We Need To Talk...Tesla Stock & Valuation
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Well Holy Smokas this really ain’t not jokas! Tesla My Esla has gone up again today!! With tesla stock price being where it’s at, people are asking when I’m going to sell my tesla stocks. And today I want to talk to you about exactly that! Tesla stock price and valuation and when I would sell my Tesla stock. I will talk to you about why or why not I will sell my tesla stock.
Hope you enjoy this video where I go in-depth about Tesla stock and its valuation. Leave me a comment with your opinion on Tesla stock price and valuation. Do you think it’s overvalued? Or do you think Tesla stock is still going to go up? Also leave me a comment if there is a stock to buy now or a stock to watch now.
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Let’s take a peek at the market today. How’s it doing? dow was up 212 points NASDAQ up 2.3% good days and NASDAQ sp 501.3%. So there’s that MicroStrategy my new gig coin play oh man is doing well. Shopify doing well Walgreens already starting to kick into high gear.
Oh my gosh Did you guys see the deal that happened with Walgreens yesterday game changing switch JP Morgan the planet Dropbox beyond me Qualcomm skywalks tattooed shift their Tesla my Tesla hit $800 a share two day up a huge gain here at a far far exceeding anything the market is up in far exceeding what most stocks are up. And I’m looking at this stock.
And as I do with this stock every single day in my life, I think, should I sell off my 750 shares in the public count? I’m looking at this stock. It’s a 1,657% I am in completely uncharted waters with this stock. I’ve never been up this big on a stock ever.
Okay, I am in completely unchartered waters. I’ve never been here, okay. Ever. I mean, never this type of game. This is just insane.
And I think to myself, maybe today is that day, because I haven’t even held the stock for this long. I mean, it’s you know, it’d be one thing if I held the stock for 1015 years, and it’s gone up 1,657% it’s a whole other when the fact is, I added all these shares in this account in 2019.
We just started 2021 so it’s not even like I’ve held the stock for very long and we’re up you know, we’ve 10 extra money or 20 extra money on most of the shares we bought in this account k it’s absolutely insane. And so I’m looking at this and I’m like maybe I should just cash Okay, mixing you know, late last night I’m looking at Ilan Musk, he has a huge package. Okay, you want to talk? Wait, that’s not a pet.
Okay, he’s got a huge pay package potentially commie okay, because basically, he has all these tranches, which he can unlock and get a bunch more stock options.
In Tesla, essentially, I’m looking at this compensation package, and it’s massive that Elon Musk is going to get Okay. And then I’m looking at the valuation of Tesla $761 billion is trading at right now.
Okay, that is one of the largest companies in the entire world when it comes to market cap. Okay, and keep in mind, Tesla’s still really, really small compared to you know, if you compare him to companies like Apple, Amazon, Google, Facebook, other companies that have huge valuations on him like Tesla’s a little guy, you know, just flat out.
I’m looking at that you know, there’s always been a lot of hatred toward Tesla stock from either short sellers or people that have just jealous of the stock honestly, and there’s a lot of hate around Tesla there’s a lot of people very jealous around the stock Okay, you see things like this all the time.
Okay, one thing you have to remember the bigger the top the bigger the drop so many people you know, saying that when this stock comes crumbling down, it’s gonna crash so bad you have no clue. Okay, look at this.
When this explodes the sound could be heard past our solar system. Okay. These are the type of things you read all the time. I’m 57 years old, with more than 30 years experience in stocks.
Never seen such a valuation for a company whose market share with only point 8% of worldwide sales. something is very wrong somewhere This person says new price target is $10,000 per share. Why not? Bitcoin is $38,000 for absolutely nothing but electronic vapor.
Okay, these are the type of comments like people trolling people hating jealousy huge and I mean, this is huge with Tesla stock stop thinking P and start thinking how many people want the stock and wants to hold it? It’s like everything else supply and demand p for stocks is like McDonald’s and Coca Cola.
I don’t even like comments like that. Okay, look at this comment. We now have a meme driven stock market P and earnings are for grandpa now it is all about who’s CEO is a coolest day.
Tesla is now worth more than all car companies on the planet combined. I’ve watched this Tesla go up on upgrades for the last year.
They produce less than 1% of the cars built but the company is worth as much as all car companies in the world combined. Can stocks just go up on upgrades? I have no stake in the stock wish I did. But where does it realistically go from here? It is essentially valued such that over the next few years it needs to generate as much revenue and net profit as the next four to five largest car makers combined. That is not happening.
Yes, it is a growth story this year, but the long term growth has been rather uneven and there’s a lot of new competition coming into view. Plus autos are a low margin business.
