Since the beginning of 2020, Teslas share price has risen by more than 70%. Since the beginning of June last year, its share price has risen by more than 300%.
Teslas skyrocketing share price has attracted a lot of controversy. For example, he Xiaopeng, the founder of Xiaopeng automobile, thinks that its value is overvalued, and he cant understand the logic behind the overvalued value for the time being. Li Xiang, the founder of ideal automobile, and other loyal supporters support Tesla, saying that Tesla will not be able to develop electric and intelligent traditional enterprises.
Despite the controversy, automotive suppliers in fields ranging from batteries to electronics to autonomous driving have revealed that they want to cooperate with Tesla and become its supplier even at a loss.
Behind the soaring stock price: the performance in the fourth quarter of last year was excellent, and there is a large space for future development
On the same day, Tesla shares rose 11.62% in after hours trading, hitting a record high and breaking the $600 mark for the first time, reaching $648.50. The shares rose 10.3%, 1.5%, 19.9% and 13.7% respectively in the following days. On February 4, the share price hit a new record high of $968.99.
According to Teslas financial report for the fourth quarter of 2019, the companys revenue for the quarter was $7.38 billion, an increase of 2% year-on-year (compared with the same period of last year); the net profit attributable to common shareholders was $105 million, and the free cash flow was $1.01 billion, higher than Wall Streets expectation for Tesla; in the whole year of 2019, Teslas revenue was $24.578 billion, an increase of more than $4 billion compared with $21.46 in the same period of last year; Net loss for the year narrowed to $862 million, compared with $976 million in the same period last year. In terms of sales volume, Tesla delivered 367500 vehicles in the whole year, up 50% year on year.
In addition, Teslas cost efficiency has improved significantly. A review of Teslas results shows that in the fourth quarter of last year, revenue per vehicle increased by about 19% compared with the previous quarter, although the revenue per vehicle increased by only 3%.
Reuters pointed out that Teslas share price has performed well this year, thanks to the companys joint-venture battery business with Panasonic achieving quarterly profits for the first time.
From the perspective of all parties of futu securities, Teslas share price soared for two reasons. First of all, the global new energy vehicle industry has accelerated. The cooperation between Tesla and Ningde times indicates that the industrial development will be greatly accelerated, the cost will be greatly reduced, and the demand will continue to grow. At present, the market share of pure electric new energy vehicles in the world is only about 2% - 3%.
Gary black, the former chief executive of AEGON asset management in the Netherlands, also believes that as the market share of electric vehicles in the United States increases from about 3% to 25%, Teslas market share increases from 2% to 10%, and Teslas profits may increase from $1.4 billion predicted by Wall Street this year to $15 billion in 2024. Based on this $15 billion return, assuming a price earnings ratio of 25 times, Teslas market value will reach $360 billion, or about $2000 per share.
With the requirement of carbon emission from all countries in the world, it has become a consensus of vehicle enterprises to develop pure electric vehicles. As a result, the UK government plans to terminate the sale of new gasoline, diesel and hybrid vehicles by 2035, five years ahead of the original plan.
Last year, I fell into a bad business and was about to go bankrupt
The recent rise in Teslas share price seems to indicate that the market has forgotten that Tesla was frequently involved in the rumor that it was going bankrupt due to poor management last year.
In addition, vehicle delivery in the first quarter was 31% lower than that in the fourth quarter. Under the influence of bad news such as bad revenue and delivery, Teslas share price fell all the way from $247.6 on April 25 to $178.97 on June 3, nearly doubling from $347 at the beginning of the year. In May 2019, Adam Jonas, an analyst at Morgan Stanley, said he could reduce Teslas share price forecast to $10 from $97.
After that, Tesla announced its financing plan and China market plan, and lowered the price of models and modelx three times in a row to stimulate sales. Thanks to Teslas efforts, its share price gradually began to rise to around $260.
On July 25, 2019, Teslas second quarter financial report released that although its revenue was significantly higher than that of the first quarter, it was still lower than the market expectation. The companys share price fell 13.61% to $228.82 at the end of the day, with a maximum decline of 14.73%, the largest one-day decline since its listing in 2010. Teslas share price has been hovering around $230 since then until October 24.
Teslas share price actually started to keep rising after its third quarter earnings report. On October 24, 2019, Teslas third quarter financial report was released, with a net profit of US $143 million attributable to shareholders. It successfully turned the loss into profit, and the gross profit margin of the automobile business also recovered growth. In addition, Tesla said at that time that the super plant in Shanghai was about to be put into production, and the site of the European Super plant in 2021 had begun. Affected by the positive news, Tesla shares rose 17.67% to $300.
Since then, Tesla has had good news. In November 2019, Tesla electric pickup cybertruck was released, and Elon Musk, CEO of Tesla, announced that more than 200000 people had paid the deposit, and the stock price rose $336; on January 7, 2020, Shanghai Super factory officially delivered to the outside world, and on that day, U.S. stock price rose 1.93% to close at $451.54.
Is the share price overvalued?
Will Teslas share price continue to soar in the future and be overvalued?
At present, the market for Teslas prospects have been a huge difference, the calm said that do not understand, read many enthusiastically sought after.
