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Tesla made more money last quarter than Ford, GM and Toyota. Toyota made 10x the number of cars as Tesla. Tesla is growing vehicle production 50% YoY, while gro

Tesla made more money last quarter than Ford, GM and Toyota. Toyota made 10x the number of cars as Tesla. Tesla is growing vehicle production 50% YoY, while growing profit even faster (having barely hit economies of scale yet). Tesla has a backlog of orders approaching a year in many regions. Everyone else is losing money on their EVs and can't make them in volume production, can't find the batteries for them, because they started 10 years too late. That's the reason for Tesla's valuation, it's pretty simple. Whether you believe the competition will catch up, or Tesla will fail for some other reason is besides the point. I'm just trying to show that the current valuation is not "insane" given current trends, there's a very real logic to it and not (completely) FOMO. Correction: Toyota's earnings were higher than Tesla, it was operating income that was higher (remembered it wrong).

bink 4y ago
All of those things can be true and Tesla's stock can also be over-valued. A rapidly growing and popular company doesn't justify any arbitrary valuation.
- freeflight 4y ago
  Indeed, which also begs the question; How much of that growth is driven by the over-valuation? Particularly as Musk is no stranger to using creative accounting techniques, and sheer speculation, to make his companies suddenly look more profitable [0] There's also him leveraging his other companies to create growth among each other. Like Starlink being a major customer for SpaceX. Which could either be really smart, or the making of a really impressive house of cards. [0] https://www.cnbc.com/2021/04/26/teslas-bitcoin-speculation-helped-boost-profits-this-quarter.html https://www.cnbc.com/2021/04/26/teslas-bitcoin-speculation-h...
BeetleB 4y ago
> Tesla made more money last quarter than Ford, GM and Toyota. Net income was higher for Toyota - almost double that of Tesla.
- martindbp 4y ago
  Yes, my bad, it was operating income that was higher for Tesla.
legitster 4y ago
I'm not sure where you are getting those numbers from. Ford had $37b in revenue Q4. Tesla had $16b. Tesla is an impressive company that's managed to finally be profitable. But currently their market cap is higher than all other auto manufacturers combined. > Everyone else is losing money on their EVs and can't make them in volume production, can't find the batteries for them, you do the math. That's the thing, this space is getting incredibly crowded this year. Kia/Hyundai, Ford, and VW are all putting out very impressive mass-market EVs that are selling like hotcakes.
- martindbp 4y ago
  Earnings, not revenue
  - deleted 4y ago
    [deleted]
  - algoatecorn 4y ago
    What is your definition of earnings? Because Toyota's net income far exceeds Tesla's
    - martindbp 4y ago
      My bad, not earnings, it was operating income: https://twitter.com/SawyerMerritt/status/1524254013025357824 https://twitter.com/SawyerMerritt/status/1524254013025357824
      - algoatecorn 4y ago
        No worries, but I'm not sure what notion you're trying to craft with that stat. Toyota had far more revenue and profit. Operating income was lower... so what? Tells me Toyota has been spending money to carve a huge chunk out of the EV sector. Maybe they are late. Maybe Tesla will show that it's current valuation holds. I doubt it.
    - Closi 4y ago
bradfa 4y ago
Looking at a single quarter is not a great way to compare large companies. Even looking at just a single year is not a great way, but for comparison, in 2021 Tesla had revenue of $54 billion and net income of $5.5 billion. In 2021 Ford had revenue of $136 billion and net income of $17.9 billion. Toyota had similar net income as Ford in 2021. Yes, in the most recently reported quarter Ford lost money. And in previous years Ford has also lost money. But so has Tesla. Looking at Tesla as a traditional automaker is not fair to Tesla. They don't want to be a traditional automaker, I get the impression they want to be more like General Electric was back 50-100 years ago, making all kinds of things and being rather innovative.
- deleted 4y ago
  [deleted]
- martindbp 4y ago
  For Tesla it makes way more sense to use the annualized Q4 numbers vs Ford total 2021 because Tesla grows like crazy, that's the whole point. It doesn't matter that Tesla lost money in the past if they're printing it like there's no tomorrow now, with nothing stopping them (except lock downs). Traditional autos ICE sales have been decreasing and will continue to do so, and they're trying to replace it with EV sales they lose money on, and can't make fast enough to replace their lost ICE sales. Either way, I get it that you can look at the same data and come to another conclusion, but clearly, for a lot of investors they look at the growth, the barrier to entry, the overall trends and that's why Tesla is valued as it is.
  - piva00 4y ago
    > with nothing stopping them (except lock downs) And maybe competition? The market is booming but other automakers are starting to have competitive lines. I want to see what Tesla could have in their sleeve to ever become as desirable as they were the past years... I'm not sure if all this hope in eternal growth of Tesla will hold.
    - ajsnigrutin 4y ago
TheDarkestSoul 4y ago
Even if that all were true (it's not), Tesla could be the most important and revolutionary car company since Model-T era Ford and _still_ be insanely overvalued. Before their recent stock slide they were worth as much as every other major manufacturer _combined_. Their P/E ratio hovers around 300. Mercedes-Benz hovers around 5.