This is not a pure tech company as so many apparently believe something like 90% of their revenue comes from low margin manufacturing not too sexy. What would the dudes on Shark Tank think if musk pitch them a business at the Five times revenue and 1300 times earnings, insane stuff, not sour grapes, but I like to spend my time typing on Yahoo Finance message boards to hate on this stock along with everybody else in the world.
Okay, and this is the type of stuff you see day in day out around Tesla stock. Okay, now keep in mind, I did a video This was back in I think it was like early 2019 on why I thought Tesla stocks going to $3,000 a share, okay, which now it has eclipsed that on a split adjusted basis.
Now Tesla’s $4,000 a share Okay, and I got so much hatred when I put out that video okay, so much hatred. It was ridiculous. And so this has been going on a while, like people have been negative on Tesla, for many various reasons are jealous of the company or jealous of the stock, or whatever it is, okay? It’s been like that forever.
And so every day, I think about selling the stock and I mean, every day, I mean, literally last night, it’s been 45 minutes literally just thinking about the stock running numbers on the stock everything across the board, and I still can’t do it. I still can’t sell out of the shares in this video here. today. I want to go over three things. Okay.
I want to show you the numbers, the numbers of projected numbers I have for this company with revenue, net income, the P e ratios, things like that and why I can’t sell the stocks still like even when I look at it and I’m like oh my gosh, we’re up so much we can take all this profit still can’t sell
Okay, we’re gonna go over that that’s gonna be the main part of the video number two we’re going to talk about the cash reasons why I can’t sell Tesla stock in number three we’re going to talk about the smaller piece which is the Cathy reasons why I can’t sell it I don’t know why I always spoke Cathy with a why it’s IE okay,
but there are Cathy reasons why I can’t sell the stock as well so hope you guys enjoy today’s video. As always, if you don’t mind smash that thumbs up for me doing this video just kind of showing you guys my numbers and kind of go into depth on my thought process around this I would love to be able to hopefully purchase a new Farmers Market read a Lulu from tattoo scheffers isn’t rata rata to Lee or round alluded like how do you pronounce that word? Rata to T Li rata totally. Okay, now, man, I want one of those. Okay, here’s one joint stock cup.
It’s absolutely free to do so as a best and biggest free discord chat in the entire world war investors in the stock market. So if you want to join there might even have it as a pinned comment as well. But it’ll certainly be in the description area.
No, it stopped the prep of this video and I had to go basically interview somebody have like a phone interview with somebody. And while I came back, I was gone for like 4050 minutes, the stock went up a bunch more.
So now the stocks well over $100 a share. Now it’s you know, up $53 a share on the day up over 7% just crazy. Okay, let’s get into these numbers.
Okay, so how I want to go ahead and do this is I want to work back and I want to see if we can justify this valuation by working backwards on this. And I’ll show you guys exactly what I mean. Okay, so right now, market capitalization is $766 billion.
Now, with a stock like Tesla, you’re not thinking about, like, no one’s investing in Tesla based upon what they’re doing this year or next year. Okay. People are thinking in terms of five years out net income. That’s how everybody thinks when it comes to these sorts of stocks.
Tesla, Amazon, you know, those beast growth companies are thinking five years out there. They’re very special stocks and very special opportunities. And that’s the way people really think about them not based upon this year, next year. All right, so first thing we’re gonna have to figure out if we’re going to work backwards on this is what current p would be fair for Tesla in five years from now. Okay.
And so we want to look at like, what are the current Pease for the market, the currently the market is trading at 38. That’s extremely rich, but a lot of that is because just like you’re looking at a trailing 12 months, a lot of companies earnings have been devastated because Ronnie, Rona, those will come back a lot stronger in 21, and especially in 2022. Okay, now usually the market trades at a 14 to 15 current PE.
But keep in mind, there’s been many times in the past over history, where savings accounts, you got really good money on that. And so it made more sense to put your money in a savings account versus stock market right now in the super low interest environment with interest rates extremely low, either basically nowhere to put your money other than maybe like stocks and real estate. And if you want to do something like crypto to something like that, right.
I think a 22 is perfectly fair for this sort of market nowadays we’re in Okay, you would maybe even go a little above that. But I think a 22 ish is very fair. All right. Now, a 22 for Tesla in 2025.
Does I don’t know why I kept writing 2026 is 2025 K, a 22. p that doesn’t really make sense. Because here’s the thing with Tesla, they should still be growing extremely strong. Come like 2025. If this company has already, you know, basically grown and they are not growing anymore.
