Tesla may be the most dangerous stock on Wall Street
Tesla’s stock price has soared this year as if riding on a rocket, but an investment researcher issued a warning on the stock.
David Trainer, CEO of investment research company New Constructs, said Tesla is the most dangerous stock on Wall Street, saying that its fundamentals do not support such high stock prices and valuations.
He said that based on Tesla’s current fundamental information, the company’s profits should be much higher than the current level, and its valuation should be one-tenth of the current level. In addition, he also believes that it is dangerous for investors to blindly build positions due to Tesla’s stock split.
Trainer said: “No matter what you think Tesla will do-they will produce 30 million cars in the next 10 years, enter the insurance industry, and have the same high profit margins as Toyota-even if you believe all this is true Yes, Tesla’s stock price still means that profits will be even higher than that. ‘
He pointed out that in terms of average selling price (ASP), the company’s share price means that its market share is between 40% and 110%. If you follow the current ASP of US$57,000 and assume that by 2030, car sales will be 10.9 million, this means that the company’s market share will account for 42%. Tesla’s forward P/E ratio is 159 times.
In addition, he believes that Tesla’s recent stock split plan may also pose a danger to investors who newly buy its shares, because the stock split is irrelevant to value, and it is a tempting transaction that is less informed and less sophisticated. The way the clerk went to chase this stock.
It is reported that after Tesla completed a 1:5 stock split on August 31, the stock rose by 12% that day. However, after being reduced by the largest external shareholder Ballie Gifford, the company’s stock price fell more than 5% at the close of trading on September 2. In addition, the stock has also fallen into a broader sell-off, hitting some high-momentum stocks in the market.
He said: “I think, considering a reasonable level of profit, about 10% of profits may be appropriate.” “As far as electric vehicles are concerned, Tesla has not entered the top 10 in terms of market share or car sales in Europe. This is because the existing European laws strongly stimulate existing manufacturers to increase the efforts of hybrid and electric vehicles. “The same situation also happened in the United States. I think, realistically, the actual value we are talking about is close to $50, not $500. “
But Trainer believes that Tesla CEO Musk and the company have indeed accelerated this trend by making electric vehicles more mainstream in the market.