Tesla stock price
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Jim Matthews
Active Member
Tesla Price to Earnings is near 90 (each dollar the company earned per share is valued at 90 dollars) which is astronomical.
Caterpillar - a profitable, stable company with strong fundamentals and a favorable position in the global marketplace trades at a P/E under 20.
Tesla is *not* in financial difficulty. That (unfortunately) has little to do with the price of stock.
Caterpillar - a profitable, stable company with strong fundamentals and a favorable position in the global marketplace trades at a P/E under 20.
Tesla is *not* in financial difficulty. That (unfortunately) has little to do with the price of stock.
R P
Well-Known Member
Why do you think the stock is going down? Is it the markets or Elon? I never did suggest it is the company performance. They keep exceeding expectations after every qtrly report.
I do have an opinion, but don't want to influence others at this point.
Jim Matthews
Active Member
Why is the stock going down?
I'm suspicious that institutional investors manipulate prices for their own benefit, buying on margin calls. That's divorced from the performance of the actual company, its cash reserves or prospects.
I'm suspicious that institutional investors manipulate prices for their own benefit, buying on margin calls. That's divorced from the performance of the actual company, its cash reserves or prospects.
ITown
Active Member
I think there are a few factors at play, but the #1 factor is industry-wide, IMO. Look up the stock performance of other US automaker stocks:
Tesla:
GM:
Ford:
Admittedly, the shapes are different, because Tesla has the distinction of being a bit of a "meme stock" - where people buy it because of the name and not for reasons tied to the fundamentals of the company.
However, you can see here that Tesla's performance in the past 6 months is actually very much in line with Ford and GM. However, the movements each day are significantly more volatile - it shoots up and down much faster in a single day than Ford or GM's stocks.
And let's be clear - Tesla's financial position is not vastly superior to Ford's or GMs. None of the three companies are under any financial duress right now.
Q1 2022 Earnings:
Ford: $0.37 EPS (4.03B shares): profit = $1.49B (only this low because Rivian's stock price dropped)
GM: $2.09 EPS (1.47B shares): profit = $3.07B
Tesla: $3.22 EPS (1.036B shares): profit = $3.33B
Tesla:
GM:
Ford:
Admittedly, the shapes are different, because Tesla has the distinction of being a bit of a "meme stock" - where people buy it because of the name and not for reasons tied to the fundamentals of the company.
However, you can see here that Tesla's performance in the past 6 months is actually very much in line with Ford and GM. However, the movements each day are significantly more volatile - it shoots up and down much faster in a single day than Ford or GM's stocks.
And let's be clear - Tesla's financial position is not vastly superior to Ford's or GMs. None of the three companies are under any financial duress right now.
Q1 2022 Earnings:
Ford: $0.37 EPS (4.03B shares): profit = $1.49B (only this low because Rivian's stock price dropped)
GM: $2.09 EPS (1.47B shares): profit = $3.07B
Tesla: $3.22 EPS (1.036B shares): profit = $3.33B
Last edited:
ITown
Active Member
Overall, my conclusion is that Tesla is still vastly overvalued, and the past few months have done nothing to address that. IMO, Tesla's stock price should be closer to $200 to be reasonably priced.
And let's be clear - $200/share is still like 4x GM's valuation - despite the two companies having near-identical income.
And let's be clear - $200/share is still like 4x GM's valuation - despite the two companies having near-identical income.
R P
Well-Known Member
So basically you guys are saying it is the markets going down, affecting almost everything (except oil). And had nothing to do with Elon Musk and Twitter. I agree with the former, but I think the latter is also having an effect. Tesla just got kicked out of the S&P ESG Index. That means a lot to larger institutional funds incl pension funds, etc.
TSLA still has a high PE, but that is nothing new. And if anything its long term growth prospects and profitably have increased lately. So it is not the company. But if you want to compare companies, you can't ignore this:
TSLA - book value = $29.22/share, PE= 90
GM - book value = 39.83, PE= 5.8
F- book value = 11.77, PE= 4.4
The diff is what the markets perceive in TSLA's future value and performance. Once growth companies become profitable, their stocks often drop some, until eventually the growth and profitability and value come to equilibrium. That's called maturity (PE 20-30 X earnings at high end) and what happened to once other growth companies like Facebook (now 13.7), Google (20.2), Intel (6.9), etc, etc. Where TSLA ends up, who knows. Elon Musk doesn't look like he intends to slow down with his ambitions.
TSLA still has a high PE, but that is nothing new. And if anything its long term growth prospects and profitably have increased lately. So it is not the company. But if you want to compare companies, you can't ignore this:
TSLA - book value = $29.22/share, PE= 90
GM - book value = 39.83, PE= 5.8
F- book value = 11.77, PE= 4.4
The diff is what the markets perceive in TSLA's future value and performance. Once growth companies become profitable, their stocks often drop some, until eventually the growth and profitability and value come to equilibrium. That's called maturity (PE 20-30 X earnings at high end) and what happened to once other growth companies like Facebook (now 13.7), Google (20.2), Intel (6.9), etc, etc. Where TSLA ends up, who knows. Elon Musk doesn't look like he intends to slow down with his ambitions.
