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Profitable or not is kinda meaningless since they just reinvest it all anyway, I think revenue growth is more important at this point. https://www.nasdaq.com/sy

Profitable or not is kinda meaningless since they just reinvest it all anyway, I think revenue growth is more important at this point. https://www.nasdaq.com/symbol/tsla/financials?query=income-statement https://www.nasdaq.com/symbol/tsla/financials?query=income-s... a la amazon: http://www.businessinsider.com/amazon-revenue-vs-profit-2016-1 http://www.businessinsider.com/amazon-revenue-vs-profit-2016...

bryanlarsen 8y ago
It's true that revenue and revenue growth is probably more important than earnings for Tesla's stock price, but Tesla has two challenges that Amazon doesn't have: - access to capital is getting tight - Tesla has less ability than Amazon to spin the story that "we can turn down our reinvestment at any time to turn on profits"
- adventured 8y ago
  It's a fair comparison, although not to the present Amazon. The Amazon of today is financially entirely different to the one from 15 years ago. Amazon nearly went bankrupt after the dotcom bubble era. They were drowning in particularly bad debt and red ink for years. After the dotcom bubble their financing abilities almost entirely dried up, the stock collapsed by ~93% or so. It was almost universally expected that they would not survive, culminating with the infamous Barron's Amazon.bomb story and a parade of stories thereafter. For the next three or so years after that story, bankruptcy was the anticipated end by the press and analysts. Tesla today, when you look at how they're being discussed by the press + analysts, and their financials, looks similar to Amazon's general condition back then (Tesla's growth is both faster and its red ink is greater, than Amazon was back then). For reference, Amazon had $1.6b in sales for 1999 with a $719m loss, and a $30b plus market cap at the peak of the dotcom bubble. Tesla will probably hit around $17-$18 billion in sales for 2018. If the market lets out - the supportive environment broadly - you'll see Tesla's stock crater unless their burn rate is very sharply reduced. They'll suffer the same financing concerns that pushed Amazon's stock down to $5.51 / share in 2001.
  - qaq 8y ago
    30% of tesla's float is shorted and yet price is pretty high
  - deepGem 8y ago
    Very true but somehow Wall St. is valuing Tesla very differently than they valued Amazon 15 years ago. Tesla's stock hasn't gone down that much, there's volatility but not the near 100% crash that struck Amazon. On the flip side, Tesla has needed a lot more capital than Amazon and they have issued a lot more shares to raise that capital (close to 12B now). I don't think Tesla's stock price, despite it's volatility reflects it's debt economics.
    - ghaff 8y ago
      Yes. But generally today's valuation lens on a lot of these stocks looks more like the 1999 one than the 2001 one.
  - thisisit 8y ago
    This is interesting. So, you are saying comparing two vastly different industries - eCommerce and car manufacturing - is a fair comparison? This ignores the fact that car manufacturing is more capital intensive. Additionally, what about the comparison between capital climates both these companies have to go through? Amazon taking on debt had their interest obligations reducing. Interest rates started out at 5% in 1999 and then saw going as low as 1% in 2002. Increasing to 5.25 before going back to 1% again. In comparison, Tesla has been operating under record low rates of less than 1%. The only way from here is uphill. Source for rates: https://www.thebalance.com/fed-funds-rate-history-highs-lows-3306135 https://www.thebalance.com/fed-funds-rate-history-highs-lows...
thisisit 8y ago
Amazon is an eCommerce company with low overheads and costs which dint scale. If it grows from 1 million to 10 million orders the cost magnitude might not change that much. Tesla on the other hand is into manufacturing. It will see some of it's costs scale as well even when it is doing better.

bryanlarsen 8y ago

It's true that revenue and revenue growth is probably more important than earnings for Tesla's stock price, but Tesla has two challenges that Amazon doesn't have: - access to capital is getting tight - Tesla has less ability than Amazon to spin the story that "we can turn down our reinvestment at any time to turn on profits"

adventured 8y ago
It's a fair comparison, although not to the present Amazon. The Amazon of today is financially entirely different to the one from 15 years ago. Amazon nearly went bankrupt after the dotcom bubble era. They were drowning in particularly bad debt and red ink for years. After the dotcom bubble their financing abilities almost entirely dried up, the stock collapsed by ~93% or so. It was almost universally expected that they would not survive, culminating with the infamous Barron's Amazon.bomb story and a parade of stories thereafter. For the next three or so years after that story, bankruptcy was the anticipated end by the press and analysts. Tesla today, when you look at how they're being discussed by the press + analysts, and their financials, looks similar to Amazon's general condition back then (Tesla's growth is both faster and its red ink is greater, than Amazon was back then). For reference, Amazon had $1.6b in sales for 1999 with a $719m loss, and a $30b plus market cap at the peak of the dotcom bubble. Tesla will probably hit around $17-$18 billion in sales for 2018. If the market lets out - the supportive environment broadly - you'll see Tesla's stock crater unless their burn rate is very sharply reduced. They'll suffer the same financing concerns that pushed Amazon's stock down to $5.51 / share in 2001.
- qaq 8y ago
  30% of tesla's float is shorted and yet price is pretty high
- deepGem 8y ago
  Very true but somehow Wall St. is valuing Tesla very differently than they valued Amazon 15 years ago. Tesla's stock hasn't gone down that much, there's volatility but not the near 100% crash that struck Amazon. On the flip side, Tesla has needed a lot more capital than Amazon and they have issued a lot more shares to raise that capital (close to 12B now). I don't think Tesla's stock price, despite it's volatility reflects it's debt economics.
  - ghaff 8y ago
    Yes. But generally today's valuation lens on a lot of these stocks looks more like the 1999 one than the 2001 one.
- thisisit 8y ago
  This is interesting. So, you are saying comparing two vastly different industries - eCommerce and car manufacturing - is a fair comparison? This ignores the fact that car manufacturing is more capital intensive. Additionally, what about the comparison between capital climates both these companies have to go through? Amazon taking on debt had their interest obligations reducing. Interest rates started out at 5% in 1999 and then saw going as low as 1% in 2002. Increasing to 5.25 before going back to 1% again. In comparison, Tesla has been operating under record low rates of less than 1%. The only way from here is uphill. Source for rates: https://www.thebalance.com/fed-funds-rate-history-highs-lows-3306135 https://www.thebalance.com/fed-funds-rate-history-highs-lows...

thisisit 8y ago

Amazon is an eCommerce company with low overheads and costs which dint scale. If it grows from 1 million to 10 million orders the cost magnitude might not change that much. Tesla on the other hand is into manufacturing. It will see some of it's costs scale as well even when it is doing better.