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Toyota has 9% yoy growth, $220b of debt and a $260b market cap, tesla has >50% yoy growth, $5b of debt and a $820b market cap. Why are you focused on p/e rati

Toyota has 9% yoy growth, $220b of debt and a $260b market cap, tesla has >50% yoy growth, $5b of debt and a $820b market cap. Why are you focused on p/e ratio? It tells basically none of the story

rootusrootus 3y ago
Let's see Tesla's growth rate when they're closer to Toyota's size. And speaking of meaningless numbers, who cares about market cap? How does revenue compare? Toyota is about 3x, I think?
- dsugarman 3y ago
  My whole point was to care about enterprise value and growth rate over market cap and p/e
- wrsh07 3y ago
  They're literally responding to someone commenting about stock price Tesla sales growth currently seems limited by their ability to produce, so that's fairly bullish Market cap isn't meaningless, though. Neither is debt. Market cap should be a function of assets, so presumably if Toyota had as little debt as Tesla it would be ~480b market cap. Why is Tesla higher? It has a better story (not saying I buy it, but at least I can explain it!): Better self driving prospects (data + compute), licensing charger design, huge growth numbers
  - FireBeyond 3y ago
    At one point, Tesla was worth more than: Toyota, Volkwagen Group, Hyundai/Kia, General Motors, Ford, Nissan, Honda, Fiat Chrysler, Renault, Suzuki, Daimler, BMW, Mazda and Mitsubishi combined. (Plus several Chinese manufacturers: SAID, Geely, Changan, Dongfeng). I'd love anyone to justify that with a straight face.
    - YetAnotherNick 3y ago
      Tesla is the only company significantly ahead of its competition in technical specification.
    - wrsh07 3y ago
      The justification is simple but you won't like it: retail investors enjoy owning Tesla more than they enjoy owning any of those other stocks There are lots of reasons for that enjoyment, but I'm not sure they matter
  - martin8412 3y ago
    Well no.. They don't have better self driving prospects. Tesla claimed in 2016 that the driver was only in the seat for regulatory reasons. We're now in 2023 and Tesla is still only level 2, nowhere near autonomous driving.
- DriverDaily 3y ago
  Let’s not forget Tesla dropped prices like mad to make these sales. The Model Y Performance was $69,990 last year and now costs $54,490.
  - DoesntMatter22 3y ago
    True. Tesla may only be making 7x per Toyota per car instead of 15x
- kelnos 3y ago
  > Let's see Tesla's growth rate when they're closer to Toyota's size. Not sure what point your trying to make, though. Smaller, faster-growing companies usually do trade at a premium over their larger, slower-growing counterparts. That's just... kinda how the stock market works? You can certainly object to the magnitude of the difference between the two companies' PE ratios, but otherwise nothing seems weird here.
phkahler 3y ago
P/E tells most of what you need to value a company that is stable in size. Tesla could grow earnings 10x and it would still have a higher P/E with the same valuation. It's way out of line unless you believe they are going to own half the world market for cars one day. I suppose if SpaceX can obtain 90 percent of the launch market, why not Tesla?
- Gustomaximus 3y ago
  Also I feel there are 2 other significant variables in play. Software is often an oligopoly type market. Self driving is likely to rewrite car manufacturers to those that solve this well and those that don't. Tesla for right or wrong has been viewed as one of the best bets here. Elon factor. He's been a significant factor in quite a number of significant companies created. That seems an attractive bet he will do good things vs anyone else.
  - ChuckNorris89 3y ago
    >Elon factor. He's been a significant factor in quite a number of significant companies created. That seems an attractive bet he will do good things vs anyone else. I'm pretty skeptical on all things Elon these days.
    - Reimersholme 3y ago
      [dead]
  - _hypx 3y ago
    There is no "elon factor." This is pure hype.
  - simiones 3y ago
    I think most have realized by now that self-driving is not a serious possibility anytime soon for anything other than a nice option to upsell the car by some small margin. And Tesla FSD is not even best-in-class between car manufacturers (Mercedes is, with actual approved and shipped commercial L3), not to mention the entire self-driving market (where Waymo is way ahead).
svnt 3y ago
The market cap tells you what you need to know. Is there a way in which Tesla can grow the total vehicle market, expand alone into adjacent protected, high value markets, or reasonably exceed Toyota’s market share? If not, they’re over valued. They are still valued on $300k per car future numbers from when they were supposed to be renting cars with AI drivers in 2020, and the exuberance and “playing with house money” crowd has just kept the music going.
- yazaddaruvala 3y ago
  If Tesla were a car company. However, Tesla is also a fuel-station company. You could just as easily value it against BP or Shell to get better market cap representation.
  - tw04 3y ago
    Not unless they start building power plants. Right now they’re just a gas station owner selling someone else’s oil. I’m aware of the solar roof thing and it’s more of a press release than a product.
    - svnt 3y ago
      It’s the attempt to fulfill the story they’ve been selling since the beginning, which is exactly the EV-company-but-with-sticky-SaaS-revenue you’d expect from SV. A problem when you try to span those markets is you lose access to support from other major companies because you open up too many competitive fronts. A further problem is when you try to reproduce a model (oil companies) that is dependent on finding and securing resources when almost everyone has a sufficient and unending oil-well-equivalent permanently incident on their roof.
    - yazaddaruvala 3y ago
      Power plant: https://electrek.co/2022/08/18/teslas-virtual-power-plant-first-event-helping-grid-future/ https://electrek.co/2022/08/18/teslas-virtual-power-plant-fi... Here is a grid storage project: https://electrek.co/2022/03/22/tesla-megapack-selected-big-new-300-mwh-energy-storage-project-renewable-energy-australia/ https://electrek.co/2022/03/22/tesla-megapack-selected-big-n...
giantrobot 3y ago
Wow market cap! What a great measurement...of what a bunch of gamblers on a secondary market say a company is worth is all its shares could magically be sold without affecting the sale price.
EdwardDiego 3y ago
Because PE is a key indicator for evaluating how much a company is worth, but then this dates from the days when investors were looking for sustainable growth and dividends not stock buybacks.
- pornel 3y ago
  Toyota hasn't released a good BEV yet (bz4x's battery and drivetrain are a decade behind the state of the art), and poured a ton of money into hydrogen which isn't happening for passenger cars. I suspect the stock is priced with the possibility that Toyota is reacting to EVs the way Nokia and Blackberry to the iPhone.
  - _hypx 3y ago
    Tesla fanboys need to stop being so short-sighted. All innovation in cars will not stop at the BEV. There will be a next technology leap beyond the BEV. And if you think honestly about what that is, it will be hydrogen cars. Simply because they are EVs without the limitations of the li-ion battery. As a result, people need to think carefully about what comes next. If anything, BEVs represent a transitional technology. You can think of them as being what Reddit is right now. Sure, it disrupted what came before (i.e. Digg), but it is not the end-result of that particular business sector. And if that is the case, then it is likely that Tesla, not Toyota, that faces the biggest challenge in the future.
    - Gwypaas 3y ago
      Sorry to break it to you, hydrogen or e-fuels definitely have a place in the future for fertilizer, seasonal storage and maritime shipping. For personal vehicles BEVs won nearly 10 years ago. See the "Hydrogen ladder" for further, more eloquent, information. https://www.linkedin.com/pulse/clean-hydrogen-ladder-v40-michael-liebreich/ https://www.linkedin.com/pulse/clean-hydrogen-ladder-v40-mic...
      - deleted 3y ago
        [deleted]

