Tesla stock in bubble zone amid Apple car rumors, researchers say


On June 29, 2010, Tesla Motors CEO Elon Musk posed in a television interview after his company’s initial public offering in the NASDAQ market in New York.

Brendan McDermid | Reuters

Tesla’s stock in London is very expensive and compared to its performance in the bubble sector, according to Vitaly Kalsnik, partner and head of research at Research Affiliates in Europe.

“As long as Tesla is a great company, there are very strong signs of Tesla stock being overprinted,” Kalsnick told CNBC’s “Squawk Box” on Tuesday, hot on the heels of a report that Apple will once again have its own Is planning to manufacture electric cars. – Health Technology.

Tesla’s share price was up about 6.5% on Monday. In Tuesday’s premarket, it was trading up 0.5% at $ 653.25. Its current market value is $ 616 billion, higher than the combined nine automakers.

Kalsnik believes Tesla’s stock price is too high, given its sales, car production numbers and other fundamentals. “When we are looking at the types of beliefs that we need to justify these evaluations, one would need very aggressive beliefs,” he said.

Tesla’s margins are “substantially equal” with the rest of the industry, and Kalsnick said that “Tesla’s current valuations are in the bubble region.”

Tesla’s share price has risen by more than 650% in 2020 with several major events helping to lift the company’s stock. In May, Tesla began production at its California Gigafactory following an epidemic shutdown and legal battle with the state. In July, Tesla beat its fourth straight quarterly and delivery estimates of profit. The shares also received a boost at the end of the summer, when Tesla announced its first stock split.

Tesla’s shares reached a record high after the electric car manufacturer’s announcement, making its debut on the S&P 500, a stock market index that measures the performance of 500 large companies listed on stock exchanges in the US.

“When it is included in the S&P 500, investors will have to buy it at a much higher price, and this is likely to lead to very bad results for investors,” Kalasnik said.

On its S&P debut day, Tesla shares topped Monday’s record highs in the previous session.

Compete with apple?

Reuters reported that Apple plans to begin production of an electric passenger vehicle by 2024, optimizing optimism for Tesla stock. New technology in the Apple car could reduce battery production costs and expand its range, Reuters reported. Apple declined to comment.

While an Apple car may be several years away, other companies are already producing significant numbers of EVs. But Kalesnik believes that investors do not fully appreciate that there is competition in the EV market.

“Tesla has some advantages in the EV market and many of its competitors accept it,” Kalasnik said. “That being said, the cap capping of its rivals has increased significantly [together] Very aggressive, multibillion dollar plans to enter the market. Volkswagen is already producing. Toyota has serious plans, and it recently came to the fore with its advances in solid-state batteries, which are going to revolutionize the EV industry. “

Despite his concerns, Kalsnik said he would not recommend reducing Tesla’s stock. “The bull market for Tesla can outperform your appetite for capital and shorts,” he said. “But given the instability, you can burn very significantly.”

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