It was a dizzying year for investors in Tesla (NASDAQ: TSLA). On the one hand, the December level of almost USD 480 seems to be a distant memory, and Tesla’s shares have dropped by 33%since then.
On the other hand, wrestling still drive high from a long -term perspective. In fact, it is currently 77% higher than a year ago.
I wonder if he can return to USD 480 and a little higher to break $ 500 – and should I invest?
A lot of emotions, not financial rationality
Some shares are largely transferred to the financial foundations. If the company releases a profit warning, its participation is rained. When the sale increases, the price of the shares increases.
Tesla is different. Many movements in wrestling seem only loose (if at all) related to financial results. They result from investors’ views on what the company can achieve in the future, sometimes far in the future. I think that in some cases there is a fair dose of emotions, not rationality.
Take the role of the Chief Director as an example. How much was collapsed if it was traveled by a bus tomorrow (or Tesla self -legged)?
My guess is that it is a crater. This itself means a huge risk of a key man in this action. Many values ​​are attached to the company’s current leadership, not to the company itself. But leadership can change.
Great potential and documented achievements
Even at the current price of the shares, Tesla trades in a price -profit (p/e) price in relation to 177. This is not unjustified. But the price of the shares would have to enhance by 53% higher to reach $ 500, which means an even greater p/e indicator.
Of course, investors currently value the company based on its prospects. From self -propelled cars to robotics, Tesla has a lot of development that could significantly enhance its sales.
It is also not an unbelievable startup. Thanks to her car activities, Tesla has already shown that she is able to scale much from scratch, overcome a lot of obstacles and become profitable. Thus, the proven ability increases the credibility of plans for further business development.
But we are in years – at least – from those business areas that become a significant cause of the lower line of the company, if they ever do it. The energy storage industry is growing rapidly, but I think it is already reflected at the current price of the action.
Meanwhile, the volume of cars sales fell slightly last year and dramatically in the first quarter of this year. A lonely return to an even kile, not to mention the return to high growth historically evident, will require a lot of effort. The electric vehicle market is now much more competitive than a few years ago.
To sum up, Tesla at the moment looks like a car company with cut off, decent activity in the field of energy storage with powerful growth prospects and other ideas that have not yet proved their commercial life.
On this basis, the current ratio of P/E seems to be absurd to me. If there is good enough messages and drives the hopes of investors, maybe Tesla shares will reach USD 500. However, I am rationally worried that he is overstated, not underestimated. I will not invest.
