As more investors have been interested in the American electric
vehicle and clean energy company, Tesla, the risk factor is still unclear to
most of them. Tesla, Inc. designs, develops, manufactures, and sells electric cars
and energy storage products for home and solar grid usage. It operates
primarily in the US, China, and Norway, as well as many other countries.
On August 11, 2020,the historical
daily share price, and data for Tesla (TSLA) have been adjusted for a split,
while the latest closing stock of December 11, 2020, was $609.99. On December 8,
2020, the all-time high Tesla stock closing price was $649.88. The stock’s
52-week high price was $654.32, which is 7.3% above the current share
price, while the lowest was $70.10, which is 88.5% below its average price. The
average within the same period was $261.73, while Tesla’s P/E ratio was 1259.18
on December 11, 2020.
)TSLA annual stock price(
In a move that could trigger a collective of approximately
$73 million in new purchases, S&P announced that it will add Tesla shares
to the S&P500 on December 21, 2020. Tesla’s stock price has risen more than
57% since the November 16 announcement, and the S&P500 has increased by
How Tesla is Doing Compared to other Car Manufacturers
The P/E ratio is not enough for the comparison between Tesla
and its competitors. In fact, the comparison requires taking a closer look at the
enterprise value of EBITDA ratio and the price to sales ratio. These ratios are
indicated in the chart below of Tesla and other major automakers like Toyota,
General Motors, and Luxury carmaker BMW.
The competitors have sold vastly more cars than Tesla, even
BMW, the smallest by the market cap, delivered 675,680 cars in the third
quarter, nearly five times higher.
How Tesla is Doing Compared to other Tech Companies
As we mentioned previously, Tesla is not just a carmaker, it
is a tech company. For that reason, when comparing the price to sales ratio
with other hot stocks in the tech sector, such as Nio, Zoom Video
Communication, Shopify, and Nvidia Corp, Tesla’s stock valuation becomes more reasonable
TSLA stock has clearly run up too fast too soon. The
company is aiming to be much bigger in the future. However, it will need to grow
at a faster pace in order to justify the current share price. Tesla’s investors
are more speculative at the current time, and the stock is heavily influenced
by emotions, thus it is bound to be very volatile.
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