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I prefer to buy long term winners when they have short term problems. Most of what I buy is with the mindset of never selling, or at the very least, holding several years. With a long to very long term horizon, volatility doesn’t bother me too much. I’ve been investing for over 20 years now, through 3 major bubbles . I saved up $500, the minimum deposit required to open an UTMA brokerage account, in middle school. I convinced my grandpa to co-sign the account, despite the fact that he nor anyone else in my family owned stocks or any other investments .
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The primary bearish thesis for Tesla has always been that it is an automaker and should be valued as such. In earlier years, financial solvency was also an issue, but the bears know that today they have a solid balance sheet. Data by YCharts An earnings pe ratio tesla multiple in the mid to high single-digits is the norm for that group, at least ever since the Great Financial Crisis. Sometimes they hit a double-digit PE but it’s something like 10-13x, which is still 1/4th that of Tesla’s multiple right now.
The beta is 2.07, so Tesla’s price volatility has been higher than the market average. The PE Ratio can be viewed as the number of years it takes for the company to earn back the price you pay for the stock. For example, if a company earns $2 a share per year, and the stock is traded at $30, the PE Ratio is 15. Therefore it takes 15 years for the company to earn back the $30 you paid for its stock, assuming the earnings stays constant over the next 15 years.
Should You Really Be Celebrating Tesla`s Record Q1 Deliveries?
The IR is a measure of NATURAL LIQUIDITY. The IR identified the bookends of every long term stock market cycle since 1900. In the last 12 months, Tesla had revenue of $81.46 billion and earned $12.56 billion in profits. PE Ratio can also be affected by non-recurring-items such as the sale of part of businesses. This may increase for the current year or quarter dramatically. Therefore PE Ratio without NRI is a more accurate indication of valuation than PE Ratio.
A Buy, Sell, or Hold rating in this article does not constitute a Buy, Sell, or Hold recommendation. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. I/we have a beneficial long position in the shares of TSLA either through stock ownership, options, or other derivatives.
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The company has a current ratio of 1.53, with a Debt / Equity ratio of 0.07. Similar to the PE Ratio without NRI or PS Ratio or Price-to-Operating-Cash-Flow or Price-to-Free-Cash-Flow , the PE Ratio measures the valuation based on the earning power of the company. This is where it is different from the PB Ratio , which measures the valuation based on the company’s balance sheet.
While running that business, the cash flow coming from it afforded me the opportunity to make high risk, high reward investments in private biotech companies. Life sciences is a great interest/hobby of mine but because it evolves so rapidly and requires immense amounts of continuous due diligence, it is something I now only do on the peripheral of my portfolio. While the vast majority of what I buy may be considered boring, I do make investments in some highly speculative stocks. For those funds I prefer munis and in fact, have been betting on long duration for nearly a decade now. Contrary to the prevailing mindset this last decade, there’s far too much debt to sustain higher rates for any meaningful amount of time.
P/E ratio as of April 2023 (TTM): 51.6
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- Like it or not, Musk’s larger than life personality is why Tesla hasn’t had to advertise.
- Market Cap is calculated by multiplying the number of shares outstanding by the stock’s price.
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