TeslaTSLA is slated to release second-quarter 2020 results on Jul 22, after the closing bell. The electric-vehicle pioneer beat first-quarter 2020 earnings estimates on higher-than-anticipated automotive revenues. Over the trailing four quarters, Tesla beat estimates on three occasions and missed once, with the average surprise being 482.1%. This is depicted in the graph below:

Tesla, Inc. Price and EPS Surprise

Tesla, Inc. Price and EPS Surprise

Tesla, Inc. price-eps-surprise | Tesla, Inc. Quote

Trend in Estimate Revision

The Zacks Consensus Estimate for Teslas second-quarter loss per share has been narrowed by 39 cents to 64 cents in the past 30 days. The figure indicates an improvement from the year-ago loss of $1.12 a share. The Zacks Consensus Estimate for revenues is pegged at $4.96 billion, indicating a decline from the reported sales of $6.35 billion in the corresponding period of 2019.

Earnings Whispers

Our proven model predicts an earnings beat for Tesla for the to-be-reported quarter, as it has the right combination of two key ingredients. A combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before theyre reported with our Earnings ESP Filter. You can seethe complete list of todays Zacks #1 Rank stocks here.

Earnings ESP:Tesla has an Earnings ESP of +135.17%. This is because the Most Accurate Estimate is pegged at earnings of 22 cents per share against the Zacks Consensus Estimate of a loss of 64 cents.

Zacks Rank:It carries a Zacks Rank of 3 currently.

Factors at Play

Although overall second-quarter vehicle deliveries declined slightly from the year-ago level amid coronavirus woes, the figure handily surpassed analysts estimates.The firm reported production and deliveries of 82,272 and 90,650 vehicles, respectively, in second-quarter 2020.

Increasing deliveries of Model 3, which forms a major chunk of the automakers overall deliveries, are likely to have aided Teslas automotive revenues in the to-be-reported quarter. Also, ramped up production and deliveries of Model Y are likely to have buoyed its earnings. It should be noted that Model 3/Y deliveries came in at 80,050, up from the prior-year level of 77,634. All in all, robust Model 3 demand, ramp up of Model Y production and significant Shanghai Gigafactory progress are likely to fuel Teslas results for the to-be-reported quarter.

Nonetheless, the consensus mark for automotive revenues is pegged at $4,004 million, suggesting a decline of 22.5% year over year. The Zacks Consensus Estimate for revenues from the energy generation and storage segment is pegged at $365 million, implying an increase from the prior quarters $293 million but a decline from the year-ago quarters $368 million. The consensus estimate for revenues from services and other is pegged at $554 million, pointing to a decline from $605 million reported in second-quarter 2019.

Musks Mail Triggers Optimism

While the revenue estimates are somewhat discouraging, Musks leaked mail to employees generated enthusiasm among investors. Musk sent an e-mail to employees, encouraging them to finish the to-be-reported quarter on a strong note and showing optimism that the firm could break even in the second quarter. The email said, breaking even is looking super tight. Really makes a difference for every car you build and deliver. Please go all out to ensure victory! If Tesla manages to remain in the black in second-quarter 2020 amid the challenging COVID-19 backdrop, it will be a jaw-dropping achievement for the company and Musk.

Other Stocks to Consider

Tesla is not the only auto firm looking up this earnings season. Here are some other companies from the same space, which according to our model also have the right combination of elements to post an earnings beat in the to-be-reported quarter.

Harley-Davidson HOG has an Earnings ESP of +78.18% and carries a Zacks Rank #3 at present. The company is slated to release second-quarter 2020 earnings on Jul 28.

Story continues

Read the original post:

Can Tesla (TSLA) Keep its Earnings Streak Alive in Q2? - Yahoo Finance

Tesla Inc.s second-quarter results come amid another massive rally for the stock, which has boosted the companys valuation to nearly $300 billion.

The Silicon Valley car maker TSLA, +9.47% is expected to report quarterly numbers on Wednesday after the bell. A call with analysts at 5:30 p.m. Eastern will follow.

Teslas shares have quadrupled in price this year, with volume nearly tripling this week from a six-month average.

The rally has pushed the electric car makers market value to around $280 billion, making Tesla the most valued car company in the world after Japans Toyota Motor Co. TM, +0.17%, which sold more than 10 million vehicles last year, including 2.4 million in North America.

Don't miss:Tesla at $2,000 is new bull case for Morgan Stanley

Wall Street is calling for GAAP and adjusted quarterly losses for Teslas second quarter, but that hasnt quelled hopes that Tesla could surprise markets with a quarterly profit, which would put the stock on track to join the S&P 500 index within three to six months. One of the criteria for the indexs inclusion is GAAP profitability for four consecutive quarters.

Joining a major index would get Tesla shares to the portfolios of thousands of index-tracking funds, and send managed funds scrambling to catch up with it as well.

Heres what to expect:

Earnings: Consensus from 33 Wall Street analysts polled by FactSet calls for a GAAP loss of $1.02 cents a share, which would compare with a GAAP loss of $2.31 a share in the first quarter of 2019. The analysts expect an adjusted loss of 14 cents a share, which would compare with an adjusted loss of $1.12 a share a year ago.

Estimize, a crowdsourcing platform that gathers estimates from Wall Street analysts, as well as buy-side analysts, fund managers, company executives, academics and others, is expecting an adjusted profit of 12 cents a share.

Revenue: The analysts surveyed by FactSet expect sales of $5.15 billion for Tesla, down from $6.35 billion a year ago. Estimize sees revenue of $5.41 billion for the company.

Stock movement: So far this year, Tesla shares have gained 260%, a stark contrast with losses of around 7% for the Dow Jones Industrial Average DJIA, +0.03% and breakeven for the S&P 500 index SPX, +0.84% in the same period.

What else to expect: A clearer picture of the coronavirus pandemic impact on the company will likely emerge with the quarterly results.

For most of the three-month period, Teslas sole U.S. car-making factory in Fremont, Calif., was closed (and became a point of contention between Chief Executive Elon Musk and local health authorities, with the factory reopening against shutdown orders), with production from Teslas Shanghai factory offsetting some of the effects of Fremonts closing.

The share rally, which started in December, most recently picked up steam after the company earlier this month reported better-than-expected second-quarter sales without Fremont at full speed.

The stocks valuation is likely dislocated from traditional valuation metrics, analysts at Evercore ISI said in a recent note.

Tesla could weaponize it, and go for another equity raise, despite having done so as recently as February, they said. The money could be used to improve its balance sheet, and expand capacity faster.

More clarity on the pace of Model Y production and deliveries is also high on investors list for the quarter.

See also:Tesla stock rockets higher as quarterly sales crush expectations

Tesla lumped second-quarter production and sales of the Model Y, a compact SUV, with those of the Model 3, saying that it sold 80,050 and produced 75,946 of both, the vast majority being Model 3s.

Besides the focus on demand for the Model Y, Wall Street is bound to parse out any mention of 2020 sales goals.

Tesla in April said it has the capacity installed to deliver more than half a million vehicles in 2020 despite announced production interruptions.

