap does not necessarily means you got your money's worth. It is no surprise that JPM has upgraded the target price of TSLA to $400. TSLA may not hit $300 in the upcoming earnings release due in tandem with market outlook. However the future looks good at target price beyond $300.
Modify on 2023-10-17 16:37
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TSLA is in the same group as the magnificent 7. in general. I forsee the price will fall if there is market sell off, as we know there are lots of negative impulse in the market, undesolved wars, rate hikes that is not going to be paused, & of course factors affecting TSLA specific like reduction in price, not meeting target deliveries etc etc. Competitos I think TSLA is the market leader, even if you combine all the auto companies, their sales is no where near TSLA. However based on expectstions of things in the pipeline, Elon & TSLA may be well received & the prce can just sky rockets. Conversely, there are companies that met earnings target yet share price falls. Is all about market sentiment. Goodluck to all .
TSLA needs to hold above $250! A snap below and I’d expect the $247.5 gap to fill. I’m currently long following BOT.
something new everyday against tesla but this stock still has tons of support. however, today and tomorrow is crucial. it will be a deciding factor whether the 280+ margin can be reached in the next few months or not.🙏🏻
Nah, that's not the way to go, my friend. ER’s will be very bad due to poor sale numbers which has already been shown and competitors taking away massive market share. Sell before we fall hard!
The earnings recession may be over. Or, in Tesla's case, lined up to surprise.