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Market cap is a function of revenue (cars sold) & margins, not just revenue. Tesla PE is 50x, and Toyota PE is 10x. Purely on the basis of earnings: If Tesla
by beambot 4y ago
Market cap is a function of revenue (cars sold) & margins, not just revenue.
Tesla PE is 50x, and Toyota PE is 10x.
Purely on the basis of earnings: If Tesla can 5x their sales (in a rapidly expanding market) while maintaining some of their pricing power, they'll be comparable to Toyota purely on the basis of multiples. The sales needn't come exclusively from automobiles either... And then there's equity-to-debt: Tesla has $3B USD in net debt; Toyota has $153B USD in net debt -- i.e. Toyota's enterprise value would be significantly higher if they had Tesla's debt load.
- wwweston 4y agoDebt is a decent point. Margins are not going to hold for Tesla. They had the privilege of being the only strong EV vehicle on the market. Those days are gone. They had a certain cache as a luxury-ideal brand; that's been deeply eroded by a reputation for iffy finish quality and a certain high-profile personality's choices. And if their falling prices are any indication, Tesla knows that its high margin days are numbered if not outright over, and they're headed towards being just another manufacturer.