Is Tesla Massively Overvalued?
By Matthew Yglesias
NYU’s Aswath Damodaran isn’t exactly a household name, but he’s made some of the best stock valuation calls around in recent years—calling the Apple peak and the Facebook low. He’s out with some new math today on Tesla concluding that the company is optimistically worth about 40 percent of its current market price.
It’s worth running through his calculation yourself since it’s a great pedagogical exercise in fundamentals-based stock analysis. My comment is this, though. Damodaran is deliberately sketching out what he deems to be an optimistic scenario in which “Tesla will grow to be as large as Audi, while delivering operating margins closer to Porsche’s.” Which is to say he’s assuming that Tesla will go from its current status as a niche luxury car maker to reach the size and scale of a large luxury car maker.
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