2020 tesla (TSLA-US) shares soared all the way to the beginning of the year so far has soared more than 650%, however, some analysts believe that, taking into account the fundamental factors, at this stage Tesla shares have presented a serious overvaluation, and even in a bubble state.
After officially being included in the S&P S&P 500 index, Tesla closed down nearly 6.5% on Monday (21) and continued to sink in the U.S. stock market on Tuesday (22), temporarily at $630.53, down nearly 3%, and its market value has fallen below $600 billion.
Tesla stock price chart
Vitali Kalesnik, partner and head of research at Research Affiliates, said Tesla shares are already overpriced, considering sales volume, car production and other fundamentals.
He believes it would take very aggressive assumptions to justify Tesla’s current valuation to do so. “Tesla’s profit margins are essentially on par with other peers, which means Tesla is in bubble territory at this stage of valuation.
Tesla shares have soared more than 650% so far this year, benefiting from key events, including the resumption of work at Tesla’s California plant in May after an epidemic and state lawsuits, the announcement of four consecutive quarters of profits in July, and car shipments exceeding expectations. Tesla’s stock price also received a boost when it announced its first stock split in the summer.
In addition, after the announcement last month that it would be included in the S&P 500 Index on December 21, Tesla’s stock price then soared to a record high.
Kalesnik warned that when Tesla was included in the S&P 500, investors had to buy at a higher price, which would likely have very bad consequences for investors.
Competition from Apple Apple Car?
Optimism for Tesla has also waned following an earlier report by Reuters that Apple plans to produce the Apple Car, an electric car, in 2024. Although the Apple Car is still a few years away, Kalesnik believes that investors are not fully aware of the fierce competition in the electric car market.
Tesla does have some advantages in the EV market, which many competitors agree on. However, competitors have much larger spending caps than Tesla, and they are making very aggressive, multi-billion dollar investment plans,” Kalesnik said.
Kalesnik said, Volkswagen (Volkswagen) has already started production of electric vehicles, Toyota (Toyota) is also promoting related plans, and recently made significant progress in the development of solid-state battery technology, which will completely disrupt the electric vehicle industry.
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