That means Tesla just fell off in a huge way that would be extremely disappointing to I think every single person that’s a shareholder, his company, if their growth days are all gone by 2025. That just doesn’t make sense. His company should be still a very strong, double digit growth beast on the top line in 2025.
So 2022 it just doesn’t make sense. That’s fine if you’re like Coca Cola stock or Pepsi or something like that, but not for Tesla. So no way. Does that make sense? The most realistic combo of the time for Tesla is Amazon. Okay? Because Amazon is one of those stocks.
It’s never everybody’s always looked at this document like it trades overvalued. It’s overvalued, it’s overvalued, that’s what they always say about Amazon consistently. Okay. But Amazon trades five years in the future, it always has. And always well, I don’t know if it always will. But it certainly still does nowadays. And Amazon trades at a 93 p k.
Amazon’s been around for 100 years, like, you know, Amazon’s a $1.6 trillion market cap and then trades at a 93 p e ratio for that company. So I can definitely understand Tesla trading at a 93 pe, let’s say in 2025. But I would want to be even a little more conservative. So we’re not going to say that Tesla’s trading at a 93. Let’s say Tesla’s trading at an 80 pe, in 2025.
Okay, so what would that mean for numbers wise? Well, 766 billion is the market cap. So we need to do some math on this game. So 766 divided by 89.5. So basically, Tesla would be needing to do around 9.5 $9.6 billion, we’re just going to call it even $10 billion of net income in 2025. To make this a realistic scenario, okay.
And so, you know, then we have to figure out, can this company get to a place where they’re doing $10 billion on the bottom line net income in 2025? All right. So first off, we have to figure out the short term numbers, you know, let’s have this company in 21, doing top line revenue numbers of $45.4 billion. Okay. You have other people like Galileo, he put out numbers recently, he has a company doing $57 billion of revenue.
Okay, so there’s a huge, there’s like a $12 billion difference between what Galli thinks and what analysts think, Okay, I’m gonna go somewhere in between, I’m going to be a little more conservative, and obviously not more conservative than analysts, but certainly a lot more conservative than galley. Okay. I’m going to say in 2021, this company does $50 billion of revenue.
All right, I think there’s definitely very realistic model y continues to ramp around the world possibility, some cybertruck a Model S at some point, you know, the plaid edition, which is a you know, not not going to be a super high selling car in terms of volumes, but it will sell well, I got 100 pre order.
And when those sell, they’re like $150,000 140 $150,000. So 50 billion, I can definitely see that and 21. Okay, then you had the fact that so many people are going to likely upgrade their autopilot systems because the autopilot system is like, so legit. Now it’s insane.
It’s just getting to a place where it’s getting better and better. And that’s like $1,000 upgrade now. So 50 billion, I definitely think is possible for this company in 2021. I think that’s what they’ll do for a number. Okay, 2022, I think they’ll do $75 billion dollars in revenue.
Keep in mind my numbers, a lot of Tesla bulls will look at this as actually very bearish numbers, a lot of them don’t think, you know, or basically think that’s company’s gonna do way better than this came by then do a 75 billion in 20 to 23, I had them doing $100 billion in revenue, 2024 of them doing $140 billion of revenue,And by 2024, the masses are going to be buying TVs like crazy.
Whether it’s Tesla for like other TVs, right now, we’re in a time period where everybody’s looking at even thinking about getting abs, and things like that, like the amount of questions I get about my test all the time and amount of people that are like, yeah, I’m thinking about getting an Eevee. And those sorts of things.
It’s huge. And by 2024, the masses are going to be all about Eevee, we’re going to be at a huge inflection point where it’s very possible, there could be more Eevee sold in 2024, than actual ice vehicles. So that is definitely a possibility. And if it’s not there, it’s going to get really dang close by 2024. Okay, so Tesla’s gonna be putting up some insane numbers. 2025 is a year ahead them doing $200 billion on the top line.
Keep in mind, the autonomous taxi network should be fully up and running. By that time, Tesla should have some really large revenue numbers pouring in for the company at this time. So $200 billion, is what I foresee this company doing in 2025.
Okay, so they’re doing $200 billion on the top line revenues in 2025. I think it’s cake. And I mean, absolute cake for this company do $10 billion of net income in 2025. That’s only 5% only 5% of top line, the bottom line, that’s Kate, even with the autonomous taxi network and let’s assume autonomous taxi network is losing them money as a build that out.
Let’s say they’re they’re doing rides for basically a loss every time a ride happens, like they lose money or something like that, or make a very, very slight profit. Let’s just assume that’s a drag on the business. Even with that being dragged in the business. There’s there’s no way I don’t see this company doing at least $10 billion in 2025. If the company is doing $200 billion in revenue, and keep in mind, that number, some people will say that is conservative.