Toyota has 9% yoy growth, $220b of debt and a $260b market cap, tesla has >50% yoy growth, $5b of debt and a $820b market cap. Why are you focused on p/e ratio? It tells basically none of the story

rootusrootus 3y ago

Let's see Tesla's growth rate when they're closer to Toyota's size. And speaking of meaningless numbers, who cares about market cap? How does revenue compare? Toyota is about 3x, I think?

dsugarman 3y ago
My whole point was to care about enterprise value and growth rate over market cap and p/e
wrsh07 3y ago
They're literally responding to someone commenting about stock price Tesla sales growth currently seems limited by their ability to produce, so that's fairly bullish Market cap isn't meaningless, though. Neither is debt. Market cap should be a function of assets, so presumably if Toyota had as little debt as Tesla it would be ~480b market cap. Why is Tesla higher? It has a better story (not saying I buy it, but at least I can explain it!): Better self driving prospects (data + compute), licensing charger design, huge growth numbers
- FireBeyond 3y ago
  At one point, Tesla was worth more than: Toyota, Volkwagen Group, Hyundai/Kia, General Motors, Ford, Nissan, Honda, Fiat Chrysler, Renault, Suzuki, Daimler, BMW, Mazda and Mitsubishi combined. (Plus several Chinese manufacturers: SAID, Geely, Changan, Dongfeng). I'd love anyone to justify that with a straight face.
  - YetAnotherNick 3y ago
    Tesla is the only company significantly ahead of its competition in technical specification.
  - wrsh07 3y ago
    The justification is simple but you won't like it: retail investors enjoy owning Tesla more than they enjoy owning any of those other stocks There are lots of reasons for that enjoyment, but I'm not sure they matter
- martin8412 3y ago
  Well no.. They don't have better self driving prospects. Tesla claimed in 2016 that the driver was only in the seat for regulatory reasons. We're now in 2023 and Tesla is still only level 2, nowhere near autonomous driving.
DriverDaily 3y ago
Let’s not forget Tesla dropped prices like mad to make these sales. The Model Y Performance was $69,990 last year and now costs $54,490.
- DoesntMatter22 3y ago
  True. Tesla may only be making 7x per Toyota per car instead of 15x
kelnos 3y ago
> Let's see Tesla's growth rate when they're closer to Toyota's size. Not sure what point your trying to make, though. Smaller, faster-growing companies usually do trade at a premium over their larger, slower-growing counterparts. That's just... kinda how the stock market works? You can certainly object to the magnitude of the difference between the two companies' PE ratios, but otherwise nothing seems weird here.

phkahler 3y ago

P/E tells most of what you need to value a company that is stable in size. Tesla could grow earnings 10x and it would still have a higher P/E with the same valuation. It's way out of line unless you believe they are going to own half the world market for cars one day. I suppose if SpaceX can obtain 90 percent of the launch market, why not Tesla?

