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Category: Tesla (TSLA)
Date: 21 December 2020 Stock price of Tesla (TSLA): $665.88 We take a look at the stock price performance of Tesla (TSLA) on the first day of its inclusion in the S&P 500. In early trade the stock declined to $652 but has since recovered slightly to $665, still down 4% for the day. We still believe Tesla's stock is horribly overpriced and is not a good investment to make at its current price.
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- 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 $14.60 a stock. So does the $665 stock price still look like a good investment? "
More About Tesla (TSLA)
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 integrated 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.
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 3Q 2020: $8.74 billion
- Net income for 3Q 2020: $874 million
- Shares in issue: 1.1 billion
- Operating margin: 9.2%
- Cash and cash equivalents: $14.531 billion
- Cash per share: $13.10
- Cash and equivalents as percentage of Tesla market capital: 3.1%
3rd quarter 2020 production numbers compared to 3rd quarter of 2019
Model description September 2020 September 2019 Year on year percentage change
Model S/X 16 922 16 318 4%
Model 3/Y 128 044 79 837 60%
Total 145 036 96 155 51%
Outlook provided by Tesla
Volume : We have the capacity installed to produce and deliver 500,000 vehicles this year. While achieving this goal has become more difficult, delivering half a million vehicles in 2020 remains our target. Achieving this target depends primarily on quarter over quarter increases in Model Y and Shanghai production, as well as further improvements in logistics and delivery efficiency at higher volume levels
Cash Flow: We should have sufficient liquidity to fund our product roadmap, long-term capacity expansion plans and other expenses
Profit: For the trailing 12 months, we achieved an operating margin of 6.3%. We expect our operating margin will continue to grow over time, ultimately reaching industry-leading levels with capacity expansion and localization plans underway
Product: We are currently building Model Y capacity at Gigafactory Shanghai, Gigafactory Berlin and Gigafactory Texas, and remain on track to start deliveries from each location in 2021. Tesla Semi deliveries will also begin in 2021. We continue to significantly invest in our product roadmap.
Stock price of Tesla (TSLA) today, 21 December 2020
The image below, obtained from Google shows the early morning trade of Tesla (TSLA) on its first day as part of the S&P 500 and its not been a good day for the stock so far. But it has recovered from the low it hit in early morning trade. We do however still believe that the stock of Tesla is grossly overvalued and we would not recommend any investor buy into it at its current price
Why we believe the stock of Tesla (TSLA) is overvalued
So why do we believe the stock of Tesla (TSLA) is overvalued?
Well let's start with its Price to Earnings Ratio (PE)
Earnings per share for 3rd quarter 2020: $0.76
Next lets take a look at Tesla's Price/Stockholders equity per share ratio
Stockholders equity in Tesla: $16.03 billion
Lets take a look at the production numbers of Tesla:
3rd quarter 2020 production numbers compared to 2nd quarter of 2019
Model description September 2020 September 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. 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 3rd quarter 2020: $0.76
- PE ratio of Tesla: 229
- What this is saying you are paying $229 for every $1 profit Tesla makes. So if you buying Tesla at $422 a stock. Just know for a full year the firm is likely to make $1.8 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: $16.03 billion
- Stockholders equity per share in Tesla: $14.60
- Tesla is trading at 28.9 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.
- 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 $14.60 a stock. So does the $422 stock price still look like a good investment?
Lets take a look at the production numbers of Tesla:
3rd quarter 2020 production numbers compared to 2nd quarter of 2019
Model description September 2020 September 2019 Year on year percentage change
- Model S/X 16 922 16 318 4%
- Model 3/Y 128 044 79 837 60%
- Total 145 036 96 155 51%
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. We rate the stock of Tesla (TSLA) as a SELL
Next earnings release of Tesla (TSLA)
It is expected that Tesla (TSLA) will release their 4th quarter 2020 earnings report in late January 2021
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