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Company founder and CEO Elon Musk may not mention Tesla Motors Inc's (TSLA.O) stock price when his electric car company gives its latest financial update on Wednesday, but it will be front and center for investors divided over its seemingly rich valuation.
After a rally that ended in April, Tesla's market capitalization is currently about $31 billion - equivalent to $620,000 for every car it delivered last year, or $63,000 for every car it hopes to produce in 2020.
By comparison, General Motors Co's (GM.N) $48 billion market value is equivalent to about $4,800 for every vehicle it sold last year.
Tesla's heady valuation - about 125 times the next 12 months of expected earnings - and the implication that shareholders may be overpaying for Musk's small but fast-growing luxury car company have made the stock a favorite of short sellers.
Source: Reuters
(Score: 3, Insightful) by Phoenix666 on Thursday May 05 2016, @01:41PM
People who only look at Tesla's sales and pre-order numbers to value the stock are missing the bigger picture. Elon Musk is a deep, strategic thinker. He's several steps ahead of everyone else in the industry. When he was building the roadster, his naysayers were carping, "Nice car, pal, but where you gonna plug it in? Who's gonna sit around for hours waiting for their car to charge?" So when they announced the Model S, they also simultaneously announced the supercharger network to shut those people the hell up, and announced that the supercharger network was powered by solar panels to shut up the jackasses who would inevitably come along and whine that the supercharger network was only shifting the fossil fuel load to coal-fired powerplants. Musk has founded another company, Solar City, to provide the residential solar angle. He's building a battery Gigafactory to supply all the vehicles he means to build, thus avoiding the bottleneck that will hobble all his competitors. Meanwhile, that factory will churn out home energy storage batteries to go along with the solar panels that Solar City is supplying. That's all the context around Tesla, the car company.
Inside the car company, you have an outfit that sends over-the-air software upgrades to help people who have already bought the cars get more range out of their existing batteries, find other recharging locations that are not on the supercharger network, and to enable "ludicrous mode" for people that want to accelerate 0-60 in 2.8 seconds and blow every other car off the road. You have rapid battery swapping stations for people who don't want to wait 30 minutes for a recharge. You have battery upgrades on existing cars. So even just within the car context, they're many leaps ahead of their competitors.
I think when you consider all that, that stock valuation doesn't seem so outlandish. I know when I invested in Tesla, it wasn't for the cars so much as that strategic mind. Honestly I am kind of surprised the oil industry or the auto execs in Detroit haven't had him assassinated yet.
Washington DC delenda est.