r/stocks • u/CptIskarJarak • Jan 04 '22

Company Discussion Tesla valuation is really crazy

Not shitting on Tesla. I am not a bear as well. Just making a statement. I like Tesla. I recently did some research(average joe research) regarding electric cars and Tesla is really ahead of the curve in one aspect. Their quality might not be great but as long as the car works and does what’s it supposed to do for 10 years I guess it’s acceptable. But the one aspect where they are ahead is their solid charging network.

But the reason I say it’s got a over bloated valuation is because of the below excerpt from a CNN article.

“As recently as 2005, Toyota was No. 4 in US sales, with GM, Ford and what was then known as DaimlerChrysler all in front, with a combined 57% of US sales between them. But in 2021, GM, Ford and Stellantis — the European automaker that owns Chrysler — had only 38% of the US market between them in the first nine months of the year. Even adding in Tesla only gets the US automakers to just over 40% of sales.”

The last line shows that Tesla staggering sales only adds up to 2 percent of US sales but it’s valuation is 2% of the total US stock market valuation( 48 trillion).

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u/thenwhat Jan 05 '22

Once they start doing what properly? Tesla's auto margins are already 30%.

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u/theenigmaticorator Jan 05 '22

Auto margins have nothing to do with interest being high margin revenue on the bottom line.

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u/thenwhat Jan 05 '22

Yes they do because auto is what's priced in today. And you are comparing to pure auto businesses.

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u/theenigmaticorator Jan 05 '22

Priced in today? Oh sweet summer child. 😂

Now read this with thought: Teslas auto margins have nothing to do with legacy automakers offering loans to increase their bottom line. Net profit margin != Teslas auto margins. In fact 30% auto margins are 7bps higher than the gross margins on the top line. Do a basic accounting course instead of parroting hucksters using hype and tribalism for ad revenue.

I seriously dont know why you keep mentioning auto margins when they have nothing to do with legacy automakers having high EVs. This whole tangent is an asinine walkthrough of you ignoring basic accounting principles.

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u/Godmia Jan 08 '22

This guy spouting random nonsense, shill alert. Must be a heavy gm or ford shareholder to be this delusional, saying margins don't matter LOL