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Category: Apple (APPL), Tesla (TSLA), Amazon (AMZN), Boston Beer Company (SAM), Domino's Pizza (DPZ)
Date: 3 September 2020 So as the title states. We take a look at 5 companies that we believe are heavily overvalued and would not advise investors to buy into any of these shares at their current stock price. The stocks in question are Apple, Amazon, Tesla, Boston Beer Company and Domino's Pizza.
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Despite the challenges of the COVID-19 global pandemic, we were still able to achieve a strong start to the year "
1. Apple (APPL)
Stock price of Appl: $131.40
Apple is one of the worlds biggest smartphone and related accessories makers with the group manufacturing the iPhone, iPad, Macbook (laptops for those that don't know), Apple Watch and other related products and services. The group is starting to focus more and more on their services offering such as cloud services for their device users and services such as iTunes.
Apple sales by product type and category for the 2nd quarter of 2020:
Our latest stock valuation of Apple: $60.13
Based on our stock valuation the stock of Apple is overvalued by
Apple sales by product type and category for the 2nd quarter of 2020:
- iPhone $28.962 billon (down -6.7% from $31.051billion for the same quarter of the previous year)
- Mac: $5.351 billion (down -2.9% from $5.513 billion for the same quarter of the previous year)
- iPad: $4.368 billion (down -10.3% from $4.872 billion for the same quarter of the previous year)
- Wearables, Home and Accessories: $6.284 billion (up 22.5% from $5.129 billion for the same quarter of the previous year)
- Services: $13.348 billion (up 16.6% from $11.450 billion for the same quarter of the previous year)
Our latest stock valuation of Apple: $60.13
Based on our stock valuation the stock of Apple is overvalued by
2. Amazon (AMZN)
Stock price of AMZN: $3531.45
Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Fire tablets, Fire TV, Amazon Echo, and Alexa are some of the products and services pioneered by Amazon.
Quick facts about Amazon
Our latest stock valuation of Amazon (AMZN): $1480.20
Based on our stock valuation the stock of Amazon is overvalued by 138.6%
Quick facts about Amazon
- Net sales of Amazon in 2019: $280.522 billion
- Total value of Amazon's assets: $225.248 billion
- Cash and equivalents of Amazon: $10.4 billion
- Cash provided by operating activities during 2019: $38.514 billion
- Amazon marketing expenses amounted to $13.814 billion in 2019
- Amazon's technology and content development costs in 2019 were: $28.837 billion
- As at end of December 2019, Amazon employed 798 000 full time employees
- Seasonal fluctuations of Amazon. The 4th quarter Amazon sees the highest sales with it having contributed (34%, 31% and 31% of total sales for the 2017, 2018 and 2019 fiscal years)
- As a 22 January 2020, the group has 3 192 shareholders of their common stock
Our latest stock valuation of Amazon (AMZN): $1480.20
Based on our stock valuation the stock of Amazon is overvalued by 138.6%
Tesla (TSLA)
Stock price of TSLA: $447.37
We design, develop, manufacture and sell high-performance fully electric vehicles (“EVs”) and energy generation and storage systems, and also install and maintain such energy systems and sell solar electricity. We are the world’s first vertically integated sustainable energy company, offering end-toend clean energy products, including generation, storage and consumption. We have established and continue to grow a global network of stores, galleries, vehicle service centers, Mobile Service technicians, body shops, Supercharger stations and Destination Chargers to accelerate the widespread adoption of our products, and we continue to develop self-driving capability in order to improve vehicle safety. Our sustainable energy products, engineering expertise, intense focus to accelerate the world’s transition to sustainable energy, and business model differentiate us from other companies.
We currently produce and sell three fully electric vehicles: the Model S sedan, the Model X sport utility vehicle (“SUV”) and the Model 3 sedan. All of our vehicles offer high performance and functionality as well as attractive styling. We commenced deliveries of Model S in June 2012 and have continued to improve Model S by introducing performance, all-wheel drive dual motor, and Autopilot options, as well as free over-the-air software updates. We commenced deliveries of Model X in September 2015. Model X offers seating for up to seven people, all-wheel drive, and our Autopilot functionality. We commenced deliveries of Model 3, a lower-priced sedan designed for the mass market, in July 2017, and we have significantly ramped its production. We are now embarking on the delivery of Model 3 in international markets and are focusing on lowering manufacturing costs while continuing to increase its production rate. We also intend to bring additional all-electric vehicles to market in the future, including Model Y, the Tesla Semi truck, a pickup truck and a new version of the Tesla Roadster.
Quick facts about Tesla:
Our latest stock valuation of Tesla (TSLA): $43.30
Based on our stock valuation the stock of Tesla is overvalued by 933%
We currently produce and sell three fully electric vehicles: the Model S sedan, the Model X sport utility vehicle (“SUV”) and the Model 3 sedan. All of our vehicles offer high performance and functionality as well as attractive styling. We commenced deliveries of Model S in June 2012 and have continued to improve Model S by introducing performance, all-wheel drive dual motor, and Autopilot options, as well as free over-the-air software updates. We commenced deliveries of Model X in September 2015. Model X offers seating for up to seven people, all-wheel drive, and our Autopilot functionality. We commenced deliveries of Model 3, a lower-priced sedan designed for the mass market, in July 2017, and we have significantly ramped its production. We are now embarking on the delivery of Model 3 in international markets and are focusing on lowering manufacturing costs while continuing to increase its production rate. We also intend to bring additional all-electric vehicles to market in the future, including Model Y, the Tesla Semi truck, a pickup truck and a new version of the Tesla Roadster.