On February 4, he Xiaopeng commented that he didnt understand and didnt see the logic of Teslas current high valuation. He Xiaopeng thinks that there will be many companies with a market value of more than $100 billion in the field of smart cars. Tesla and apple, who are interested in building cars, are strong competitors. However, there are huge differences between cars and mobile phones, which makes it difficult to form a huge winner taking all and super high gross profit. Therefore, I havent seen the current logic of Teslas overvalued value, unless it is a long-term holding
Zhang Yi (pseudonym), a senior partner of a consulting company, told surging news that Teslas current share price is a bit outrageous, and there may be some speculation. Zhang Yi believes that Tesla is indeed at the forefront of the whole industry in terms of software defined cars, but at present it has not shown enough profitability. This advantage may be exerted in the next five or six years. It is hard to say whether the market value is so much or not.
Many other bearish Tesla analysts believe that BMW, Mercedes Benz and other traditional car manufacturers will pose a survival threat to Tesla once they start to increase the production of electric vehicles.
On February 5, Li wanted to post on snowball app to support Tesla, saying that Tesla would be out of business after he totally didnt believe that any traditional enterprise developed electric and intelligent technology. Audi e-tron, Jaguar i-pace, Mercedes Benz EQC, these legendary Tesla killers, even domestic new car manufacturers, cant win. Which of these three is the opponent of ES6? Let alone Tesla who has mastered OS and AI chips.
Fang yinliang has a similar opinion. He doesnt think that in the short term, the traditional manufacturers code adding electrification will threaten Teslas survival. According to Fang yinliang, when promoting new energy vehicles, traditional automobile manufacturers should also consider avoiding competition with their non new energy vehicles. In addition, traditional automobile manufacturers should balance the relationship with dealers and change the service in the post automobile market. Tesla, on the other hand, does not have such a challenge, but also has the advantages of brand effect and unique service system. Teslas volume in China is still very small. In the future, the increase of sales volume in the medium-term and short-term market is still guaranteed. The products of traditional large factories will not have a great restriction on Tesla in the short term after coming out.
Zhang Xiang, an auto analyst, believes Teslas current high share price is a manifestation of its value as an industry leader. Zhang Xiang told surging news reporters that Teslas extensive layout in the automotive, solar and battery business areas has led the industrys energy reform and basically led the industrys future development. For the influence of traditional car factories on Tesla, Zhang Xiang believes that traditional car factories will not let Tesla be the only one, and will definitely try to squeeze Teslas market share. But Tesla has many advantages, such as pure electric vehicle and automatic driving technology. In the next 3-5 years, there will be no accidents in the top 10 auto companies and Tesla.
There are also those who believe that Tesla shares are dangerous and have bubbles because their short sellers have contributed. After all, they promised that they would never be short.
BespokeInvestmentGroup said the big gains in Teslas stock price were comparable to some of the biggest bubbles in the stock market, including the technology Internet bubble and housing related stocks before the financial crisis.
Suppliers are willing to cooperate at a loss, and car companies are not afraid of competition
Teslas continued rise in U.S. stocks has driven the share prices of relevant stocks in Chinas industrial chain up.
On February 5, Tesla concept stocks continued to keep rising. The wind Tesla index rose 5.12% on the same day, and individual stocks also set off a wave of trading stops. 11 stocks, including aotekia (002239), changal (002160), xiuqiang (300160), Ningbo Huaxiang (002048), Weitang industry (300707), molding technology (000700) and Ningde times (300750), rose.
On February 6, after the sharp fall of Teslas share price, Tesla concept shares continued to rise, the wind Tesla index rose 3.36% on the same day, and six stocks, including otelia, Delian group (002666) and Junsheng Electronics (600699), rose or fell.
In January, Tesla officially announced that the localization rate of parts in Teslas Shanghai plant is about 30%, and it is planned to increase to 70% - 80% by next July. At the end of the year, all parts will be localized.
This is a huge opportunity in the eyes of many auto suppliers. The heads of several industry chain companies told surging news reporters that they hope to take advantage of Teslas domestic opportunity to enter.
The head of an electronic industry supplier said that in order to enter the Tesla supply chain, the company formed a Tesla project team when the Shanghai Super factory was established, which he said was a common phenomenon in the industry.
The head of another supplier in the auto driving industry told surging news that it is a common phenomenon in the industry to cooperate with Tesla. Many enterprises will enter even if they lose money. This is a threshold. Only when you enter can you know what the best electric vehicle is doing. If we really cooperate with Tesla, the technical teams of both sides will have a good exchange, and the suppliers teams can learn a lot.
The head of a power battery enterprise also told the surging news reporter that cooperation with Tesla is more a manifestation of the status of the industry, which can show the strength of technology and so on. In fact, I didnt want to make money when I worked with Tesla, but once I worked with Tesla, I would like to talk about other cooperation.
In terms of automobile enterprises, the person in charge of some automobile enterprises expressed no fear of Teslas localization competition.
Ma fulie, deputy secretary of the Party committee and general manager of BAIC new energy, said in an interview with surging journalists that he was not afraid to compete with Tesla and believed that BAIC new energy was able to cope with the competition. He also said that the immaturity of Chinas new energy vehicle related industry chain has brought great growth bottlenecks to domestic enterprises. Only through Teslas competition can the technological progress of the whole new energy enterprise be promoted rapidly, and the whole industry be made bigger and better.
Yu Jingmin, deputy general manager of SAIC passenger vehicles, once said publicly that although Teslas entry into the Chinese market will bring pressure to enterprises, we welcome excellent enterprises and bring good things from all over the world to China. Tesla has many aspects to learn from. From more than 130 years of world automobile history, the automobile industry has catfish effect , which needs to stimulate some enterprises to actively participate in the market competition and activate the market.