ITown
Active Member
If Tesla starts under-performing compared to the other automakers, I'll revise my assessment about Tesla. Certainly Twitter has plenty of people who dislike Tesla, but they aren't the ones who influence Tesla's stock price anyway. I do think historically the "meme stock" status of Tesla has insulated it from stock price hits that hurt other companies. If anything, I'm speculating that the "meme stock" benefit could be fading as a result of Elon's antics.
R P
Well-Known Member
It's Elon they dislike, and not just the meme guys. It's the institutions that can only buy ESG stocks.
Source: https://insideevs.com/news/587586/us-tesla-luxury-brands-registrations-2022q1/
Bob Wilson
Almost all brands noted difficulties and supply constraints, which caused a massive decrease in deliveries. One exception is Genesis (part of the Hyundai Motor Group), but it's still a small player.
Registrations* in the US - Q1 2022:
Obviously Tesla is doomed. Doomed I say:Registrations* in the US - Q1 2022:
- Tesla: 113,882 (up 59%) and 21.8% share
- BMW: 80,482 (down 3%)
- Lexus: 66,907 (down 17%)
- Mercedes-Benz: 60,632 (down 21%)
- Audi: 37,566 (down 37%)
- Cadillac: 29,840 (down %)
- Acura: 29,260 (down 26%)
- Volvo: 23,513 (down 20%)
- Lincoln: 19,977 (down 29%)
- Land Rover: 15,581 (down 39%)
- Porsche: 13,262 (down 24%)
- Genesis: 12,549 (up 53%)
- Infiniti: 11,740 (down 43%)
- Alfa Romeo: 3,542 (down 32%)
- Jaguar: 2,610 (down 36%)
- Total: 521,343 (down 12%)
- * registrations data and estimates
Bob Wilson
I don’t have any TSLA shares for sale since selling four shares earlier this year for $1,024 each.
I don’t worry about daily share price unless I am buying or selling. But since you asked.
My expectation is $60/share which is what I bought mine for. Inflation adjusted, $90/share.
Bob Wilson
I don’t worry about daily share price unless I am buying or selling. But since you asked.
My expectation is $60/share which is what I bought mine for. Inflation adjusted, $90/share.
Bob Wilson
R P
Well-Known Member
Is it dropping mostly because of short selling (and piling on by Musk haters) or long time investors losing faith in the stock and selling? I know with higher interest rates, and a cooling car market, plus not too mention more EV competition coming, there is a lot of pressure on high PE and negative earnings car stocks. And Tesla's book value is still below $10, well below GM's, and even Ford. But at some point there has to be a floor. Where is that?
Ok. It has to get down to $20-30 per share and I sell it before I take a loss.
To deal with the near tripling of Fed interest rates, I sold a chunk at $230/share.
Bob Wilson
To deal with the near tripling of Fed interest rates, I sold a chunk at $230/share.
Bob Wilson
R P
Well-Known Member
Musk said this morning he is vowing not to sell any more shares for 2 years. Will see if that halts the slide. But when has he kept a promise before?
With the year end promo he is trying to pull orders into 2022 to make the full year report look better. That might look good for a while, but won't help the outlook for 2023. And it is forward guidance that influences stocks the most.
But to his personal benefit, he did well with selling when the stock was higher. However, insider selling also does not bode well for future stock prices. They know more than the avg investor.
With the year end promo he is trying to pull orders into 2022 to make the full year report look better. That might look good for a while, but won't help the outlook for 2023. And it is forward guidance that influences stocks the most.
But to his personal benefit, he did well with selling when the stock was higher. However, insider selling also does not bode well for future stock prices. They know more than the avg investor.
R P
Well-Known Member
They announced today further plant production delays, so that isn't helping. Musk, as he has done before, is trying to pull forward year end sales with incentives to make the qtr as good as possible. Problem is that the stock previously was priced as a high tech growth company. Now it is looking more like a mature auto company, and investors are treating it accordingly. Stock price is always based on the future outlook, and with all the competition coming, does not look good for TSLA.
I am wondering if their move to LFP is hurting them, too, with the poor performance of those batteries in cold weather.
I am wondering if their move to LFP is hurting them, too, with the poor performance of those batteries in cold weather.
Well I think the stock is clearly overpriced, and it's starting to be reflected in the stock price in its downward spiral.
I also think that Tesla is going to have to lower the price of their cars if they expect to meet their sales goals. That's going to get reflected in the price of the stock too. At least one analyst and Elon himself thinks the cars will have see a price decrease.
I think if they lower the price of the Model 3 and Model Y by $5,000 and bring out a standard range Model Y at around $45,000. The competition is going to crap their pants. I don't think the competition is the main threat. It's the price of the car.
I also think that Tesla is going to have to lower the price of their cars if they expect to meet their sales goals. That's going to get reflected in the price of the stock too. At least one analyst and Elon himself thinks the cars will have see a price decrease.
I think if they lower the price of the Model 3 and Model Y by $5,000 and bring out a standard range Model Y at around $45,000. The competition is going to crap their pants. I don't think the competition is the main threat. It's the price of the car.
R P
Well-Known Member
If they really want to get back at the competition, need to bring out a cheap, smaller and maybe lower range model. If GM can do it with the Bolt (although not low range), why can't Tesla. The high margins with the 3 and Y are coming to an end. Time to have another alternative.
I think that Semi (just not feasible) and Cybertruck are not going to help Tesla, probably cause them to lose money.
I think that Semi (just not feasible) and Cybertruck are not going to help Tesla, probably cause them to lose money.