The analysts at Evercore ISI on Monday tweaked higher their expectations for 2020 deliveries to 460,000 vehicles, from their previous expectation of 435,000 vehicles. The FactSet consensus calls for 435,000 units to be sold this year.

Another potential catalyst for the shares is around the corner, and Tesla could provide more details about it during the call. Tesla has set its battery day for Sept. 22 alongside its annual shareholder meeting. The expectation is that the company will unveil a million mile battery and showcase advances that would put the company comfortably ahead of competition.

Battery-technology innovations remain the key ingredients in Teslas success on the battery front and we believe the company is getting closer to announcing the million mile battery, Dan Ives of Wedbush said in a recent note. Such a battery could last for decades, withstand all types of weather/terrain, and be another major milestone for the Tesla ecosystem.

See original here:

Teslas earnings on tap this week: Will a loss end its blowout stock rally? - MarketWatch

In the early 2000s, Tesla Motors was a small start-up underdog in the automotive industry.

Itfacednaysayers because "no one was doing electric cars," CEO Elon Musk said on the "Third Row Tesla" podcast in February.

But despite the odds, Tesla became the world's most valuable automaker itsmarket capitalization surpassed Toyota'sfor the first time on July 1.

And thanks to Tesla's success, on Friday, CEO Musk became the seventh-richest person in the world, according to the Bloomberg Billionaire Index. His net worth is currently$70.5 billion. (Musksurpassed in wealth even legendary investor Warren Buffett, who is worth $69.2 billion, although Buffett did announce a donation of nearly $3 billion in Berkshire Hathaway shares on Wednesday.)

Musk recalled on the "Third Row Tesla" podcast in February the experience that led him to invest in Tesla in the first place.

In 2003, Musk, long interested in sustainability and electric cars, test drove a model car called the Tzero.

[The first Tzero model] literally didn't have doors or a roof, or any airbags or an effective cooling system. It was not safe or reliable," Musk said on the podcast. But it intrigued him.

The electric sports car built in 1997 by a small California company calledAC Propulsion, was essentially a version of "the prototypical Tesla Roadster,"according to Wired. But while AC Propulsion founder Alan Cocconi and then-CEO Tom Gage were "technology visionaries,"according to Wired,they didn't have "the entrepreneurial vision to see just how big an idea it could become" or "the means to achieve it."

Musk did.He was inspired and saw an opportunity to bring the electric car to market.

Although Musk didn't want to take on another start-up (he had just founded aerospace company SpaceX), he asked Cocconi and Gage if he could commercialize the Tzero. They agreed, according to Musk, and Gage suggestedMusk speak with electric car start-up Tesla Motors and its founders, engineers Martin Eberhard and Marc Tarpenning, whowere alsolooking to commercialize the Tzero.

With money Musk earned as a co-founder of PayPal, which eBay bought for $1.5 billion in 2002, he invested $6.3 million in start-up Tesla Motors in 2004, according toWired. (The company had five co-founders: Eberhard and Tarpenning, who started the original Tesla Motors in 2003, as well as Ian Wright, JB Straubel and Musk.)

Four years later, Musk became the CEO of Tesla after deciding to invest more of his personal fortune into the company.

"Major credit to AC Propulsion for the Tzero electric sports car 1997-2003 that inspired Tesla Roadster," the electric car company's first release, Musk tweeted in December 2018.

"Without that, Tesla wouldn't exist or would have started much later."

Check out: The best credit cards of 2020 could earn you over $1,000 in 5 years

Don't miss:

Original post:

Test-driving this obscure 1997 sports car convinced Elon Musk to make electric cars and invest in Tesla - CNBC

Tesla China-made Model 3 vehicles are seen during a delivery event at its factory in Shanghai, China January 7, 2020.

Aly Song | Reuters

Tesla's vehicle registrations nearly halved in the U.S. state of California during the second quarter, according to data from Cross-Sell, a marketing research firm that collates title and registration data.

Most parts of the United States were under government-imposed stay-at-home orders between April and June to combat the spread of the coronavirus outbreak, which impacted production and caused a plunge in auto sales.

Tesla's only U.S. vehicle factory in California was shut for some six weeks of the quarter.

The report released on Wednesday showed registrations in California, a bellwether market for the electric-car maker, plummeted almost 48% from a year earlier to 9,774 vehicles in the three months ended June 2020.

Model 3 registrations in the state, which accounted for more than half of the total registrations, fell 63.6% to 5,951 vehicles.

Total vehicle registrations in the 23 states from where the data was collected fell nearly 49% to 18,702 vehicles.

The automaker had earlier this month outpaced analysts' estimates for vehicle deliveries in the second quarter, defying a trend of plummeting sales in the auto industry as Covid-19-related lockdown orders kept people at home.

Registration figures might not accurately reflect the number of vehicle deliveries during the quarter as registrations in the United States typically take about 30 days from the time of sale.

Subscribe to CNBC on YouTube.

Read more:

Tesla registrations in California nearly halved in second quarter - CNBC

Happy Friday and welcome back to Shifting Gears, Business Insider's weekly roundup of all things transportation.

We're back from a few weeks' hiatus and there's plenty of things to catch you up on. Don't forget to sign up here to get this sent straight to your inbox every week.

Let's dive in:

The world's most valuable automaker can gain and lose the entire market value of one of its Detroit competitors in a single day's trading. The meteoric rise has even made Wall Street analysts scratch their head to explain it.

To understand the stark difference between Elon Musk and his competitors, there are two key charts to digest. Here's what you need to know.

Dave Mosher interviewed Peter Beck, founder and CEO of SpaceX competitor Rocket Lab, and talked about its recent mission failure and what comes next.

"You don't get into this business and don't expect to have a failure," he said. You can read all the conversation's highlights here.

The automaker this week revealed a fresh version of its iconic Bronco SUV the one of OJ Simpson fame and the pre-order frenzy crashed its website.

Kristen Lee points out that "love for off-roading and 'go-anywhereness' never went away, as evidenced by fans and buyers of the off-roading Ford F-150 Raptor pickup truck. Match that enthusiasm with the return of a body-on-frame, cartoonishly boxy four-wheel-drive off-roader with a famed nameplate and cultlike following, and it could challenge the Jeep Wrangler. No wonder customers said the site crashed."

Airlines saw an uptick in reservations as lockdown orders began to lift, helping the stocks get their feet back under them a bit. But with virus cases still surging in the US more than anywhere else in the world travel plans seem to have hit a plateau.

And with money from the first round of economic stimulus soon to run out at the end of July, many of the largest airlines have warned of impending layoffs. In hindsight, Warren Buffett's exit seems very well timed.

Get the latest Ford stock price here.

Read the original:

Shifting Gears transportation newsletter: Tesla, a new Bronco, and more - Business Insider - Business Insider

As the effects of the pandemic continued to dominate the headlines, the Dow Jones industrial average and the S&P 500 ended the week marginally higher, while the Nasdaq slipped about 1%.

