Elon Musk’s Tesla has corrected 25% over recent weeks catching my attention in the process although we are very wary of the stocks volatility and escalating competition on a number of fronts. The companies undoubtedly performing strongly but questions remain around the stocks valuation:
- Nobody is close to TSLA at this stage when it comes to chips and batteries and its leadership looks almost guaranteed over the next few years.
- EV growth is set to increase Teslas margins over the coming years with almost 3m cars forecast to be sold by 2025, things look excellent for TSLA i.e. That’s more cars than BMW.
While TSLA is the undisputed technology leader in EV’s in our opinion the share price is already factoring in some significant growth in its software businesses to justify its current valuation and with that comes major risks – MM believes TSLA is almost priced for perfection with a $US960m valuation keeping us on the sidelines even while its undoubtedly in good shape – technically MM likes TSLA under $US1000 but it’s not for us at this stage.
MM is neutral Tesla (TSLA US)
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