Tag: Tesla (TSLA)

Cathie Woods: Bold Prediction for Tesla

Posted on by Matt Thalman

Recently the renowned stock picker and Tesla (TSLA) bull made a new price prediction on the automaker, which sounds just as crazy as the last time she made a wild prediction, but the first prediction has come true, and then some.

Cathie Woods is the Founder and lead stock picker for the Ark Invest family of exchange-traded funds. Woods initially started Ark Invest in 2014 and made heavy bets on technology companies.

She became a household name when her original $2,000 price target on Tesla, when the stock was trading for around $300 per share, came true on a split-adjusted basis.

When Cathie initially made her case for Tesla at $2,000, people thought she had lost her mind. They couldn't understand how she arrived at that valuation and why she was so confident in that prediction.

Which, by the way, she was, considering she invested millions in Tesla before it went on its run higher.

Those investments in several different Ark Invest ETFs helped propel several Ark ETFs into the top ten best-performing ETFs for several years in a row.

Cathie is at it again, possibly giving investors a second chance to catch lightning in a bottle.

Cathie Woods Ark Invest owns a little more than $850 million worth of Tesla stock (stock price is currently around $170 per share). She believes the stock price can go to at least $1,400 per share by 2027.

That price is her bear case scenario, with a bull case scenario of $2,500 and a base case price of $2,000 per share. Those figures would represent an eight, eleven, and fourteen-fold return from today's price.

Furthermore, the base-case price of $2,000 per share would give Tesla a market capitalization of $6.3 trillion. For context, two of the largest companies in the world Apple (AAPL) and Microsoft (MSFT), have market caps of $2.7 trillion and $2.2 billion. At $6.3 trillion, Tesla would be worth more than both of them combined. Continue reading "Cathie Woods: Bold Prediction for Tesla" →

Tesla (TSLA) - How Should You Play It?

Posted on by Matt Thalman

Shares of Tesla (TSLA) are once again giving traders big daily moves. After the stock hit a 52-week low of $101, it bounced back above $210, and now it appears to be heading lower again.

The catalyst for the move lower was primarily the company's most recent earnings report, which, despite sales, revenue, and earnings all coming in strong, margins took a hit.

Tesla has dropped prices on its vehicles five times over the last year, so margins taking a hit should not have been as much of a surprise as it was to the market.

However, Tesla still has a strong market position and is still producing industry-leading margins. The issue is that those margins are shrinking, and at some point, Tesla may see its margins fall more in line with the rest of the auto industry.

We have seen these types are situations play out in other sectors as companies grow and mature. The best example I can think of is Whole Foods.

When Whole Foods was a young, fresh company, it commanded upwards of 5% margins on its products. But, as the company grew and the rest of the grocery industry noticed what Whole Foods could do with selling premium products and commanding higher margins, other grocery store chains began to offer similar products.

This competition for the customer naturally puts pressure on Whole Foods' margins, thus forcing them to lower prices and lose their high margins.

I believe the same story is now playing out with Tesla. At this time, it is clear that the world is moving away from combustion engine vehicles, although slower than some would like. And as consumers move towards more electric vehicles, more companies are offering alternatives to just buying a Tesla. Continue reading "Tesla (TSLA) - How Should You Play It?" →

Gold And Tesla: Bulls Check Barriers

Posted on by Aibek Burabayev

Last month, I presented three potential scenarios for the future price of gold in an earlier Gold Update.

In the poll, most of you chose the green path, which suggested an extended period of consolidation for the yellow metal. However, it appears that the blue (straight bullish) and black (similar to the pattern observed in 2017) paths are more accurate, as the green path is no longer viable.

Gold Futures Daily

Source: TradingView

In just two weeks since the last update, the price of gold futures has increased by $160 or nearly 9%, reaching a high of $2,015 on March 20th. This surge in price caused the previous top at the blue B point of $1,975 to be broken, but the price has since been consolidating around this level.

The price of gold futures has formed a triangle pattern (purple) characterized by falling peaks amid rising valleys. The size of the pattern is relatively small, and last week, the price attempted to break out of the pattern to the upside but was unsuccessful.

