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Why Tesla stock is vastly overpriced

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Re: Why Tesla stock is vastly overpriced

#21

Post by shyn3 »

ashtonkem wrote: post #15
kerng wrote: post #10

Earlier quoted context omitted.

Tesla is the innovator in this space for 10+ years. Only a few of the companies are all in on electric- and 10 years from now there will be no new old school cars. Some of them have even giant liabilities because of the mess to the environment they have created, which also damaged their brand. Some of them probably wouldn't even exist anymore was it not for government backing/looking away and in some cases even inter…

The only way for the stock price to be reasonable is if Tesla completely replaces all of the listed car companies combined. That is not realistic, no matter what you think of Tesla’s products.

I think they will all die because they are too far to innovate it's why I finally bought shares after the split [1].

[1] https://news.ycombinator.com/item?id=25214484

Re: Why Tesla stock is vastly overpriced

#22

Post by pjdemers »

TSLA owns all its dealerships, distributors, and importers. It is more vertically integrated, designing and manufacturing more of their own parts. What is the sum of the business value of all the traditional automakers dealers, distributors, importers, parts companies, etc? I'll bet its in the trillions. Now, that said, I would not buy TSLA stock at its current price

Re: Why Tesla stock is vastly overpriced

#23

Post by [deleted] »

wutbrodo wrote: post #17
banjomet wrote: post #11

The only way to justify the valuation of Tesla is to assume that they do something that doesn't depend on individual customer sales, because those aren't ramping up at the right rate. I think they are about to launch an autonomous taxi service. Here is a good example of Elon Musk talking about how robotaxis are going to push up the price[0]. So far nobody has talked about Tesla operating their own robotaxi service. […

Their strategy hasn't been L5 at all, and they can't have invested in it so secretly that even those in the AV space (like me) wouldn't know about it, through talent exchange at the very least. AV is a pretty small world at the moment.

[deleted]

Re: Why Tesla stock is vastly overpriced

#24

Post by gamblor956 »

mattnewton wrote: post #16
sb057 wrote: post #9

Here's a two-second method to determine whether TSLA is overpriced: currently, their market cap is $659B. The combined caps of Toyota, Volkswagen, Mercedes-Benz, Porsche, BMW, Honda, General Motors, Ford, and Nissan is only $629B. So unless Tesla is worth $30 billion more than all of those companies combined, either those companies are undervalued, or Tesla is massively overvalued. Keep in mind, Tesla sold 367,500 ca…

I too think tesla is overvalued, but your comparison to ICE companies strikes me as missing that they have fundamentally different technologies those other companies are no where near developing on their own and will likely have to license. Tesla investors are betting that a lot of the ICE based car expertise will be worth just pennies on the dollar if the shift to electric cars happens en masse.

What fundamentally different technologies do you believe they are nowhere near developing?

Multiple other manufacturers already make and sell EVs, in some cases outselling Tesla in their home territories.

Moreover, while Tesla assembles their own batteries, the underlying battery cells are made for them by Panasonic, which owns the IP to the chemistry. (Tesla's IP relates to the assembly, referring both to the process and the finished battery product.)

And that IP is only valuable until the inevitable switch to solid-state batteries, which have significantly more capacity and durability than anything on the market today. And other automotive companies have already acquired exclusive licenses to the most (commercially) promising research.

Re: Why Tesla stock is vastly overpriced

#25

Post by pazimzadeh »

sb057 wrote: post #9

Here's a two-second method to determine whether TSLA is overpriced: currently, their market cap is $659B. The combined caps of Toyota, Volkswagen, Mercedes-Benz, Porsche, BMW, Honda, General Motors, Ford, and Nissan is only $629B. So unless Tesla is worth $30 billion more than all of those companies combined, either those companies are undervalued, or Tesla is massively overvalued. Keep in mind, Tesla sold 367,500 ca…

What your analysis is missing is the profit margin of each car maker. Never mind market share, what is Tesla's profit share? Does someone know this?

Re: Why Tesla stock is vastly overpriced

#26

Post by ksec »

sb057 wrote: post #9

Here's a two-second method to determine whether TSLA is overpriced: currently, their market cap is $659B. The combined caps of Toyota, Volkswagen, Mercedes-Benz, Porsche, BMW, Honda, General Motors, Ford, and Nissan is only $629B. So unless Tesla is worth $30 billion more than all of those companies combined, either those companies are undervalued, or Tesla is massively overvalued. Keep in mind, Tesla sold 367,500 ca…

>their market cap is $659B.

WOW. I knew their stock price has been like a rocket but I dont follow them closely. ( They were over priced ages ago ).