It wasa week in which investors were keeping an eye on Warren Buffettand the big banks kicked off the dreaded new earnings season with mixed results. A top social media platform suffered a large, embarrassing hack, and an iconic name returned to the auto market.

Benzinga continues to examine the prospects for many of the stocks most popular with investors. The following are some of this past week's most bullish and bearish posts that are worth another look.

"Credit Suisse Doubles Tesla Price Target: 'Priced For Perfection'" by Priya Nigam suggests that Tesla Inc (NASDAQ: TSLA) has delivered a phenomenal rally in 2020 and hasmorepositive catalysts ahead.

In "Why Microsoft Is Morgan Stanley's Top Pick Ahead Of The Q4 Print," Sanju Swamy examines why near-term demand and secular trends should benefit Microsoft Corporation (NYSE: MSFT).

A flurry of bullish option trades suggests some deep-pocketed investors see significant upside for General Electric Company (NYSE: GE), according to Wayne Duggan's "Flood Of Unusual GE Call Buying Suggests Major Upside In The Next 6 Months."

Shanthi Rexaline's "Moderna Analyst: Coronavirus Vaccine Will Get Approved, Clock $5B+ In Orders Over Next Few Years" reveals why one analyst predicts billions in sales for Moderna Inc (NASDAQ: MRNA).

"Nvidia Analyst Says AI Is Fueling Data Center Growth" by Jackson Chen discusses why the pandemic driving artificial intelligence demand is a boost for NVIDIA Corporation (NASDAQ: NVDA) stock.

For additional bullish calls, also have a look at "The Cybersecurity Stocks That Could Benefit From The Twitter Hack"and "10 Reasons Why Investors May Start To View Walmart As A Tech Stock."

In Priya Nigam's "Netflix Lacks Lack Near-Term Catalysts, Credit Suisse Says After Q2 Report," see what lies ahead for Netflix Inc (NASDAQ: NFLX) after the crisis-driven boost in viewership.

Wayne Duggan's "Disney's Stock Falls On Downgrade, Cowen Says Parks Won't Fully Recover Until 2025" looks at why one Walt Disney Co (NYSE: DIS) bull has run out of patience as the pandemic drags on.

The recent run at Spotify Technology SA (NYSE: SPOT) has made its valuation less attractive. So says "Spotify Hit With Double Downgrade As Upside Optionality Looks Fully Priced In" by Shanthi Rexaline.

Be sure to check out "Several Fundamental Risks Overlooked As Tesla Approaches $2,000: Morgan Stanley"and "OPEC Warns Second 'Strong Wave' Of Coronavirus Will Lead To Drop In Oil Demand."for additional bearish calls.

At the time of this writing, the author had no position in the mentioned equities.

Keep up with all the latest breaking news and trading ideas by following Benzinga on Twitter.

2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

View post:

Bulls And Bears Of The Week: Disney, GE, Tesla And More - Benzinga

By Saku PanditharatneThe Covid-19 pandemic may have hurt the economy, but for technology stocks it feels like 1999 again. The Nasdaq Composite Index just reached a record high having rebounded about 50% from its low of the year in March. The stock market is not the economy, but it does feel strange for stocks to be soaring in the middle of a deep recession.

The difference is timescale: stock prices represent revenue and earnings very far out into the future, not today. If plans for new technology are sound, the outlook can still look bright even though the present seems gloomy. The rationale for sky-high valuations for tech stocks in the late 1990s also came from projected profits in the decades to come. These so-called concept stocks won investors through a compelling story about future potential, even though the company in the near term would generate little-to-nothing in terms of real revenue.

Maybe concept stocks were a crazy phenomenon from a more exuberant time, such as Beanie Babies or jelly shoes. But take Tesla Inc. True fans are buying the stock because they believe in a vision of a technologically advanced electric car and other products, while grouchy short-sellers write long, critical blog posts about the companys weak balance sheet and high debt. Is it better to price the stock on the concept, or on the fundamentals alone? Neither seems like the perfectly accurate way to value the company.

Valuations that are too high can lead to vaporware and waste, but a valuation that is too low can become a self-fulfilling prophecy. In other words, if Tesla were valued only on its balance sheet, the company might not be able to raise enough cash to keep building and developing electric cars. It seems a fairly safe bet that Tesla is innovative enough to keep coming up with new inventions, above and beyond their existing revenue lines, but when new products are involved, the expected future profit and revenue over the long term is difficult to predict.

Many people would put a high probability on Apple Inc. coming out with a new product, such as virtual reality glasses, but the companys shares were trading at around a relatively paltry 20 times earnings through much of 2019, which amounted to not much more than future iPhone revenue. Although the ratio has moved up to about 30, that still seems low for a company like Apple and may be a sign investors are shifting away from valuing it just on iPhone revenue. Experienced venture capitalists are happy to take the risk on hypothetical products for early-stage startups, but the stock market hasnt figured out how to price in products that are yet to be created by established public companies.

To be sure, the difficulty of pricing in new product lines does exist in the realm of private companies. Softbank Group Corps Vision Fund made big and bold bets in promising companies, valuing them above what their revenue might suggest. But some of these companies were not able to meet their targets, collapsing under the weight of too much capital. For growing tech unicorns, valued in the $1 billion to $50 billion range, it is certainly difficult to raise money for a new product line based on intangible assets. Capital should be flowing into these highly innovative, cutting-edge companies in the current low-interest rate world, but few understand how to structure the appropriate financing.

With an economy in trouble, the path back to prosperity depends on tech companies rapidly scaling up, generating revenue and creating jobs. Finer-tuned pricing of intangible assets could speed up the recovery process, allowing growing tech companies to raise money for new product lines, rather than just to scale up old ones. It could also help them to acquire old economy companies in leveraged deals financed around symbiotic revenue benefits.

In some ways, intangible capital is reminiscent of the nascent days of high-yield bonds in the 1980s, in that an accurate formula could change the world. Price it correctly, and you would be able to leverage small amounts of capital to totally reshape the economy instead of promoting breakups and hostile takeovers. So instead of criticizing high stock prices for tech companies, embrace and understand them for they may be the key to the economic recovery. The race is on to figure out the winning formula.

Originally posted here:

Instead of criticizing valuations of Tesla & Apple, embrace them - Economic Times

Tesla Inc.s second-quarter results come amid another massive rally for the stock, which has boosted the companys valuation to nearly $300 billion.

The Silicon Valley car maker TSLA, +0.01% is expected to report quarterly numbers on Wednesday after the bell. A call with analysts at 5:30 p.m. Eastern will follow.

Teslas shares have quadrupled in price this year, with volume nearly tripling this week from a six-month average.

The rally has pushed the electric car makers market value to around $280 billion, making Tesla the most valued car company in the world after Japans Toyota Motor Co. TM, +0.45%, which sold more than 10 million vehicles last year, including 2.4 million in North America.

Don't miss:Tesla at $2,000 is new bull case for Morgan Stanley

Wall Street is calling for GAAP and adjusted quarterly losses for Teslas second quarter, but that hasnt quelled hopes that Tesla could surprise markets with a quarterly profit, which would put the stock on track to join the S&P 500 index within three to six months. One of the criteria for the indexs inclusion is GAAP profitability for four consecutive quarters.