Quick facts about Tesla:
- Tesla is listed on the Nasdaq under share code ticker: TSLA
- Tesla has 48 817 employees
- Revenue for 2Q 2020: $6.03 billion
- Automotive gross margin in 1Q 2020: 25.4%
- Earnings per share for 2nd quarter 2020: $0.50
- PE ratio of Tesla: 1000
- What this is saying you are paying $1000 for every $1 profit Tesla makes. So if you buying Tesla at $2000 a stock. Just know for a full year the firm is likely to make $2 a stock in profits. So do you honestly believe Tesla is still a good investment? Or that that type of return is a good investment?
- Shares in issue: 207 million
- Cash and equivalents on balance sheet: $8.61 billion
- Operating margin for Tesla: 5.4%
- Stockholders equity in Tesla: $9.855 billion
- Stockholders equity per share in Tesla: $47.60 (pre split). $9.52
- Tesla is trading at 42 times its stockholders equity per share, which is well outside the expected range of between 2 and 4 times that most firms tend to trade at.
Our latest stock valuation of Tesla (TSLA): $43.30
Based on our stock valuation the stock of Tesla is overvalued by 933%
4. Boston Beer Company (SAM)
Stock price of SAM: $855.11
The Boston Beer Company, Inc. (NYSE: SAM) began in 1984 brewing Samuel Adams beer and the Samuel Adams brand is currently recognized as one of the largest and most respected craft beer brands. Our portfolio of brands also includes Angry Orchard Hard Cider, Twisted Tea, Truly Hard Seltzer, Wild Leaf Hard Tea and Tura Alcoholic Kombucha as well as other craft beer brands such as Angel City Brewery, Coney Island Brewing, and Concrete Beach Brewery. On July 3, 2019, the Company completed its previously reported Dogfish Head Brewery transaction. Dogfish Head has a proud history as a craft beer pioneer with a brand that is beloved by American consumers and highly respected by the industry.
Quick facts about Boston Beer Company (SAM) which all refers to fiscal year end 2019:
Our latest stock valuation of Boston Beer Company (SAM): $388.90
Based on our stock valuation the stock of Boston Beer Company is overvalued by 119.8%
Quick facts about Boston Beer Company (SAM) which all refers to fiscal year end 2019:
- Boston Beer Company is listed on the New York Stock Exchange under share code ticker: SAM
- Owns Samuel Adams
- Owns Dogfish Head
- Owns Twisted Tea
- Sales for 2019 fiscal year: $1.249 billion
- 2 128 employees as at end December 2019
- Earnings per share of Boston Beer Company in 2019 fiscal year: $9.16
- Shares in issue: 11.908 million
- Number of stockholders: 8 477
- Number of barrels sold: 5 307
- Net revenue per barrel: $235.51
Our latest stock valuation of Boston Beer Company (SAM): $388.90
Based on our stock valuation the stock of Boston Beer Company is overvalued by 119.8%
5. Domino's Pizza (DPZ)
Stock price of DPZ: $403.60
Founded in 1960, Domino’s Pizza is the largest pizza company in the world based on retail sales, with a significant business in both delivery and carryout pizza. It ranks among the world’s top public restaurant brands with a global enterprise of more than 16,300 stores in over 85 markets. Domino’s had global retail sales of over $13.5 billion in 2018, with nearly $6.6 billion in the U.S. and more than $6.9 billion internationally. In the second quarter of 2019, Domino’s had global retail sales of over $3.2 billion, with over $1.6 billion in the U.S. and over $1.6 billion internationally. Its system is comprised of independent franchise owners who accounted for 98% of Domino's stores as of the second quarter of 2019. Emphasis on technology innovation helped Domino’s achieve more than half of all global retail sales in 2018 from digital channels.
In the U.S., Domino’s generates over 65% of sales via digital channels and has developed several innovative ordering platforms, including Google Home, Facebook Messenger, Apple Watch, Amazon Echo and Twitter – as well as Domino’s HotSpots®, an ordering platform featuring over 200,000 unique, non-traditional delivery locations. In late 2017, Domino’s began an industry-first test of self-driving vehicle delivery, and in June 2019 announced a partnership with Nuro, furthering its exploration and testing of autonomous pizza delivery.
Quick facts about Domino's Pizza
Our latest stock valuation of Domino's Pizza (DPZ): $209.40
Based on our stock valuation the stock of DPZ is overvalued by 92.7%
In the U.S., Domino’s generates over 65% of sales via digital channels and has developed several innovative ordering platforms, including Google Home, Facebook Messenger, Apple Watch, Amazon Echo and Twitter – as well as Domino’s HotSpots®, an ordering platform featuring over 200,000 unique, non-traditional delivery locations. In late 2017, Domino’s began an industry-first test of self-driving vehicle delivery, and in June 2019 announced a partnership with Nuro, furthering its exploration and testing of autonomous pizza delivery.
Quick facts about Domino's Pizza
- Domino's Pizza is listed on the New York Stock Exchange under share code ticker: DPZ
- Domino's Pizza market capital: $14.8 billion (as at 12 June 2020)
- Number of employees of Domino's: 13 100
- Number of stores in the USA: 6 126
- Revenues in 2019: $3.62 billion
- Earnings per share in 2019: $9.56
- Shares in issue: 40.776 million
- Dividends paid during 2019: $2.60
- Cash on balance sheet: $190.6 million
Our latest stock valuation of Domino's Pizza (DPZ): $209.40
Based on our stock valuation the stock of DPZ is overvalued by 92.7%
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