But $660B! Shouldn't that make Elon Musk the richest person on earth? I remember he owns 20% of Tesla?

Edit: Turns out Jeff Bezos [1], even after the divorce settlement , has a net worth of ~$187B. Elon is at $146B. Until SpaceX's IPO at ~$100B [2], which will add roughly $54B to his net worth... he will be the richest on Earth.

I mean I dont know how Tesla is a $600B company, but I sure as hell think SpaceX is worth a lot more than $100B.

[1] https://www.forbes.com/sites/sergeiklebnikov/2020/12/19/elon...

[2] https://www.forbes.com/sites/daviddawkins/2020/10/23/elon-mu...

Re: Why Tesla stock is vastly overpriced

#27

Post by fakedang »

shyn3 wrote: post #21
ashtonkem wrote: post #15

Earlier quoted context omitted.

The only way for the stock price to be reasonable is if Tesla completely replaces all of the listed car companies combined. That is not realistic, no matter what you think of Tesla’s products.

I think they will all die because they are too far to innovate it's why I finally bought shares after the split [1]. [1] https://news.ycombinator.com/item?id=25214484

Or maybe you're trying to rationalize your investment thesis after buying into the stock.

- Sincerely, a TSLA hodler since summer 2019, when I bought my first car, a Tesla.

I'll be holding the stock I have, but I don't think traditional car companies are going away any time soon. On the contrary, I'm thinking of getting a Taycan, a BMW or some other EV car.

Tesla isn't overpriced per se, but once the spigot of cheap debt and printed money stops, we might see a good decline from the stock market. Not that I'm going to bet against the market either.

Re: Why Tesla stock is vastly overpriced

#28

Post by Cu3PO42 »

ksec wrote: post #26
sb057 wrote: post #9

Here's a two-second method to determine whether TSLA is overpriced: currently, their market cap is $659B. The combined caps of Toyota, Volkswagen, Mercedes-Benz, Porsche, BMW, Honda, General Motors, Ford, and Nissan is only $629B. So unless Tesla is worth $30 billion more than all of those companies combined, either those companies are undervalued, or Tesla is massively overvalued. Keep in mind, Tesla sold 367,500 ca…

>their market cap is $659B. WOW. I knew their stock price has been like a rocket but I dont follow them closely. ( They were over priced ages ago ). But $660B! Shouldn't that make Elon Musk the richest person on earth? I remember he owns 20% of Tesla? Edit: Turns out Jeff Bezos [1], even after the divorce settlement , has a net worth of ~$187B. Elon is at $146B. Until SpaceX's IPO at ~$100B [2], which will add roughl…

Not the richest, but the second richest according to current estimates. Second to Jeff Bezos only, who also massively increased his wealth this year.

https://www.forbes.com/real-time-billionaires/ (I had to disable essentially all content blockers to get this site to load.)

Re: Why Tesla stock is vastly overpriced

#29

Post by gamblor956 »

banjomet wrote: post #11

The only way to justify the valuation of Tesla is to assume that they do something that doesn't depend on individual customer sales, because those aren't ramping up at the right rate. I think they are about to launch an autonomous taxi service. Here is a good example of Elon Musk talking about how robotaxis are going to push up the price[0]. So far nobody has talked about Tesla operating their own robotaxi service. […

Anyone who thinks they are going to use their private car as a robotaxi doesn't understand how much they're going to spend on maintenance and insurance.

EVs may cost less to maintain their ICEs, but they still have moving parts that need to be replaced.

And taxi insurance is quite expensive; it's one of the reasons that driving for Uber/Lyft is a losing proposition for most of their drivers even before they take vehicle wear-and-tear into account. For autonomous driving, for a company with the worst safety record for AI-driving in the industry, that insurance may cost more than their combined insurance costs for everything else combined (i.e., house, healthcare, other cars, etc.).

Re: Why Tesla stock is vastly overpriced

#30

Post by fakedang »

SilasX wrote: post #8
CydeWeys wrote: post #6

Well that's a garbage take. This guy fundamentally doesn't seem to understand what an index is. The S&P 500 doesn't (well, shouldn't) make value judgments about the quality of the companies in it. It's just the 500 largest companies on US exchanges. That's what people who use it want. Really, the big problem here was that it wasn't already included on the S&P 500 years ago, so that all of the gains leading up to this…

Passive investors could have bought a broader market index than the S&P 500.

The S&P 500 indices far outweigh other indices in the ETF space. Other ETFs tend to be for more risky domains. I agree with GP, Tesla should have been included way back, during the first jump to 250.
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