Joining a major index would get Tesla shares to the portfolios of thousands of index-tracking funds, and send managed funds scrambling to catch up with it as well.

Heres what to expect:

Earnings: Consensus from 33 Wall Street analysts polled by FactSet calls for a GAAP loss of $1.02 cents a share, which would compare with a GAAP loss of $2.31 a share in the first quarter of 2019. The analysts expect an adjusted loss of 14 cents a share, which would compare with an adjusted loss of $1.12 a share a year ago.

Estimize, a crowdsourcing platform that gathers estimates from Wall Street analysts, as well as buy-side analysts, fund managers, company executives, academics and others, is expecting an adjusted profit of 6 cents a share.

Revenue: The analysts surveyed by FactSet expect sales of $5.15 billion for Tesla, down from $6.35 billion a year ago. Estimize sees revenue of $5.32 billion for the company.

Stock movement: So far this year, Tesla shares have gained 260%, a stark contrast with losses of around 6% for the Dow Jones Industrial Average DJIA, -0.23% and breakeven for the S&P 500 index SPX, +0.28% in the same period.

What else to expect: A clearer picture of the coronavirus pandemic impact on the company will likely emerge with the quarterly results.

For most of the three-month period, Teslas sole U.S. car-making factory in Fremont, Calif., was closed (and became a point of contention between Chief Executive Elon Musk and local health authorities, with the factory reopening against shutdown orders), with production from Teslas Shanghai factory offsetting some of the effects of Fremonts closing.

The share rally, which started in December, most recently picked up steam after the company earlier this month reported better-than-expected second-quarter sales without Fremont at full speed.

The stocks valuation is likely dislocated from traditional valuation metrics, analysts at Evercore ISI said in a recent note.

Tesla could weaponize it, and go for another equity raise, despite having done so as recently as February, they said. The money could be used to improve its balance sheet, and expand capacity faster.

More clarity on the pace of Model Y production and deliveries is also high on investors list for the quarter.

See also:Tesla stock rockets higher as quarterly sales crush expectations

Tesla lumped second-quarter production and sales of the Model Y, a compact SUV, with those of the Model 3, saying that it sold 80,050 and produced 75,946 of both, the vast majority being Model 3s.

Besides the focus on demand for the Model Y, Wall Street is bound to parse out any mention of 2020 sales goals.

Tesla in April said it has the capacity installed to deliver more than half a million vehicles in 2020 despite announced production interruptions.

The analysts at Evercore ISI on Monday tweaked higher their expectations for 2020 deliveries to 460,000 vehicles, from their previous expectation of 435,000 vehicles. The FactSet consensus calls for 435,000 units to be sold this year.

Another potential catalyst for the shares is around the corner, and Tesla could provide more details about it during the call. Tesla has set its battery day for Sept. 22 alongside its annual shareholder meeting. The expectation is that the company will unveil a million mile battery and showcase advances that would put the company comfortably ahead of competition.

Battery-technology innovations remain the key ingredients in Teslas success on the battery front and we believe the company is getting closer to announcing the million mile battery, Dan Ives of Wedbush said in a recent note. Such a battery could last for decades, withstand all types of weather/terrain, and be another major milestone for the Tesla ecosystem.

Link:

Teslas earnings on tap next week: Will a loss end its blowout stock rally? - MarketWatch

Tesla is the company of the moment the prime exemplar of just about any big and important trend that you might care about.

Why it matters: Almost every reader of finance and business news will have at least one strongly-held opinion about Tesla. What you might not realize is just how widely those opinions range, and the degree to which they map onto much broader views of the world.

Tesla, especially after its merger with Solar City, sometimes feels like a Utopian project an attempt to populate a carbon-neutral future with fast, efficient vehicles that don't contribute to global warming.

Tesla has already benefited from the Fed's zero-interest rate policy following the global financial crisis a policy designed to incentivize capital-intensive investment.

Capitalists love and fear natural monopolies. Tesla's flagship product its cars, powered by its batteries, its home-built software, and its network of charging stations is years ahead of the competition, and is synonymous with "electric vehicle" for many.

The one thing Tesla hasn't made, despite many years' worth of promises that it was just around the corner, is a self-driving car. That hasn't stopped the company from advertising a feature called "autopilot."

Depending on whom you talk to, Tesla CEO Elon Musk is the archetypal cartoon-villain billionaire or else he's the archetypal planet-saving billionaire.

Go deeper: Tesla goes from electric vehicle to gambling vehicle

See the rest here:

Breaking down the Tesla obsession - Axios

Tesla's TSLA, -2.93% market capitalization is nearing $300 billion. Its now the largest car maker in the world, even larger than Toyota Motor Corp. TM, -0.66%, which produced almost 9 million cars in 2019 and has a market capitalization of around $175 billion.

Tesla stock is trading at 45 times very rosy and improbable 2024 earnings. Teslas market cap implies that investors believe that production will go up more than 20-fold from the 400,000 cars a year it currently produces to 10 million cars.

Bondholders take a decidedly different view of Tesla. As the stock-market valuation of Tesla races to the moon, its debt rating is earthbound. Tesla, the worlds largest automaker, gets a Caa1 rating from Moodys Investors Service for its senior unsecured debt, while S&P Global gives Tesla a B- credit rating. Put simply, Teslas bonds are considered junk. (By comparison, Toyota is rated A+, GM GM, -0.11% is rated BBB).

Read: Teslas stock is forming a bubble and new buyers should buckle up for a crash

Plus: 7 risks for Teslas stock that Robinhood traders would be wise to heed

When I wrote a 37-page serieson Tesla I opened it with this quote from F. Scott Fitzgerald: The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function. An analysis of Tesla and the automotive industry today requires holding a lot of opposing ideas.

I have made the analogy that the transition from internal combustion engine (ICE) cars to electric motors is akin to the transition from dumbphones to smartphones. Its a domain shift. So maybe this will bring higher margins for Tesla, as happened for Apple AAPL, -1.23% with the iPhone. Unlike other car makers, Tesla is vertically integrated: It manufactures most of the components that go into its cars (including seats); thus it gains from the economies of scale.

Also, software plays a bigger role in a Tesla than in a traditional car. There is self-driving, over-the-air updates, and an iPad-like interface that powers all the controls, for starters. So if advanced software helps Tesla get higher margins than traditional car companies, it in fact may not have to make as many cars to get to Toyotas profitability. Bulls would even argue that self-driving alone may send Teslas margins soaring. Ill pour cold water on that argument: Full autonomous driving is a good decade away.

It will take years, maybe even a decade, for Tesla to produce enough cars to justify its valuation.

Most importantly, going from 400,000 cars to many millions a year is neither easy nor cheap. The market confuses Tesla with Silicon Valley tech companies. Yes, Tesla is much more a technology company than your typical ICE car company is. It creates its own software and even the microprocessor that powers self-driving, but it still cannot escape the reality that it has to bend a lot of metal to produce its electric cars.