As a result, the upside potential of the move may be limited due to the small amplitude of the pattern. Continue reading "Gold And Tesla: Bulls Check Barriers" →

How Low Can Tesla Go?

Posted on by Matt Thalman

2022 Year-to-date shares of Tesla (TSLA) are down 66%. The question everyone is wondering is, "Can Tesla fall more?" The simple answer is yes. Any stock, even one with a cult-like following, can go to zero.

The question we should be asking is, when is Tesla stock fairly valued? Or even better, undervalued? Having an idea of what price Tesla should be valued at will give investors a better idea of when they should buy or sell. And really, the only time you buy or sell should be when a stock is overvalued or undervalued.

The problem is that valuing a stock is not cut and dry. Nearly every investor will inevitably come up with a different value for a stock, even if they are using the same data to do their valuations.

With that in mind, let us look at one way of valuing Tesla and determine if it is over, under, or fairly valued.

Today we will be using a comparison method of valuing Tesla. We will look at what Tesla does, compare its business to other companies operating in the same industry or industries, and determine if Tesla is appropriately valued based on its competitors.

Tesla is more than just a car company. I know you have all heard that before. Tesla considers itself a car company and an energy generation and storage company. So let us first compare Tesla to other solar energy generation and storage companies, and then we will tackle the car company side of the business.

A few years ago, Tesla purchased Solar City. A solar panel company that installs solar panels on residential and commercial buildings and has add-on battery storage components.

We can compare this side of Tesla's business to First Solar (FSLR). First Solar makes, installs, and maintains solar panels just like Solar City does for Tesla. First Solar is valued at just under $16 billion and has a price-to-earnings ratio of 165.

However, Tesla and Solar City also sell backup batteries that can be installed in a home. These batteries would be used during power outages or when solar panels aren't generating power, such as at night.

A comparison company for this would be Generac Holding (GNRC), which also sells power backup products, mainly generators, but they have battery backup systems for solar panels. Generac currently trades for $6.5 billion and trades at a P/E of 15, much more reasonable than First Solar. Continue reading "How Low Can Tesla Go?" →

Electric Vehicle Exposure That's Not Tesla

Posted on by Matt Thalman

Just a few years ago, it seemed that electric vehicles were never going to "catch on," whether that was because of price, possible reliability issues, or, most importantly, range anxiety. (Range anxiety is the fear that the electric vehicle will not have enough battery to reach its destination or the next charging station, ultimately leaving the driver stranded.)

But, better, much better battery technology, vastly more vehicle and brand options for consumers to pick from, and exponentially more charging stations located all over the country, have changed consumers' minds about the electric car.

While a large number of new, start-up car manufacturers are developing only electric vehicles, one significant change we are seeing is that almost every major car manufacturer is already offering fully electric vehicles or plans to do so in the next few years.

This is nice because we can get our iconic-looking vehicles in electric form; think the Ford F150 pickup truck, the Jeep Grand Cherokee, or even the gas-guzzling Hummer!

Most people don't like change. Thus changing the way a vehicle looks and what powers it may have been some of the reasons consumers didn't rush to get an electric car a few years ago but are now more willing to do so.

Regardless of the reason or reasons why more people are purchasing electric vehicles, the fact is, it appears electric vehicles are not only here to stay but may be the only type of cars on the road in just a few decades. This major shift in how we move from one place to another can also be a massive windfall for your portfolio.

Even though some people may feel they missed the EV investment because they didn't buy Tesla 5 years ago, there are still plenty of opportunities out there that you can put money into today and reap the rewards for decades to come.

Let's take a look at a few Exchange Traded Funds that will expose you to not just car manufacturers in the EV space but also crucial materials and technologies that EVs need to operate.

The first two are ETFs that focus on the production of electric vehicles and the future of transportation. The KraneShares Electric Vehicles and Future Mobility Index ETF (KARS) and the Fidelity Electric Vehicles and Future Transportation ETF (FDRV) invest in essentially the same companies. Continue reading "Electric Vehicle Exposure That's Not Tesla" →