This was a nod to meet the expectations of those who assume that Tesla’s formula is exhausted and its valuation has reached a ceiling.
Musk promises cheaper electric cars in 2025
Strictly speaking, the announcements that recently moved the price of Tesla shares up the most were those related to the planned launch of new models of cheaper electric cars from 2025.
The accumulated fall so far this year is close to 30% and its papers are worth practically half from the maximum they had in 2021, the year in which they reached their peak.
This movement represented a drop of about 600,000 million dollars in market value, despite the efforts of Elon Musk.
“We believe stocks perform better when automakers’ fundamentals are closer to reality and justify their prices,” said John Belton, portfolio manager at Gabelli Funds, a fund that sold its stake in Tesla in the first quarter of this year. equivalent to 65,900 shares he had purchased at the beginning of 2022. “We began to feel that the fundamentals were separating from reality,” he explained.
Tesla stock price increased almost 14 times over the past five years and that has led investors to have enough to hold on to during downturns and accept valuations that are more in line with technology companies rather than automakers.
However, the idea has now gained ground that business expansion reached a limit and stocks have entered too risky a zone. This Thursday it closed at $178.2, with an increase of 1.8%.
“Wall Street is analyzing this painful transition period for a long-term growth story to emerge for Musk & Co, with (autonomous driving) being a key ingredient in that recipe for success,” said Dan Ives, an analyst at Wedbush Securities.
Morningstar, a financial services company based in Chicago, Illinois, published a survey showing that of 18 mutual funds that bought Tesla shares since 2019, there were 10 that they cut their positions in the last quarter. Four of them reduced their exposure by 15% or more. And only five added shares in the same period.
Tesla is the most valuable automaker in the world
Anyway, Tesla is still the automaker most valuable in the world, with a market capitalization of almost US$570,000 million. In comparison, Toyota, the world’s largest automaker by volume, today has a market capitalization of $331.6 billion.
Elon Musk’s company is trading at a ratio of approximately 64 times future earningsa figure that exceeds the valuations of some top-tier technology companies, such as NVIDIA (37.8) and Super Micro Comp (23.2).
Other traditional automakers are valued much more conservatively. For example, General Motors (4.7), Ford Motor (6.4) and Toyota (10.1).
Likewise, Tesla still has its list of fervent followers who ensure that prices They don’t have a roofbuilding on its technology, the company’s continued push toward fully autonomous driving and expansion in China.
Ark Invest founder Cathie Wood estimated in April 2022 that Tesla will be worth $2,000 per share by 2027, with a downside risk to $1,400 per share, a move she attributes to the rollout of its autonomous taxi business project.
However, the most critical maintain that autonomous vehicles are a risky bet because the technology face obstacles regulatory and engineering.
