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Category: Tesla (TSLA)
Date: 23 May 2021 Stock price of Tesla (TSLA): $580.88 Market Capital of Tesla (TSLA): $559.6 billion We have warned a couple times on our website over the last couple of months that the stock of Tesla (TSLA) is overvalued and is due a sharp correction. While the stock price has pulled back significantly we believe there is still a lot of pain to come for Tesla shareholders. We take a look at the latest support and resistance levels and what we believe the stock of Tesla is actually worth.
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If you currently own Tesla our advice is to get out while you can and take your profits (if you made some). And if you are planning in buying Tesla now, our advice is to rather not. Based on Tesla (TSLA) 4th quarter 2021 earnings report we value the stock of Tesla at $69.30. Since the stock of Tesla is trading at well above our target price we rate the stock of Tesla (TSLA) as a SELL"
More About Tesla (TSLA)
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Why we believe Tesla (TSLA) is undervalued
So why do we believe the stock of Tesla (TSLA) is overvalued?
Well let's start with its Price to Earnings Ratio (PE)
Next lets take a look at Tesla's Price/Stockholders equity per share ratio
Lets take a look at the production numbers of Tesla:
4th quarter 2020 production numbers compared to 4th quarter of 2019
Model description December 2020 December 2019 Year on year percentage change
So total production numbers increased strongly compared to the same quarter of the previous year which is some good news for Tesla stockholders. But their production numbers will have to increase at least 5 fold for their current stock price levels to be justified.
Come on people. Surely after reading this you will realise that Tesla (TSLA) stock is one big fat bubble that has sucked in a lot of investors all hoping to get rich from the continuing surge in its stock price. These type of people are created by excess cash in markets. And some of the Covid-19 stimulus cheques have found their way into the stock market and definitely into Tesla's stock and has driven up the stock price of Tesla to levels it should definitely not be at
If you currently own Tesla our advice is to get out while you can and take your profits (if you made some). And if you are planning in buying Tesla now, our advice is to rather not. Based on Tesla (TSLA) 4th quarter 2021 earnings report we value the stock of Tesla at $69.30. Since the stock of Tesla is trading at well above our target price we rate the stock of Tesla (TSLA) as a SELL
Well let's start with its Price to Earnings Ratio (PE)
- Earnings per share for 4th quarter 2020: $080
- PE ratio of Tesla: 161
- What this is saying you are paying $161 for every $1 profit Tesla makes. So if you buying Tesla at $580 a stock. Just know for a full year the firm is likely to make $3.60 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?
Next lets take a look at Tesla's Price/Stockholders equity per share ratio
- Stockholders equity in Tesla: $22.2 billion
- Stockholders equity per share in Tesla: $19.80
- Tesla is trading at 29.2 times its stockholders equity per share, which is well outside the expected range of between 2 and 5 times that most firms tend to trade at.
- If Tesla were to sell all their assets, settle all their liabilities and distribute what is left equally amongst its stockholders each stockholder will receive $19.80 a stock. So does the $580 stock price still look like a good investment?
Lets take a look at the production numbers of Tesla:
4th quarter 2020 production numbers compared to 4th quarter of 2019
Model description December 2020 December 2019 Year on year percentage change
- Model S/X 16 097 17 933 -10%
- Model 3/Y 163 660 86 958 88%
- Total 179 757 104 891 71%
So total production numbers increased strongly compared to the same quarter of the previous year which is some good news for Tesla stockholders. But their production numbers will have to increase at least 5 fold for their current stock price levels to be justified.
Come on people. Surely after reading this you will realise that Tesla (TSLA) stock is one big fat bubble that has sucked in a lot of investors all hoping to get rich from the continuing surge in its stock price. These type of people are created by excess cash in markets. And some of the Covid-19 stimulus cheques have found their way into the stock market and definitely into Tesla's stock and has driven up the stock price of Tesla to levels it should definitely not be at
If you currently own Tesla our advice is to get out while you can and take your profits (if you made some). And if you are planning in buying Tesla now, our advice is to rather not. Based on Tesla (TSLA) 4th quarter 2021 earnings report we value the stock of Tesla at $69.30. Since the stock of Tesla is trading at well above our target price we rate the stock of Tesla (TSLA) as a SELL
Tesla (TSLA) stock price chart over the last 5 years
The image below shows the stock price history of Tesla (TSLA) over the last 5 years. And its been an incredible time for the stock of Tesla (TSLA). With the stock of Tesla returning 1232% to Tesla stockholders over the last 5 years. And thats with the recent sharp decline in the stock price of Tesla. No investor would say no to those kind of returns.
Support and resistance levels for Tesla (TSLA) stock
So where is Tesla (TSLA) current support and resistance levels? Based on monthly pivot points the support and resistance levels of Tesla's stock is as follows.
- Resistance 3: $895.05
- Resistance 2: $837.92
- Resistance 1: $773.68
- Pivot Point: $716.55
- Support 1: $652.31
- Support 2: $595.18
- Support 3: $530.94
So currently Tesla is below the pivot point which is a indication that the sentiment and momentum of Tesla's stock is negative. And Tesla has fallen through two of the three resistance levels. It will find support at $530 but should it fall below $530 there is at least another 10% decline that Tesla stockholders should brace for.. Should the stock of Tesla attempt a recovery it will find resistance at $595 and $652 (as its trading below these support levels, breaking above these levels might be met with some resistance.
We continue to be of the view that Tesla is valued around $70 a stock and would not recommend investing in it at this point in time.
We continue to be of the view that Tesla is valued around $70 a stock and would not recommend investing in it at this point in time.
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