Unlike Facebook FB, +0.27% , which a decade ago could increase its user base 10- or- 20-fold by spending a few hundred million dollars on data centers, Tesla will require an incredible amount of capital to increase production many-fold. To produce fewer than half a million cars, as it does today, Tesla needed a $25 billion investment in property, plants, and equipment. This is where bits meet atoms and face financial gravity. Tesla is barely breaking even today and will need to raise and invest hundreds of billions of dollars to increase production enough to grow into its current valuation.

Then there is an element of time. Tesla has been stuck at producing 90,000 cars for the last eight quarters. It can only blame the coronavirus for a quarter or two. Getting to an annual production of even a few million cars will require time a lot of time. A lot of dirt has to be moved, permits issued, equipment installed, people hired. It will take years, maybe even a decade, for Tesla to produce enough cars to justify its valuation. Todays market valuation assumes Tesla is already there that the capital has been raised and spent and that it cost nothing.

So, how does one invest in this overvalued market? Our strategy is spelled outin this fairly lengthyarticle.

Vitaliy Katsenelson is chief investment officer atInvestment Management Associatesin Denver, which owns Tesla put options in client portfolios. Katsenelson is the author ofThe Little Book of Sideways Markets(Wiley).

More: Longtime Elon Musk critic has a strong message for investors looking to bet against Tesla

Also read: Teslas earnings on tap: Will a loss end its blowout stock rally?

View original post here:

Tesla is like a SpaceX rocket to stock investors, but the car makers bond holders are more down to earth - MarketWatch

GOTHENBURG, SWEDEN - 2019/09/14: An American automotive and energy company that specialises in ... [+] electric car manufacturing Tesla logo seen in Gothenburg. (Photo by Karol Serewis/SOPA Images/LightRocket via Getty Images)

As a leader in autonomous driving, we estimate that Tesla(NASDAQ:TSLA) recorded $1.4 billion in Software Revenue in 2019 via sales of its Full Self Driving software upgrades. These upgrades, which cost about $8,000 per vehicle currently, are also highly lucrative. So How Do Teslas Software Upgrades Impact Its Margins? We estimate that they contributed about 400 basis points (4%) to Teslas Automotive Gross Margins (revenues less direct costs, divided by revenues) of 21% in 2019. Excluding software sales, Tesla is unlikely to have been profitable over the last few quarters. No discussion about S&P inclusion.

How Do Software Sales Impact Teslas Margins?

Why Software Could Account For A Higher Mix of Margins Going Forward

Is this a good time to jump into Tesla stock? Yes especially if you believe in this one important Tesla metric: Teslas Time Horizon. On the flip side, for a more balanced, risk-adjusted view see our analysis Tesla Valuation: Jump Into Tesla, Wait, Or Get Out?

Separately, which S&P 500 component stocks have the best chance of outperforming the benchmark index? Our 5 In the S&P 500 Thatll Beat The Index: TWTR, ISRG, NFLX, NOW, V look promising.

Whats behind Trefis? See How its Powering New Collaboration and What-Ifs

For CFOs and Finance Teams | Product, R&D, and Marketing Teams

More Trefis Data

See allTrefis Price EstimatesandDownloadTrefis Datahere

Whats behind Trefis? See How Its Powering New Collaboration and What-Ifs ForCFOs and Finance Teams |Product, R&D, and Marketing Teams

See the original post:

Will Tesla Be On S&P 500? Teslas Software Has One Clue - Forbes

Let's be clear about one thing: there is no such thing as a self-driving car, let alone a self-driving Tesla. No matter what its CEO Elon Musk may say, Tesla lags behind rivals like General Motors (and soon Ford) in making a hands-free highway driving system that uses cameras to make sure the driver is really paying attention. But it's backed by a hype machine that has no equal, which is why Tesla is, at last, making a splash in South Korea, where liver-strong techies have reportedly rechristened one of the country's signature cocktails in Tesla's name.

According to a Reuters story on the company's inroads on Korea, a cocktail's new "Tesla" name is a portmanteau of Terraa light lagerand soju; a smooth, often sweet rice spirit. How those two come together to form the name of a certain California-based automaker isn't quite clear, though having personally consumed several Kopstootje (the Dutch equivalent made with jenever) in a hostel basement bar while working up the courage to sing karaoke, I can see why Koreans would find such a drink appealing.

Known to Americans as the Boilermaker, the Germans as the U-Boot, and Russians, the Yorsh, the pairing (or dunking in) of a shot of grain-distilled liquor and a pint of beer is one of the world's simplest cocktails. It tastes good, goes down easy, and depending on the strength of the ingredients, can get you absolutely shelled in no time. Koreans have long enjoyed this concoction as a drink called the Somaek, though now that orders for the Model X are piling up in Korea, Musk stans have reportedly helped get the drink rebranded in honor of their favorite car company.

So, I decided to try out Korea's Tesla cocktail for myself, though sourcing the ingredients proved trickier than you might imagine.

The soju itself was easy; a bottle of unflavored Jinro was easily found on the shelves of a local liquor store. Terra, on the other hand, turned out to be next to impossible.

As of spring 2019, demand for the new, Millennial-aimed "clean" lager outstripped demand according to Korea JoongAng Daily, and it would appear its producer HiteJinro hasn't found the chance to distribute it stateside, as no retailer I spoke to could source the stuff. Therefore, I reasoned the staple product from its manufacturer, the eponymous Hite beer itself, would make an adequate substitute. It too is a lager, one with a Budweiser- and Coors-like rice-based mash, with a light taste and an ABV of 4.5 percent, just marginally higher than the Terra it is to stand in for. And, following a Somaek recipe published by Supercall, I took the plunge.

How is it? At the recommended 7:3 beer to soju ratio, it came out a tad sweet, subtly malty, and hazardously light for a beverage that drinks like a light beer, but hits like a normal brew. Otherwise, it's a solid stand-in for a beer, and as such isn't especially interesting for a cocktail.

At only five ounces, it disappears quickly, though it'd still be no kick to the liver if prepared as a double. If extra complexity is desired, substituting one of the many fruit-flavored varieties of soju for the plain stuff could be a fun twist, as could a few drops of orange bitters.

But if getting sauced is the goal, using something stronger than Jinro at its paltry 20 percent ABV would be the ticket. Even so, it'd remain the kind of beverage that'd be easy to drink nightly, or down eight of in succession, only to find yourself worshipping the porcelain god or posting things to Twitter that you later regret.

As tributes to Tesla go, it's a fitting one.

Got a tip? Send us a note: tips@thedrive.com

The rest is here:

Korea's Trendy 'Tesla' Cocktail is Just as Risky as Autopilot - The Drive

Elon Musk, co-founder and chief executive officer of Tesla Motors.

Yuriko Nakao | Bloomberg | Getty Images

This stock market is like the old line about having one foot in a bucket of scalding water and the other in a bucket of ice, netting out to a neutral, if not comfortable, temperature.