Now, I think it’s more realistic that this company could be doing $20 billion in net income in 2025. If they’re doing 200 billion on the top line. $20 billion is definitely within reach for that bottom line. And even then that’s not accurate. Easy number that’s only 10%.
From top to bottom line, keep in mind, like like, you know, Tesla, as far as the cars they sell, they’re just going to get more profitable over time, they’re going to find cost savings here and there, they’re going to continue to obviously have people upgrade for things that have already been built out, that is all straight profit, like think about it, like, every time they sell a package, you know, that’s like the, you know, the basically the self driving package, right? That’s all basically profit.
So stuff that’s already been developed by the engineers at Tesla, in systems that have been worked out. It’s like straight profit stream to them, you know, so 10%, I don’t think it’s a stretch at all, for this company to have 10% of top line reached bottom line. I really don’t. I think that’s very, very possible. And keep this in mind. Okay.
A lot of testimonials will say my numbers are too conservative, okay, to date. And conservative says something to take into account.
It’s not like I have the most bullish numbers, believe me, there are people that have far more bullish numbers than me. And I mean, far, far, far more. Okay. And so just on the numbers alone, this stock ties me down, it ties me down just at the numbers, nevermind, where were the other things we’re about to go through? Just based upon those numbers we’re running through?
It’s like, Why do I have to sell out of this stock, you know, everybody’s so caught up in all they had this much market share, and they sold this many cars. No one’s in this stock for what they’re doing today. There’s no one, okay, everybody’s in this for what the company is going to likely be doing in five years.
And if you don’t have a long term mindset, you can’t judge businesses on a long term perspective, you belong nowhere near commenting on this stock. Just bottom line. The only people that should really be commenting are people that have long term visions, and can like look at numbers on an objective basis over the long term. And kind of know consumer demands and those sorts of things.
You could look at Apple in 2008, and said, This company is trading at a ridiculous valuation because Apple only has point 5% of world market share when it comes to cell phones. Did people not understand like, we’re all going to smartphones, and Apple is going to be one of the biggest players in smartphones. And that’s what people are missing, with like Tesla, like everybody’s going to be moving in electric vehicles in the next five to 10 years.
And Tesla’s got a great chance to be the number one player one of the number one players in the entire world in this space. And you’re talking about this is just such a massive market. It’s ridiculous. numbers alone timing down. Let’s get into cash.
Okay, the cash reasons why I can’t sell test stock right now. Okay. Here’s what’s going through my mind 12 $100 stimulus checks. Oh, here comes $600 coming in the spring. Oh, now they’re talking about $2,000 stimulus checks. Very possible coming at some point in 2021.
Where’s all this money coming from? Where’s all coming from? You think it’s coming from taxes coming from taxes? There’s money being out of thin air? here’s, here’s some money, here’s some money. Okay, look at the Fed’s balance sheet, it’s gone insane.
I mean, not just insane over the past, you know, let’s say 1011 years, you know, which, obviously, it’s gone wild since the Great Recession, when it was around a trillion dollars or less than trillion dollars. And here we are, well over $7 trillion now, but just look at the last one year, last one year. I mean, we went from just over $4 trillion on the Fed’s balance sheet to now we’re well over $7 trillion, and that numbers probably go into eight or nine, by the end of 2021. k could even go above that.
But that’s almost, you know, baked in, okay. And so when you see those type of numbers, and you’re thinking about all this, you’re thinking about cash, and I already has seven figures of cash, and it’s being devalued, consistently and constantly with all this money printing and all this just let’s just flood money out there. Okay. I already have cash has been devalued, basically, because there’s not money velocity right now. They’re trying to flood the system with more cash. It is what it is.
And so if I look at Tesla, and I say, Okay, I got 600 something $1,000 in this stock right now that if I sell out of that, I also have $608,000 cash in my account that I can transfer to my savings account or another bank account or just keep in my portfolio. Do I need another $600,000 just sitting around in cash when I already have seven figures worth of cash already?
Do I really need that there’s a guy named Michael sealer, okay, he’s a CEO this like spec stock I invested in they own like over 70,000 bitcoins, okay, ticker symbol m s tr. All right.
There’s already doing amazing for me, like I just bought it like a week or two ago, and it’s already doing amazing. This guy always talks about melting ice cube, which is cash into this. I mean, honestly, at the end of the day, it is really a melting ice cube. And you know, when you this flood of money just goes out there. It’s a melting ice cube faster and faster and faster. And he’s got a great point.
