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P/E of 160 is nowhere near normal.

1123581321 5y ago
“or higher” was the part of the comment referencing Tesla’s P/E ratio. Normal was in quotes because there’s no prescribed value for an appropriate earnings per share, just historical averages and popular economic models.
Seanambers 5y ago
50% YoY growth for the next several years is not normal either. I think most agree that the pricing can seem unreasonably high, but plug the numbers into a spreadsheet and see where you end up. Basically the market believes that Tesla is to become one of the big players in the auto industry.
- colinmhayes 5y ago
  Tesla is worth more than all the other automakers combined. They'll have to be much more than a car maker to accomplish what this valuation requires.
  - Seanambers 5y ago
    Other OEMS are loaded with debt which reflects in their valuation, if measured in Enterprise value Tesla vs OEMS- the numbers doesn't give so much headroom as you suggest. But yes, right now their valuation is a bit high, but reflect on this ; Tesla is in a net cash position, have already the infrastructure and technology to make electric cars. They now have to replicate/duplicate, create new models and markets, but they have a very solid footing within the EV space. The other OEMS is laden with debt which was used to build outdated factories and invested in technologies which suddenly have a payback period in the singles, instead of decades - and they still must invest heavily into EVs to maintain their market share and service their debt. The incumbent OEMS are having to run the gauntlet of the valley of death; Falling demand for gas/diesel while at the same time investing heavily into EV production. While beeing loaded up with debt.
rcMgD2BwE72F 5y ago
Profits will double in the next 12-18 months (https://www.youtube.com/watch?v=kA4D3VZv2C8 https://www.youtube.com/watch?v=kA4D3VZv2C8), revenues will continue to grow by >50% for years (95% of sales were only from one platform, the Model 3/Y), and the economies of scale are just starting to materialize. With that in mind, I find their P/E extremely low.

“or higher” was the part of the comment referencing Tesla’s P/E ratio. Normal was in quotes because there’s no prescribed value for an appropriate earnings per share, just historical averages and popular economic models.

Seanambers 5y ago

50% YoY growth for the next several years is not normal either. I think most agree that the pricing can seem unreasonably high, but plug the numbers into a spreadsheet and see where you end up. Basically the market believes that Tesla is to become one of the big players in the auto industry.

colinmhayes 5y ago
Tesla is worth more than all the other automakers combined. They'll have to be much more than a car maker to accomplish what this valuation requires.
- Seanambers 5y ago
  Other OEMS are loaded with debt which reflects in their valuation, if measured in Enterprise value Tesla vs OEMS- the numbers doesn't give so much headroom as you suggest. But yes, right now their valuation is a bit high, but reflect on this ; Tesla is in a net cash position, have already the infrastructure and technology to make electric cars. They now have to replicate/duplicate, create new models and markets, but they have a very solid footing within the EV space. The other OEMS is laden with debt which was used to build outdated factories and invested in technologies which suddenly have a payback period in the singles, instead of decades - and they still must invest heavily into EVs to maintain their market share and service their debt. The incumbent OEMS are having to run the gauntlet of the valley of death; Falling demand for gas/diesel while at the same time investing heavily into EV production. While beeing loaded up with debt.

rcMgD2BwE72F 5y ago

Profits will double in the next 12-18 months (https://www.youtube.com/watch?v=kA4D3VZv2C8 https://www.youtube.com/watch?v=kA4D3VZv2C8), revenues will continue to grow by >50% for years (95% of sales were only from one platform, the Model 3/Y), and the economies of scale are just starting to materialize. With that in mind, I find their P/E extremely low.