There's the blistering Nasdaq, with its unassailable technology gatekeepers and a combustible frenzy in Tesla stealing much of the market's oxygen. Then there's the chill enveloping smaller stocks, vestiges of the physical consumer economy and legacy financial institutions.

Together they have the inclusive S&P 500 in a tight and tidy trading range, last week refusing plenty of excuses to break down, finishing at a one-month high and even showing signs of giving the benchwarmer value stocks a chance to play with Friday's broader rally.

The crucial question swirling around the Nasdaq's ascent and refusal of the Big Six stocks to take anything but a quick rest for months is whether investors are in danger of overpaying for the perceived certainty of secure cash flows, durable growth and entrenched franchises in the digital economy.

There is no denying both that the Nasdaq complex in the short-term appears technically stretched and over-loved, while large-cap tech is getting richly valued.

SentimenTrader.com notes that about three-quarters of Nasdaq stocks are above their 200-day moving average, the shorthand definition of a longer-term uptrend, while only about 40% of S&P 500 names are in that position. This gap in breadth is either rare or unprecedented:

The Nasdaq 100 has pushed more than 22% above its 200-day average, according to Baycrest Partners' Jonathan Krinsky, the most extreme spread with the index at a high since 2000.

And the S&P tech sector has returned to its peak price-to-sales ratio from the March 2000 tech-bubble market top.

Source: FactSet

For sure, today's tech companies are more profitable than those of two decades ago. And while the five largest S&P 500 stocks are all from the Nasdaq and in the tech or Internet realms (Apple, Microsoft, Amazon, Alphabet and Facebook) now make up a 20-year high 21% of the S&P 500, they also kick in a commensurate portion of the index's free cash flow, as this breakdown from Fred Alger Management shows.

And as wild as the Nasdaq's surge and outperformance have been, it simply hasn't piled up the amount of easy riches that it had in the late-'90s run. In the five and ten years through the end of 1999, the Nasdaq Composite had gained 440% and 800%, respectively. The comparable gains over the past five and ten years: up 111% and 380%.

Admittedly, arguing that the current market is not as expensive, frothy or beloved as the most overvalued, overextended and overestimated market in many decades is not exactly a ringing endorsement. And indeed we may never see a close rerun of that period. But, as argued here a few weeks ago, stocks can be stoutly valued and priced for subpar future returns without representing an unstable bubble or dangerous misallocation of capital.

Another qualitative distinction between today's outsized Nasdaq contribution to the market's climb and the one that culminated 20 years and four months ago: The crowding into the mega-cap elite names today is a defensive instinct, investors gravitating toward steadiness and predictability rather than blue-sky hopes of galloping growth rates and innovative disruption to come. As long as corporate-debt yields remain so low and cash-flow streams are seen as very scarce, what might upend this part of the market beyond nasty short-term corrections and shakeouts.

Back in the late '90s, the market was implicitly over-extrapolating massive growth rates for many years in companies more cyclical than appreciated, such as Cisco Systems and Intel (along with Microsoft, Oracle, Yahoo and other graybeards of Silicon Valley).

There is an unusual situation now in which the tech darlings have been barreling higher largely on macro fears and heavy liquidity flows rather than product hype or Wall Street salesmanship. In fact, the consensus analyst price targets for Apple, Microsoft and Amazon are all below the stocks' current quote, according to FactSet.

Does this show a helpfully cautious analytical corps serially underestimating today's best companies a sturdy wall of worry built by Wall Street itself? Or is it a sign the market has carried them beyond even the sell side's typically rosy calculus of fundamental value?

Who knows, Friday's mean-reversion action, with banks, energy and small caps retaking a sliver of the territory dominated by tech, is the start of a rebalancing of the market. The levitation in secular-growth sectors has arguably been the market's way of deploying ample liquidity to stay supported as the country backslides on Covid containment and the economy fitfully tries to recover.

It's tough to deny that big chunks of the Nasdaq are in the sway of overheated speculation. Tesla, to take the obvious example, has gained $108 billion in market value in two weeks. More than $34 billion worth of the stock traded on Friday alone, twice the turnover that day in Amazon a company whose market cap is more than five times as large.

This is fevered, heedless action, feeding on itself and punishing the disciplined. And the more it goes on or spreads to other stocks, the harder it will become to make the case that this is a market unappreciated by a skeptical investing public.

Visit link:

Nasdaq stocks led by Tesla continue their blistering run while chill envelops rest of the market - CNBC

Zoom CEO Eric Yuan speaks before the Nasdaq opening bell ceremony in New York on April 18, 2019.

Kena Betancur | Getty Images

(This story is for CNBC PRO subscribers only.)

Here are the biggest calls on Wall Street on Thursday:

JPMorgan said in its downgrade of Cisco that it sees "limited" investor enthusiasm and earnings per share growth.

"We are downgrading CSCO shares to Neutral led by our expectation for limited investor enthusiasm for the shares in the absence of visibility into a return to revenue growth amidst continuing headwinds to Enterprise spending in the backdrop of an uncertain macro, although latest checks indicated Enterprise IT spending remaining more resilient than expected."

Deutsche Bank said in its upgrade of the food companies that they were "too compelling to stay sidelined."

"We are reinforcing our constructive view on Staples, and highlighting incremental preference for the Food subsector (upgrading MDLZ and KHC to Buy). Recent COVID-driven events should allow Food companies an opportunity to accelerate self-improvement efforts; reduce their leverage ratios faster (enhancing strategic optionality); increase much needed reinvestments in capabilities, marketing, and innovation; and in turn improve go-forward fundamental prospects, especially relative to smaller, less well-financed competitiona proven formula for success in other CPG subsectors over the past 5+ years."

The rest is here:

Here are Thursday's biggest analyst calls of the day: Amazon, Nikola, Apple, Tesla, Peloton & more - CNBC

Saku Panditharatne is a consultant for the technology industry. She was formerly an analyst at venture capital firm Andreessen Horowitz and specializes in 3-D graphics and augmented reality.

Elon MusksTesla has led technology stocks to record highs.

Photographer: Saul Martinez/Getty Images

Photographer: Saul Martinez/Getty Images

The Covid-19 pandemic may have hurt the economy, but for technology stocks it feels like 1999 again. The Nasdaq Composite Index just reached a record high having rebounded about 50% from its low of the year in March. The stock market is not the economy, but it does feelstrange for stocks to be soaring in the middle of a deep recession.

The difference is timescale: stock prices represent revenue and earnings very far out into the future, not today. If plans for new technology are sound, the outlook can still look bright even though the present seems gloomy. The rationale for sky-high valuations for tech stocks in the late 1990s also came from projected profits in the decades to come. These so-called concept stocks won investors through a compelling story about future potential, even though the company in the near term would generate little-to-nothing in terms of real revenue.

Maybe concept stocks were a crazy phenomenon from a more exuberant time, such as Beanie Babies or jelly shoes. But take Tesla Inc. True fans are buying the stock because they believe in a vision of a technologically advanced electric car and other products, while grouchy short-sellers write long, critical blog posts about the companys weak balance sheet and high debt. Is it better to price the stock on the concept, or on the fundamentals alone? Neither seems like the perfectly accurate way to value the company.