- martindbp 4y ago
  Teslas forward P/E, which is way more indicative of the future of the company, is 51: https://finbox.com/NASDAQGS:TSLA/explorer/pe_fwd#:~:text=Tesla's%20p%2Fe%20ratio%20(fwd)%20is%2056.0x https://finbox.com/NASDAQGS:TSLA/explorer/pe_fwd#:~:text=Tes.... I admit Q2 will be lower than Q1, but Q4 this year will likely see an even lower forward P/E if price remains the same. Sure, they could be overvalued, I'm just trying to explain why it's valued as it is for those that think it's "insane". Mercedes hovers around 5 because many investors believe they could go bankrupt if they can't successfully transition to EVs. GM, for example, will very likely go bankrupt (again). Many others as well.
algoatecorn 4y ago
Can you link a source for the Toyota vs Tesla claim? From what I saw on the reports it looks like Toyota had way more revenue and net income. Maybe I'm interpreting it incorrectly
randcraw 4y ago
Tesla's net income in 2021 was $5.5B, GM $8.8B, Ford $11.5B, Toyota $28B. Tesla's PE ratio is 99.6, GM 5.6, Ford 10.4, Toyota 8.25. Tesla's market cap is $1,061B, GM $85B, Ford's $83B, Toyota $254B. The state of Tesla's stock is simply unreal, not based on fundamentals but on inertia and hype.
- gitfan86 4y ago
  Take this logic and compare AAPL and RIMM in 2009. This is why people are buying TSLA. If you think that GM is going to successfully pivot to EVs and that Tesla will not continue to grow 50% a year, that is a fine opinion to have, but if you look at CNBC clips from 2009 you will see very similar comparisons being made around AAPL and RIMM, to what you are saying today.
  - kenchan 4y ago
    "Experts" have been telling us to sell $TSLA for over a decade..
- martindbp 4y ago
  That's just an extremely simplistic analysis, as if there is absolutely no change in the future. Tesla's forward P/E is currently 51. In a years time it might be 30-35. A year after that, well you can see where this is going. There are definitely a few years worth of growth baked in. But when you compare the valuation to the likes of GM, also consider the possibility that they will simply not survive the transition to EVs. They already went bankrupt once, and sales have declined every year since 2016, please have a look at this graph: https://www.statista.com/statistics/225326/amount-of-cars-sold-by-general-motors-worldwide/ https://www.statista.com/statistics/225326/amount-of-cars-so... For a great number of reasons, many traditional OEMs will find the next decade very difficult, and that's reflected in their current P/E.
adam_arthur 4y ago
It's not about revenue, it's about valuation. The revenue can be whatever you want, the valuation determines long run returns. Tesla could be priced at 20x PE or 100x PE and be the same company. Your returns will be vastly different between the two scenarios. OPs point, which is pretty obviously objectively true, is that valuations far exceeded future yields by any fundamental valuation metric. Tech has been valued as if every company will be a pseudo Monopoly like the FAANG companies, which is very unlikely to be true
- BobbyJo 4y ago
  I mostly agree, I just feel the need that valuation metrics rely on past values, which aren't as useful depending on the company you're talking about. If a company has net income X, but a new high margin product launching next month that could easily double or triple that, their P/E will look ridiculous but , in fact, be quite reasonable.
  - adam_arthur 4y ago
    The reason to use past values is because they're known. Anything anticipating the future is speculation, and relies on many assumptions. Check analyst earnings estimates for S&P companies for 2008 and you may be surprised what you find. I fully believe Tesla can be the number one auto maker, and get self driving working to a sufficient extent to be marketable. But what's the upside? A few X at most. To me that risk/reward is pretty awful... many more attractive companies selling at 1x PS and fast growth/smaller market cap that can go up 10x easily over a few years
- 01100011 4y ago
  Talk to a Tesla zealot and this is the story: Tesla masters self-driving and their robotaxis take over global transportation leading to complete and unending dominance. It's almost as if none of them has ever run a business or even studied history. It's best not to try to reason with them at this point. Just smile and walk away. Over time they'll figure it out.
justapassenger 4y ago
Tesla’s source of profit is mainly from 2 things: - they’re selling cars that have quality of $25k cars for $60k - they’re basically a first manufacturer that sells Chinese made cars to western world at scale (all their other operations are either not ramped up or unprofitable) Power of their brand is insane. But they seem to be mainly raiding it and diminishing it. Music will likely stop one day.
melenaboija 4y ago
I don't know about Tesla production forecast and how its stock value can be interpreted but there is something interesting that Marques Brownlee said few days ago about pre ordering cars [1]. Basically, if people that put down the $250k for a Tesla Roadster founder edition to finance the company and for a product they still don't have into Tesla stock the would now have $4.5MM. Not complaining about Tesla stock price as it has the price that people is willing to pay but to me this is definitely a redefinition on what people care when deciding where to invest. [1] https://www.youtube.com/shorts/vCA79HTry0A?&ab_channel=RoastedWorld https://www.youtube.com/shorts/vCA79HTry0A?&ab_channel=Roast...

