Saturday, August 22, 2020

Tesla's P/E Ratio Moves Past The Thousand Mark

Only Thing Hotter Than The Car Is the Stock
Tesla's valuation seems a bit over the moon considering on Friday it closed for the second time over $2,000. With the stock at a whopping P/E ratio of 1,066 times earnings, Tesla sports a market cap of over 373 billion dollars. Those of us without a great love for Tesla or Elon Musk see this as the poster child of absurdity. By comparison, Volkswagen, which sold over 10 million vehicles last year has a market cap of $82 billion and auto giant Toyota around $218 billion. Simply put, Tesla’s market cap has risen 244% this year while the market cap of the industry, excluding Tesla, is down 17%.

In normal times Tesla would most likely be a company only visible in the rear-view mirror. The value of Tesla's stock dramatically changed years ago following the report where it made its first quarterly profit, its market value soared to more than $10 billion. A large part of the increase in the stock price occurred because people that had short positions in the stock were squeezed into buying back their stock. This is something that has happened time and time again causing speculation that the company plays fast and loose with the numbers it reports.
 http://brucewilds.blogspot.com/2017/02/elon-musk-and-tesla-motors-overview.html

3 comments:

  1. Tesla's valuation seems a bit over the moon considering on Friday it closed for the second time over $2,000. With the stock at a whopping P/E ratio of 1,066 times earnings, Tesla sports a market cap of over 373 billion dollars. remove the word whopping, and put in "Ludicrous++"

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  2. Have many of you seen the musical: "The Music Man" from 1962. Robert Preston plays the Elon Musk in it. Watch the finale, like TSLA you've got to laugh: https://www.youtube.com/watch?v=ODu888i14-I For all of those investing in TSLA at PE of 1060/ I deeply hope Elon's visions come true.
    I sold my shares this morning. I couldn't take the stress anymore at my elderly age. Back to reading Kindle Books, walking in the garden, and driving into town for a banana-boat at the Dairy Queen.

    I won't short the stock, I don't want to risk the chance. I'll just watch the news and smile. It was a nice ride while it lasted, and walking away with two 2022 Roadsters is enough for me.

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  3. Tesla's market capitalization at the start of trade today is 401,270,000,000. They sold 90,650 vehicles in Q2 of 2020.

    Do the math: that's a stock value of $4.42 million per car sold last quarter, or at an annualized rate of 1/4 of that, $1.106 million per SALE for 2020, if sales in the other quarters average out to the same as in Q2.

    That's what happens when the Fed tosses $3 trillion of money into the stock market in a few months. It's like gasoline tossed on a campfire, it burns very brightly for a very short time, but is gone in a flash.

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