Valuations that are too high can lead to vaporware and waste, but a valuation that is too low can become a self-fulfilling prophecy. In other words, if Tesla were valued only on its balance sheet, the company might not be able to raise enough cash to keep building and developing electric cars. It seems a fairly safe bet that Tesla is innovative enough to keep coming up with new inventions, above and beyond their existing revenue lines, but when new products are involved, the expected future profit and revenue over the long term is difficult to predict.

Many people would put a high probability on Apple Inc. coming out with a new product, such as virtual reality glasses, but the companys shares were trading at around a relatively paltry 20 times earnings through much of 2019, which amounted to not much more than future iPhone revenue. Although the ratio has moved up to about 30, that still seems low for a company like Apple and may be a sign investors are shifting away from valuing it just on iPhone revenue. Experienced venture capitalists are happy to take the risk on hypothetical products for early-stage startups, but the stock market hasnt figured out how to price in products that are yet to be created by established public companies.

More from

Its often said that tech companies ship their org chart, meaning that the products they create can be directly predicted by the structure of the organization. By looking at the people and incentives, an outside observer should be able to estimate the impact, quality and probability of success of a new product, and perhaps even future revenue. If Apple had hired a world-class team of chip engineers who had all taken a pay cut to work on a cutting edge project, we might expect its share price to rise on the news, though without a better valuation method, we can't yet say precisely by how much.

Economist Stian Westlake used the phrase intangible capital to describe the benefits a company derives from its people and organizational structure. If we could use an org chart to accurately price intangible assets, it might be easier to value a company for not only its past products, but expected future products as well.

To be sure, the difficulty of pricing in new product lines does exist in the realm of private companies. Softbank Group Corps Vision Fund made big and bold bets in promising companies, valuing them above what their revenue might suggest. But some of these companies were not able to meet their targets, collapsing under the weight of too much capital. For growing tech unicorns, valued in the $1 billion to $50 billion range, it is certainly difficult to raise money for a new product line based on intangible assets. Capital should be flowing into these highly innovative, cutting-edge companies in the current low-interest rate world, but few understand how to structure the appropriate financing.

With an economy in trouble, the path back to prosperity depends on tech companies rapidly scaling up, generating revenue and creating jobs. Finer-tuned pricing of intangible assets could speed up the recovery process, allowing growing tech companies to raise money for new product lines, rather than just to scale up old ones. It could also help them to acquire old economy companies in leveraged deals financed around symbiotic revenue benefits.

In some ways, intangible capital is reminiscent of the nascent days of high-yield bonds in the 1980s, in that an accurate formula could change the world. Price it correctly, and you would be able to leverage small amounts of capital to totally reshape the economy instead of promoting breakups and hostile takeovers. So instead of criticizing high stock prices for tech companies, embrace and understand them for they may be the key to the economic recovery. The race is on to figure out the winning formula.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:Saku Panditharatne at saku@asteroid.zone

To contact the editor responsible for this story:Robert Burgess at bburgess@bloomberg.net

Before it's here, it's on the Bloomberg Terminal.

Saku Panditharatne is a consultant for the technology industry. She was formerly an analyst at venture capital firm Andreessen Horowitz and specializes in 3-D graphics and augmented reality.

More here:

Instead of Criticizing Tech Valuations, Embrace Them - Bloomberg

Many investors who have hit the gas on investing in electric vehicle (EV) manufacturers recently have enjoyed massive gains. Other investors, however, have been sitting on the side of the road for the right time to pick up shares -- eating the dust of EV stocks, like Tesla (NASDAQ:TSLA), NIO (NYSE:NIO), and Nikola (NASDAQ:NKLA) that have passed them by. But investors will soon have a new opportunity to consider as the IPO of another EV maker is on its way.

Founded in 2015, Li Auto is a China-based manufacturer that filed paperwork with the SEC last week to debut on the American market with a $100 million offering. The company began production of its first model, Li ONE, in November 2019, and it has delivered more than 10,400 vehicles as of June 30. In the first quarter of 2020, Li Auto reported revenue of $120.3 million and a net loss of $10.9 million. At present, the company is solely focused on delivering its vehicles to the Chinese market.

Image source: Li Auto.

Unlike Tesla and NIO, whose lineups include a variety of models, Li Auto is focused on the SUV market. The company's only model in production, the Li ONE, is a six-seat, large electric SUV, and it plans on launching a full-size, electric SUV in 2022. Beyond that, the company says it intends to grow by "developing new vehicles including mid-size and compact SUV models."

Further distinguishing itself from Tesla and NIO, Li Auto's EVs rely on both batteries and gasoline. The company's extended-range electric vehicles are powered by a battery pack and a range extension system, which generates electricity with the help of an internal combustion engine.

View original post here:

Tesla and NIO Investors Beware: The IPO of Another EV Maker Is Coming Down the Pike - The Motley Fool

Tesla shares have jumped nearly 230% so far this year.

Three experts break down what's next.

Dan Ives, managing director of equity research at Wedbush, says one thing matters above the rest.

"What's the fundamental value? If you have a million-mile battery, what does that add to the stock? ... It comes down to scarcity. How do you play the EV market? ... It all comes down to the P word: profitability."

Brian Johnson, senior autos analyst at Barclays, says Tesla could face a make-or-break moment later this year.

"We think the reckoning that there is going to be could be more when we get to the second half and the fourth quarter ... If this were a real growth stock, we'd actually be talking about things like same-country, same-model sales, and so if you back out China from this quarter, back it out from a year-ago quarter, the rest of the world shrunk 28%. Now of course there's Covid, of course there's challenges, but that isn't that different from many of the legacy automakers."

Colin Rusch, managing director and senior research analyst at Oppenheimer, sees major upside ahead.

"We're really going back to our numbers. It's run aggressively past our price target that was $968. We put that in place over a quarter ago, and as we look at what the company has planned out for 2024 and 2025, you know, we see the potential for 50% to 70% upside."

Disclaimer

More here:

Tesla stock surges more than 200% in 2020 three experts on what comes next - CNBC

For the first time ever (we believe), a Ford Mustang Mach-E has been spotted charging right next to a Tesla Model 3. This image shows just how much larger the Ford really is.

Of course, the Mustang Mach-E is considered an SUV, whereas the Model 3 is a midsize sedan, but the size differences seen here are much bigger than we expected.

Now, we should point out that the Mach-E is a bit more forward in the frame in this image, so that leads to some issues with direct size comparisons, but it's still very easy to see that the Mach-E's front end is massive compared to the Model 3. In particular, the height of the hood is much higher than on the Model 3.

An InsideEVs tipster by the name of Fred Smith captured these two EVs charging. However, no additional information was provided, so we're not sure of the location.

UPDATE: Another tipster has confirmed the location as beingDearborn,Michigan in a parking structure right next to Ford's Engineering Laboratory. It seems Ford is benchmarking the Model 3.

