Tesla Inc (TSLA)
Fun Fact
- Tesla has the honor of being the 2nd oldest publicly listed automaker in the US. The oldest is Ford.
- Detroit, Michigan is the heart of America’s automotive industry. But Tesla operates out of Silicon Valley in California.
- Elon Musk is currently the face of Tesla. This has driven people to assume that he created Tesla. But the actual founders are Marc Tarpenning and Eric Eberhard.
Tesla, Inc. engages in the design, development, manufacture, and sale of fully electric vehicles, energy generation, and storage systems. It also provides vehicle service centers, supercharger stations, and self-driving capability. TSLA is a constituent stock of the Nasdaq 100.
Stock Valuation (TTM 12 Mths to Jun 20)
Price /Earning | 855X. Very, very expensive. Vs average PE of S&P 29.46X & Nasdaq 27.26X.
Price /Book | 31.16X. Expensive. Vs average PB of S&P 3.87X & Nasdaq 3.72X.
Dividend Yield | Nil. Didn't pay any dividend. Vs average DY of S&P 1.74% & Nasdaq 1.45%.
Net Income | USD 368M (From USD 659M loss YoY)
Cash & Equivalents | USD 8.6B (+74% YoY)
LT Debt | USD 9.3B (-6.2% YoY)
Free Cashflow | USD 3.6b (-3.8% YoY)
Analyst Consensus
Target Price | USD 300.23
Call | Neutral
Technical Analysis
Uptrend. Support USD 256, resistance USD 509.
Conclusion
The valuation is not cheap but can consider buying.
TSLA traded split adjusted on 31 Aug (5 for 1 split, ie, 1 existing shares becomes 5 shares). A stock split has no economic implications or bearing on the value of the stock. It has a gross profit margin of 19% & turned profit last quarter. 2Q20 EPS of USD 0.44 beats analyst estimate by USD 0.47. The analyst forecast for 3Q20 EPS is USD 0.55.
TSLA fell the worst –21% on Mon due to non-inclusion in S&P 500 index despite meeting criteria. The situation is similar to Facebook (FB) previously.
Like AAPL previous few post-split patterns. After the immediate aftermath of the split, the stock tended to settle down briefly before continuing whatever trend it had seen before the stock split announcement. The business turning profitable & higher earnings forecast are also factors to consider.
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