bink 4y ago

All of those things can be true and Tesla's stock can also be over-valued. A rapidly growing and popular company doesn't justify any arbitrary valuation.

freeflight 4y ago
Indeed, which also begs the question; How much of that growth is driven by the over-valuation? Particularly as Musk is no stranger to using creative accounting techniques, and sheer speculation, to make his companies suddenly look more profitable [0] There's also him leveraging his other companies to create growth among each other. Like Starlink being a major customer for SpaceX. Which could either be really smart, or the making of a really impressive house of cards. [0] https://www.cnbc.com/2021/04/26/teslas-bitcoin-speculation-helped-boost-profits-this-quarter.html https://www.cnbc.com/2021/04/26/teslas-bitcoin-speculation-h...

BeetleB 4y ago

> Tesla made more money last quarter than Ford, GM and Toyota. Net income was higher for Toyota - almost double that of Tesla.

martindbp 4y ago
Yes, my bad, it was operating income that was higher for Tesla.

legitster 4y ago

I'm not sure where you are getting those numbers from. Ford had $37b in revenue Q4. Tesla had $16b. Tesla is an impressive company that's managed to finally be profitable. But currently their market cap is higher than all other auto manufacturers combined. > Everyone else is losing money on their EVs and can't make them in volume production, can't find the batteries for them, you do the math. That's the thing, this space is getting incredibly crowded this year. Kia/Hyundai, Ford, and VW are all putting out very impressive mass-market EVs that are selling like hotcakes.

