Cutouts


@ChrisBloomstran on $TSLA's inclusion in the S&P 500  

written by Christopher Bloomstran. added 10 months ago by @icyflame ARCHIVES

tesla hype bad-business    

Our example has Tesla’s market cap growing over the next decade at “only” 10% per year to a like $2T. Car companies, with the exception of Ferrari, which makes three cars per year, don’t trade for one times sales. They trade for less. 42/ Toyota, which earns a 6% margin and 6% on capital, trades itself at an all-time-high $215B on revenues of $280B in 2019, less in 2020. 43/ Auto manufacturers trade for less than sales because they make ~3% net margins and earn that same ~3% on capital and revenues grow at ~3%. We can call the industry 3x3x3 (new material here folks). The car business is a bad business, and that’s what Tesla is trying to disrupt? 44/ The best case for shareholders: If Tesla grows the aforementioned sales for the next decade by 28% to $335B (it won’t), the stock will trade for no more than 1x sales, because it’s a CAR company. 45/

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