And so I look at this and I’m like, why do I need another 600 plus $1,000 just to sit in cash. You know, as far as other stocks, I’m buying, like, I’ll buy those stocks as I buy them. I don’t need another six or seven figures on the sidelines. I don’t need another 600 plus 1000 to just sit around and melt. So that’s the cash reason
Also, I’m looking at this and I’m just like, that doesn’t make any sense. I’d much rather hold you know, $600,000 in Tesla stock at the moment, then another extra $600,000 in cash.
Hey, now let’s talk about a small reason. It’s called the Kathy reason. Okay, so first off Kathy is like super hot, right? Like super. And, you know, you don’t know, you know what I mean? Okay, I’m not talking like that kind of super hot.
I’m talking about like, she’s the hottest ETF person out there right now, right? Everybody wants to put money with Cathy wood right now. It’s just facts. Okay?
And so money’s getting keep in flowing to Cathy wood and Ark invest, like, you know, this isn’t going to stop today, it might stop in a couple of years or something like that, or my stop, you know, when when if they have couple bad, you know, months or years around some stocks, but for right now the money is inflowing to Ark invest left and right. Okay.
And here’s the thing when it comes to Ark invest in Cathy wood. And by the way, I did a full video on them on financial education to that it did okay, right now on a split adjusted basis. tussle stock is $4,000. Okay, because they obviously did the five to one split stocks $800. It’s a $4,000 stock right now. And when it comes to Ark invest, they have a $7,000 expected value on the stock.
Okay, so which means they expect the stock to go up what another 70 80% from here from where it’s at here today, over the next few years? You know, that’s a really darn good return on investment. Like that’s nothing, you know, obviously, it’s not what Tesla has been, but that’s still a great return on investment is still far better.
If you expect that like like Kathy would, and Ark invest does, you expect that it’s still a far better return than you’re gonna get on most stocks out there, like probably 99% stocks, right. But not just that their bull case, which keep in mind, most investors they invest based upon their bull case, not based upon their expected value a bear case, okay. Their bull case is $15,000.
For stock look at this case, we believe there’s a 25% probability that Tesla could be worth $15,000 per share, or more in 2024. Okay. So when you look at that, do you think like Kathy, wouldn’t Ark invest is going to invest more money in this company, I’d say probably, they’re probably going to put more, they’re got crazy inflows of money coming into them, they’re probably going to put more money in tests, if they really truly expect that.
Think about it this way, imagine you had like four squares on the floor, okay, and you flip a quarter straight over those squares, and the quarter bounces around, and it’s gonna land on one of those squares on your floor, okay?
And imagine one of those squares has 15 $100 in it. So meaning your $4,000 ends up going to actually 15 $100 and you lose, let’s say, 20 $500.
Another square has $7,000 on it, another square has $7,000 on it as well, because that’s what you expect. And then another square has 15,000 plus dollars, would you flip that coin? You know, it really depends on you know, what level of risk you’re willing to take.
But I gotta say, I would flip that coin. And I would flip that coin, like I was flipping my flapjacks every day, I’d be flipping that coin. If you gave me those squares, in you, you put me at risk, you said, Okay, if you’re $4,000, you’re going to go to 1500 7000 7000 or 15,000.
Plus, I’ll flip that coin every single time. That’s all I’ll do each and every day, I won’t even make YouTube videos anymore. Okay? You know why? Because a whole lot more times that 4000 is going to go to 7000 or 15,000, then it is going to go to 1500. And that’s the way somebody like an ark invest will look at this.
So like are we expect the stock to go to at least 7000? If not 15,000? Plus, if things play out the way we think they’re gonna play out. So Hmm, it probably makes sense that we got all this money inflow into ETFs that we go ahead, and we buy more Tesla stock.
And so this is a small reason why I still can’t sell a stock, but it is it is another just kind of small reason out there. Okay. And so the question I get from people all the time, and I remember, you know, when I did a podcast with Graham a few months ago, I think we did that and I don’t know September October, even put me on the spot.
He’s like, you know, what price would you sell tests? I mean, in this is a tough, this is a tough, very tough question. The truth is, there’s no I have no clue. I have no clue to be honest. On what price I’ll sell Tesla. I don’t have some some magical price in my head that I’m like, if it hits this price, I’m gonna sell out of it.
Like, I still will think of selling the stock every single day. But I just don’t know. Okay, just as simple as that.
There’s probably going to be a day when I sell Tesla stock, but I don’t know. All I know is it’s not today, okay. And so these are the reasons why I still can’t sell Tesla stock Hope you guys enjoyed this as always go test on my so if you don’t mind, smash that thumbs up button helps the YouTube channel out in a massive way. Please don’t leave without smashing that thumbs up. We really need it guys. I very much appreciate it.
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