martindbp 4y ago
Earnings, not revenue
- deleted 4y ago
  [deleted]
- algoatecorn 4y ago
  What is your definition of earnings? Because Toyota's net income far exceeds Tesla's
  - martindbp 4y ago
    My bad, not earnings, it was operating income: https://twitter.com/SawyerMerritt/status/1524254013025357824 https://twitter.com/SawyerMerritt/status/1524254013025357824
    - algoatecorn 4y ago
      No worries, but I'm not sure what notion you're trying to craft with that stat. Toyota had far more revenue and profit. Operating income was lower... so what? Tells me Toyota has been spending money to carve a huge chunk out of the EV sector. Maybe they are late. Maybe Tesla will show that it's current valuation holds. I doubt it.
  - Closi 4y ago

bradfa 4y ago

Looking at a single quarter is not a great way to compare large companies. Even looking at just a single year is not a great way, but for comparison, in 2021 Tesla had revenue of $54 billion and net income of $5.5 billion. In 2021 Ford had revenue of $136 billion and net income of $17.9 billion. Toyota had similar net income as Ford in 2021. Yes, in the most recently reported quarter Ford lost money. And in previous years Ford has also lost money. But so has Tesla. Looking at Tesla as a traditional automaker is not fair to Tesla. They don't want to be a traditional automaker, I get the impression they want to be more like General Electric was back 50-100 years ago, making all kinds of things and being rather innovative.

deleted 4y ago
[deleted]
martindbp 4y ago
For Tesla it makes way more sense to use the annualized Q4 numbers vs Ford total 2021 because Tesla grows like crazy, that's the whole point. It doesn't matter that Tesla lost money in the past if they're printing it like there's no tomorrow now, with nothing stopping them (except lock downs). Traditional autos ICE sales have been decreasing and will continue to do so, and they're trying to replace it with EV sales they lose money on, and can't make fast enough to replace their lost ICE sales. Either way, I get it that you can look at the same data and come to another conclusion, but clearly, for a lot of investors they look at the growth, the barrier to entry, the overall trends and that's why Tesla is valued as it is.
- piva00 4y ago
  > with nothing stopping them (except lock downs) And maybe competition? The market is booming but other automakers are starting to have competitive lines. I want to see what Tesla could have in their sleeve to ever become as desirable as they were the past years... I'm not sure if all this hope in eternal growth of Tesla will hold.
  - ajsnigrutin 4y ago

TheDarkestSoul 4y ago

Even if that all were true (it's not), Tesla could be the most important and revolutionary car company since Model-T era Ford and _still_ be insanely overvalued. Before their recent stock slide they were worth as much as every other major manufacturer _combined_. Their P/E ratio hovers around 300. Mercedes-Benz hovers around 5.

martindbp 4y ago
Teslas forward P/E, which is way more indicative of the future of the company, is 51: https://finbox.com/NASDAQGS:TSLA/explorer/pe_fwd#:~:text=Tesla's%20p%2Fe%20ratio%20(fwd)%20is%2056.0x https://finbox.com/NASDAQGS:TSLA/explorer/pe_fwd#:~:text=Tes.... I admit Q2 will be lower than Q1, but Q4 this year will likely see an even lower forward P/E if price remains the same. Sure, they could be overvalued, I'm just trying to explain why it's valued as it is for those that think it's "insane". Mercedes hovers around 5 because many investors believe they could go bankrupt if they can't successfully transition to EVs. GM, for example, will very likely go bankrupt (again). Many others as well.

algoatecorn 4y ago

Can you link a source for the Toyota vs Tesla claim? From what I saw on the reports it looks like Toyota had way more revenue and net income. Maybe I'm interpreting it incorrectly

randcraw 4y ago

Tesla's net income in 2021 was $5.5B, GM $8.8B, Ford $11.5B, Toyota $28B. Tesla's PE ratio is 99.6, GM 5.6, Ford 10.4, Toyota 8.25. Tesla's market cap is $1,061B, GM $85B, Ford's $83B, Toyota $254B. The state of Tesla's stock is simply unreal, not based on fundamentals but on inertia and hype.

