Dear Reader,
Tesla, the electric vehicle manufacturer, is valued by public markets at 807.8 billion USD.
I estimate Tesla is grossly overvalued. Tesla is barely profitable and trades at Price/Earnings and Price/Sales multiples several times other major car manufacturers.
I believe Tesla could be worth no more than 120 billion USD once the current stock market bubble bursts. Money creation by central banks aided by retail investors' investments in "dream to possess" stocks like Tesla and Apple has lead Tesla to reach valuations that can only be justified if the company somehow achieves global automobile market share of 80 % with 20 % net profit margin. Other luxurious sedan car makers selling more automobiles than Tesla like BMW and Daimler currently boast net profit margins of no more than 10 % even in spectacular quarterly reports. Audi, part of Volkswagen, exhibits similar numbers.
In short, to justify its current valuation Tesla should simply break into other industries or have almost the whole automotive market for itself which is a real stretch of the imagination.
I could easily see Tesla worth no more than 120 billion USD 7 years from now.
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
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