Aside from the sheer size of the front end of the Mach-E, it's easy to see that it's also quite a bit taller than the Model 3. That's expected though since the Mach-E is a crossover.

Below are the basic measurements for both the Mach-E and the Model Y:

From the numbers, it's quite clear that the biggest difference is height, with the Mach-E being some 6 inches taller than the Model 3. The Mach-E is also about 1 inch wider and 1-inch longer than the Model 3.

We've included an image of the Mach-E next to a Tesla Model Y below so you can once again see that comparison.

See the rest here:

Ford Mustang Mach-E Looks Massive And Bulky Next To Tesla Model 3 - InsideEVs

Remember when Tesla Inc.s market value surpassed General Motors Co.? That was just in October, though investors cant be blamed for thinking it was a lifetime ago.

The electric vehicle makers valuation has added the combined value of the Big Three - GM, Ford Motor Co. and Fiat Chrysler - in just five trading days through Monday. Tesla has grown by an average $14 billion on each of those days.

Tesla shares have been on a searing rally this year, recovering spectacularly from a steep pandemic-related sell-off, helped most recently by second-quarter delivery numbers that surpassed market estimates. In the past week, the company has roughly gained the value of Fiat Chrysler Automobiles N.V. every single day.

While skeptics have said the stocks current pace may be getting detached from reality and is instead being fueled by the power of the narrative," many believers abound.

There is definitely a significant retail component that is driving shares higher," Wedbush Securities analyst Daniel Ives said in an interview, referring to individual investors trading on platforms such as Robinhood.

(Also read: Opinion - Tesla's overexcited fans should cool down a little)

Still, a lot of big institutional investors now also want a piece of Tesla and the electric vehicle market, he said. In a Covid-19 pandemic and a dark macro environment, the company just put up a 90,000 delivery number, especially when other automakers are seeing herculean challenges."

Tesla said July 2 it delivered 90,650 cars in the second quarter, which compared with analysts average estimate for about 83,000 units.

The eagerness of big money to get into Tesla was also noted by Roth Capital Partners Craig Irwin, saying the companys valuation was being driven by fund managers who have Tesla grouped with Netflix Inc., Amazon.com Inc., Facebook Inc. and the like, and were valuing it as a large-cap growth stock.

Those managers do not understand that this is not a winner-takes-all industry that those other names are," Irwin said, noting that there are more than 180 electric cars that are slated to come out by 2025. There have been some duds along the way, but you can be sure there will be some winners in those 180."

Tesla shares have gained at least 5% in four out of five sessions through Monday. While it may not be unusual for a company that has had one-day 20% gains twice in its history, the surge shows a consistency that wasnt seen before. Its the first time the stock has posted four out of five sessions with gains of such magnitude.

The latest rally has brought Teslas gains this year to $170 billion, an amount that exceeds the market capitalization of all but 30 companies in the S&P 500.

Teslas valuation doesnt make sense by any traditional measure," said Ivan Feinseth of Tigress Financial Partners. However, it is not a traditional company, so how do you put a traditional measure to it?"

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

See more here:

Tesla adds $14 billion in a day to its valuation, leaves auto giants to eat dust - Hindustan Times

Cars

Published on July 11th, 2020 | by Johnna Crider

July 11th, 2020 by Johnna Crider

Former Ford President and CEO Mark Fields recently shared what he thought of Teslas growth on CNBC. Currently, Fields is a senior advisor of TPG Capital, and he joined Closing Bell to share his thoughts on Teslas growth and what he thinks the future of the company would look like, including some thoughts on the stock [TSLA].

Tesla has surpassed all of the other auto manufacturers in terms of market cap, and one of the main questions was if this was about Teslas delivery numbers or its potential. When it comes to delivery numbers, it was noted that Tesla, when compared to several other automakers, only has thousands of deliveries a year while they have millions. However, when it comes to technology, the future of mobility, and EVs, Tesla is well ahead of its competitors.

I think actually a combination of both, Fields explained. I think the first is what Tesla is being rewarded with is growth. They grew over a month-over-month basis. Although on a year-over-year basis they were down about 5%, the rest of the auto industry was down, here in the states, almost about 2530%. I also think there are a couple of other things that investors are looking at.

Fields also shared his thoughts on Tesla and its competitors regarding software versus manufacturing. Theyre looking at competition and there was the anticipation that the established OEMs would bring products to market, which they are, but when you look at somebody like Volkswagen whos having a lot of problems with their ID.3 in terms of software management, and thats something that Tesla has done very well. They havent mastered the manufacturing piece, but they have mastered the software piece, which the OEMs still need to do.

Fields think that from a CO2 reduction standpoint, Teslas new products that are coming, like the Cybertruck, are incremental products. They arent replacing other products in their lineup, so should grow Teslas annual sales.

Addressing the second point, Fields stated that, It is around electrification going forward. He thinks that they will be in demand naturally and will also be enhanced by governmental incentives for CO2 reductions. So I think that its a combination of both of those, and I think the stock is heading higher. I think Elon was very, very focused on profitability in the second quarter.

Fields noted that if Tesla was to be profitable in Q2, then the company would have four profitable quarters in a row and would be eligible to be included in the S&P 500. If thats the case, not only will Tesla get the prestige of that, but also I think that a lot of index funds will be driven to include Tesla in their portfolio. This will, of course, increase the demand for Tesla stock and ensure the stock price goes up even further.

Fields believes that electrification is still a big priority for all the OEMs. I dont think theyre going to back off from that. Not only from a regulatory standpoint, but they need it from a competitive standpoint. I think in things like autonomous vehicles, youre going to see more partnerships as youve seen with Ford and VW, GM and Honda where theyre pooling their resources because, in the case of EVs or electrified vehicles, the technology is ready; theres a business model around it.

When it comes to autonomous vehicles, Fields doesnt think the technology is ready yet and doesnt think there is a business model set up for it. He said that he thought OEMs would pool their resources from here on out to push that out.

Another question that was posed to Fields was his thoughts on Elon Musks tweets. Specifically, the short shorts tweets and Elons playfulness on Twitter. As a former CEO yourself, would you put out a tweet like that? he was asked.

I, personally, wouldnt put out a tweet like that. I subscribe to the theory that be careful of who you step on on the way up because eventually, you might be on your way down. But listen, Elon is Elon, and I cant crawl inside of his head. Fields thinks that Elons tweets are a reflection of his personality and brand for Tesla and called it a risk for Tesla.'

Despite all of the sales, Fields shared that, ultimately, Tesla needs to be consistently profitable and needs to be more transparent with its margins when it comes to earnings.

Tags: Elon Musk, Ford, Mark Fields, Tesla, Tesla stock

Johnna Crider is a Baton Rouge artist, gem, and mineral collector, member of the International Gem Society, and a Tesla shareholder who believes in Elon Musk and Tesla. Elon Musk advised her in 2018 to Believe in Good.Tesla is one of many good things to believe in. You can find Johnna on Twitter

Originally posted here:

Ex-Ford CEO Called It On Tesla [TSLA]: I Think The Stock Is Heading Higher - CleanTechnica