Tesla First Quarter 2020 Earnings Analysis

Dear Reader,

Tesla posted a 16 million USD profit in the first quarter 2020 on 5.985 billion USD in revenue.

16 million USD is a tiny amount on  5.985 billion USD in revenue. However, Tesla does not make a profit on an yearly basis and is not profitable on four rolling quarters. The great thing about Tesla's earnings report is that Q1 2020 revenue of  5.985 billion USD is up 31.80% on a Q1 2019 revenue of 4.541. For a company that is making billions of revenue a quarter, that is a staggering growth of revenue. That is why today in before market hours trading Tesla was up a lot. Tesla's current market capitalization amounts to 148.39 billion USD at 806 USD

I estimate Tesla's current intrinsic value to be around 50 billion USD which implies a stock market price of 272 USD.  The main reason for my comparatively low estimation of Tesla is that it is not profitable. Tesla is growing its revenue very fast, but the company still makes almost no money. What is more, other automobile manufacturers like Ford, GM, Volkswagen, Toyota are trading at much lower Price/Sales ratios.

Tesla will survive if it becomes really profitable. I know Amazon has so far pulled the trick of making almost no money and prospering. However, through cloud services Amazon has already figured a way to make money which slashed its Price/Earnings ratio by half. Today's market will not forgive losses for long.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Stocks that Could Benefit From Coronavirus

Dear Reader,

The world is in the midst of unprecedented coronavirus disease COVID-19 economic lockdown.

But some sectors and companies are faring better than others. Information Technology, Healthcare and Utilities sectors are outperforming year to date.

Information Technology companies outperform because now most people work from home, shop from home, watch TV, stream movies and play electronic games more. Healthcare companies are benefiting from the increased demand mainly for influenza medicines, along with many other healthcare products, since due to the increased stress the population is likely to get sick more often. Utilities are benefiting from increased demand for water, electricity and gas as the many people working from home consume more from basic products like water and electricity.

Companies likely to benefit are Amazon, Zoom Video, Microsoft, Zynga, Take Two Interactive, Electronic Arts, Pfizer, Eli Lilly, Johnson and Johnson, Astra Zeneca, Brystol-Myers Squibb, Nextera Energy, Dominion Energy, Duke Energy etc.

However, I doubt the current rally in stocks in general is sustainable. I expect global stock market indices to fall more than 40% from current levels in the next 2-3 years. Technology stocks, especially will not hold their gains and relative better performance, I think. Companies like Amazon, Apple, Microsoft, Tesla, AMD, Netflix are simply grossly overvalued. By not less than 30%.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich