I feel like too many people hold a short sided “stock market only” view of Tesla. Its not, long term, an auto maker. Its solar panels, energy storage, energy management...everything that will be necessary to survive somewhere coal wont be available to burn. There is a long term vision that is funded by capitalizing on short term markets along the way. That vision is much larger than P/E ratios...
Thus I’m not surprised when i hear about Elon being sad or annoyed with “shareholders” and the board, because he holds a vision for our future that Wall Street just cant comprehend, and thats depressing.
His vision is highly dependent on levering up the company even further and selling more equity in the future. What happens when their cash flow dries up during the next recession, which by the way last happened nearly 10 years ago, and they can’t meet their debt obligations?
When there is chatter that PE ratios don’t matter, it’s time to run for the hills as irrationality has set in. Also, Tesla doesn’t have a PE ratio because they don’t generate profit. The stuff that gets companies trough difficult economic times.
Also, on the batteries and solar endeavors - sure it’s a growth opportunity but does Tesla really have that much of a competitive advantage beyond their brand name?
One final thing. Don’t forget that Musk does not have shareholders’ best interests in mind. He bailed out solar city, which was heading for bankruptcy, using Tesla as his piggy bank. And then got shareholders to drink the kool aid that it was a smart move when in reality he could have simply bought it out of bankruptcy - but that would have cost him personally, so he didn’t. https://www.fool.com/investing/2017/11/01/teslas-solarcity-b...
Ford does ~$150B in revenue per year and they are worth $46B. Ford's P/S is 0.31
GM does ~$166B in revenue per year and they are worth $61B. GM's P/S is 0.37.
Tesla does ~$12B in revenue per year and they are worth $56B. Tesla's P/S is 4.67
I'd argue that Wall Street has an extremely optimistic view of Tesla's future since they are worth 12-15x more than Ford and GM on a revenue basis. I can't really compare on a profit basis since Ford and GM are profitable and Tesla has never made a profit and their production/delivery numbers have been basically flat (~25k units) per quarter for a year and a half.
I see Tesla’s vision, and I think it’s where we as a species need to be headed - but their ability to execute is sorely lacking and that goes far beyond P/E ratios.
Thus I’m not surprised when i hear about Elon being sad or annoyed with “shareholders” and the board, because he holds a vision for our future that Wall Street just cant comprehend, and thats depressing.