Gustomaximus 3y ago
Also I feel there are 2 other significant variables in play. Software is often an oligopoly type market. Self driving is likely to rewrite car manufacturers to those that solve this well and those that don't. Tesla for right or wrong has been viewed as one of the best bets here. Elon factor. He's been a significant factor in quite a number of significant companies created. That seems an attractive bet he will do good things vs anyone else.
- ChuckNorris89 3y ago
  >Elon factor. He's been a significant factor in quite a number of significant companies created. That seems an attractive bet he will do good things vs anyone else. I'm pretty skeptical on all things Elon these days.
  - Reimersholme 3y ago
    [dead]
- _hypx 3y ago
  There is no "elon factor." This is pure hype.
- simiones 3y ago
  I think most have realized by now that self-driving is not a serious possibility anytime soon for anything other than a nice option to upsell the car by some small margin. And Tesla FSD is not even best-in-class between car manufacturers (Mercedes is, with actual approved and shipped commercial L3), not to mention the entire self-driving market (where Waymo is way ahead).

svnt 3y ago

The market cap tells you what you need to know. Is there a way in which Tesla can grow the total vehicle market, expand alone into adjacent protected, high value markets, or reasonably exceed Toyota’s market share? If not, they’re over valued. They are still valued on $300k per car future numbers from when they were supposed to be renting cars with AI drivers in 2020, and the exuberance and “playing with house money” crowd has just kept the music going.

yazaddaruvala 3y ago
If Tesla were a car company. However, Tesla is also a fuel-station company. You could just as easily value it against BP or Shell to get better market cap representation.
- tw04 3y ago
  Not unless they start building power plants. Right now they’re just a gas station owner selling someone else’s oil. I’m aware of the solar roof thing and it’s more of a press release than a product.
  - svnt 3y ago
    It’s the attempt to fulfill the story they’ve been selling since the beginning, which is exactly the EV-company-but-with-sticky-SaaS-revenue you’d expect from SV. A problem when you try to span those markets is you lose access to support from other major companies because you open up too many competitive fronts. A further problem is when you try to reproduce a model (oil companies) that is dependent on finding and securing resources when almost everyone has a sufficient and unending oil-well-equivalent permanently incident on their roof.
  - yazaddaruvala 3y ago
    Power plant: https://electrek.co/2022/08/18/teslas-virtual-power-plant-first-event-helping-grid-future/ https://electrek.co/2022/08/18/teslas-virtual-power-plant-fi... Here is a grid storage project: https://electrek.co/2022/03/22/tesla-megapack-selected-big-new-300-mwh-energy-storage-project-renewable-energy-australia/ https://electrek.co/2022/03/22/tesla-megapack-selected-big-n...

giantrobot 3y ago

Wow market cap! What a great measurement...of what a bunch of gamblers on a secondary market say a company is worth is all its shares could magically be sold without affecting the sale price.

EdwardDiego 3y ago

Because PE is a key indicator for evaluating how much a company is worth, but then this dates from the days when investors were looking for sustainable growth and dividends not stock buybacks.

pornel 3y ago
Toyota hasn't released a good BEV yet (bz4x's battery and drivetrain are a decade behind the state of the art), and poured a ton of money into hydrogen which isn't happening for passenger cars. I suspect the stock is priced with the possibility that Toyota is reacting to EVs the way Nokia and Blackberry to the iPhone.
- _hypx 3y ago
  Tesla fanboys need to stop being so short-sighted. All innovation in cars will not stop at the BEV. There will be a next technology leap beyond the BEV. And if you think honestly about what that is, it will be hydrogen cars. Simply because they are EVs without the limitations of the li-ion battery. As a result, people need to think carefully about what comes next. If anything, BEVs represent a transitional technology. You can think of them as being what Reddit is right now. Sure, it disrupted what came before (i.e. Digg), but it is not the end-result of that particular business sector. And if that is the case, then it is likely that Tesla, not Toyota, that faces the biggest challenge in the future.
  - Gwypaas 3y ago
    Sorry to break it to you, hydrogen or e-fuels definitely have a place in the future for fertilizer, seasonal storage and maritime shipping. For personal vehicles BEVs won nearly 10 years ago. See the "Hydrogen ladder" for further, more eloquent, information. https://www.linkedin.com/pulse/clean-hydrogen-ladder-v40-michael-liebreich/ https://www.linkedin.com/pulse/clean-hydrogen-ladder-v40-mic...
    - deleted 3y ago
      [deleted]