You can still read the excellent piece on Tesla P/E by Dimitris Koutsoubos on Seeking Alpha from Jan 15. His conclusion in January (TSLA @ $811) was:I like the sound of that. Can you go more into P/E and how you use it to judge companies?
I agree with you. I’m a sound/lighting guy so if I was in that room I would be feeling odd at a few of the moments. More critical of the presentation than the info!
Conclusion
It is easy for everybody to see both the increasing price of the stock and the tremendous growth of the underlying business. What is less obvious and very hard to determine is whether Tesla is going to reach the business size that the market has already priced in.
Under the first two scenarios, the “hard reality” and the “feasible”, the fair value comes in at $51.40 and $79.28, respectively, promising huge losses for the current buyers. Early investors who have bought much lower, have apparently secured decent profits, even if those scenarios come true. However, they may end up with less than what the market currently tricks them into believing — mostly unrealized “paper earnings”. Only the “dream” scenario justifies the current price and can sustain their huge earnings, but it does not offer any further upside.
Price is different from value, and it’s an essential part of investing to understand the tricks that the market plays on us, so we can reliably assess our performance and competence. If we can’t measure it, we won’t improve, we won’t protect ourselves.
Happy New Year!
Dimitrios Koutsoubos
Jan 15, 2021
The 3 Scenarios For Tesla's Value (NASDAQ:TSLA)
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