Does Tesla still have the potential to grow?
According to Tesla's financial statement and the general motor's financial statement, a comparison can be made.
Tesla General motors
Market cap: $635B $83B
EBITDA: $4.27B $13.6B
forward P/E 161 11
price/rev 23 0.7
- market cap:
Enterprise Value = Market Cap + Debt - Cash
From this formula, we can calculate market cap of TSLA is 4x larger than the normal motors.
- P/E ratio: also called price per earning ratio is one of the most popular ratios to measure the valuation of a stock. Tesla trades 161 times estimated future earnings. Which is about 11x more than the general motors. In this single valuation method, Tesla worth more 10x than general motors stocks. And this conclusion can also be made by private/revenue, in this case, the value of TSLA is even higher than the valuation based on the P/E ratio.
- Stability: means the stability of stock price when facing negative news. This week, negative news about the brake raged in the Chinese market. In efficient market, the stock price is highly influenced by the news. However, TSLA's stock price did not fluctuate largely and grows from 714.63 on Monday to 729.40 on Friday. which shows the stock has high stability.
- policy and news: carbon emission is an essential problem faced all over the world. Tesla is a leading brand of new energy vehicles. Their business not only formed by selling cars but also selling pollution permits to carbon emission companies. Which will be a promising emerging industries.
All data used came from https://www.tradestation.com/insights/2021/04/08/tesla-overvalued-comparison-gm-ford/