RACE vs TSLA

[Hogfighter]

One of the most difficult endeavors regarding TSLA is figuring a proper valuation. Comparisons to F and GM are largely meaningless, as they are completely different companies.

I prefer to compare TSLA to RACE. RACE has a market cap of $22B, revenues of approximately $3.5B....giving them a price/revenue of 6. Annual profit of around $600M giving them a p/e in the neighborhood of 35. Growth is slight, but they are in a niche market and have no ability to significantly grow market share.

Extrapolating the Q3 numbers, TSLA’s market cap of $56B gives them an annualized price/revenue of 2. Their p/e is in the neighborhood of 25 (more difficult to extrapolate, but using non-GAAP net income of $500M). TSLA made close to RACE’s annual profit in a single quarter, even with the inefficiencies inherent in massive growth rates. Growth has been eye-watering and is showing no signs of slowing down. We haven’t even touched on the potential of Tesla Energy.

So the comparisons reveal a growth company valued less in both price/revenue and p/e than a stalwart. This is being completely overlooked by the market.

 

[farzyness]

One of the most difficult endeavors regarding TSLA is figuring a proper valuation. Comparisons to F and GM are largely meaningless, as they are completely different companies.

I prefer to compare TSLA to RACE. RACE has a market cap of $22B, revenues of approximately $3.5B....giving them a price/revenue of 6. Annual profit of around $600M giving them a p/e in the neighborhood of 35. Growth is slight, but they are in a niche market and have no ability to significantly grow market share.

Extrapolating the Q3 numbers, TSLA’s market cap of $56B gives them an annualized price/revenue of 2. Their p/e is in the neighborhood of 25 (more difficult to extrapolate, but using non-GAAP net income of $500M). TSLA made close to RACE’s annual profit in a single quarter, even with the inefficiencies inherent in massive growth rates. Growth has been eye-watering and is showing no signs of slowing down. We haven’t even touched on the potential of Tesla Energy.

So the comparisons reveal a growth company valued less in both price/revenue and p/e than a stalwart. This is being completely overlooked by the market.

Pretty good comparison. I think as the market begins to understand this further and Tesla continues to post quarterly profits, it will become a story that will be tough to slow down.

 

[Hogfighter]

Pretty good comparison. I think as the market begins to understand this further and Tesla continues to post quarterly profits, it will become a story that will be tough to slow down.

True. It’ll take a few quarters to let the numbers sink in.

 

[jaguar36]

You're assuming that Tesla will show a profit next quarter, which I think is far from given.

Regardless Ferrari is a bad long term play, they are milking their existing customer base and cashing in on their exclusivity at the expensive of future earnings.

 

[Hogfighter]

You're assuming that Tesla will show a profit next quarter, which I think is far from given.

I view this as a thought experiment. I’m certainly assuming that from July 2018 to July 2019 Tesla will be showing profits of at least $500M on average per quarter. Of course there will be those who disagree.