gitfan86 4y ago
Take this logic and compare AAPL and RIMM in 2009. This is why people are buying TSLA. If you think that GM is going to successfully pivot to EVs and that Tesla will not continue to grow 50% a year, that is a fine opinion to have, but if you look at CNBC clips from 2009 you will see very similar comparisons being made around AAPL and RIMM, to what you are saying today.
- kenchan 4y ago
  "Experts" have been telling us to sell $TSLA for over a decade..
martindbp 4y ago
That's just an extremely simplistic analysis, as if there is absolutely no change in the future. Tesla's forward P/E is currently 51. In a years time it might be 30-35. A year after that, well you can see where this is going. There are definitely a few years worth of growth baked in. But when you compare the valuation to the likes of GM, also consider the possibility that they will simply not survive the transition to EVs. They already went bankrupt once, and sales have declined every year since 2016, please have a look at this graph: https://www.statista.com/statistics/225326/amount-of-cars-sold-by-general-motors-worldwide/ https://www.statista.com/statistics/225326/amount-of-cars-so... For a great number of reasons, many traditional OEMs will find the next decade very difficult, and that's reflected in their current P/E.

adam_arthur 4y ago

It's not about revenue, it's about valuation. The revenue can be whatever you want, the valuation determines long run returns. Tesla could be priced at 20x PE or 100x PE and be the same company. Your returns will be vastly different between the two scenarios. OPs point, which is pretty obviously objectively true, is that valuations far exceeded future yields by any fundamental valuation metric. Tech has been valued as if every company will be a pseudo Monopoly like the FAANG companies, which is very unlikely to be true

BobbyJo 4y ago
I mostly agree, I just feel the need that valuation metrics rely on past values, which aren't as useful depending on the company you're talking about. If a company has net income X, but a new high margin product launching next month that could easily double or triple that, their P/E will look ridiculous but , in fact, be quite reasonable.
- adam_arthur 4y ago
  The reason to use past values is because they're known. Anything anticipating the future is speculation, and relies on many assumptions. Check analyst earnings estimates for S&P companies for 2008 and you may be surprised what you find. I fully believe Tesla can be the number one auto maker, and get self driving working to a sufficient extent to be marketable. But what's the upside? A few X at most. To me that risk/reward is pretty awful... many more attractive companies selling at 1x PS and fast growth/smaller market cap that can go up 10x easily over a few years
01100011 4y ago
Talk to a Tesla zealot and this is the story: Tesla masters self-driving and their robotaxis take over global transportation leading to complete and unending dominance. It's almost as if none of them has ever run a business or even studied history. It's best not to try to reason with them at this point. Just smile and walk away. Over time they'll figure it out.

justapassenger 4y ago

Tesla’s source of profit is mainly from 2 things: - they’re selling cars that have quality of $25k cars for $60k - they’re basically a first manufacturer that sells Chinese made cars to western world at scale (all their other operations are either not ramped up or unprofitable) Power of their brand is insane. But they seem to be mainly raiding it and diminishing it. Music will likely stop one day.

melenaboija 4y ago

I don't know about Tesla production forecast and how its stock value can be interpreted but there is something interesting that Marques Brownlee said few days ago about pre ordering cars [1]. Basically, if people that put down the $250k for a Tesla Roadster founder edition to finance the company and for a product they still don't have into Tesla stock the would now have $4.5MM. Not complaining about Tesla stock price as it has the price that people is willing to pay but to me this is definitely a redefinition on what people care when deciding where to invest. [1] https://www.youtube.com/shorts/vCA79HTry0A?&ab_channel=RoastedWorld https://www.youtube.com/shorts/vCA79HTry0A?&ab_channel=Roast...