9 min read
This article has been translated from our English edition.
The opinions of the employees of You are personal.
After adding to SP 500 last December Tesla, Inc. (TSLA) hasn’t slowed down its role yet. The stock has achieved a return of 19.7% so far this year, beating the nominal earnings of the SP 500 and the industrial average of the Dow Jones During this time. The company has had excellent financial results for the past five quarters and is expected to continue that performance this year.
While the company’s solid fundamentals, technical capabilities and broad market reach Elon Musk After contributing to a 727.2% rally last year, the global auto revolution should allow it to maintain momentum.
With industrial and commercial production peaking again this year, governments in major countries plan to fuel their recovery with clean energy. In addition, US President Biden’s $ 2 trillion Green New Deal proposal should benefit the automaker over the next two years. This, along with several other factors, helped TSLA earn a “Strong Buy” rating on our proprietary rating system.
This is how the proprietary POWR rating system rates TSLA:
Commercial class: A.
TSLA is currently trading above its 50-day and 200-day moving averages of $ 629.62 and $ 375.87, respectively, indicating an uptrend in the Golden Cross. The stock is up 96% over the past three months, driven by strong short-term optimism.
TSLA reported impressive results for the third quarter ended September 30, 2020, exceeding analysts’ expectations. Revenue increased 39.2% year over year to $ 8.77 billion, while gross profit increased 73.1% year over year to $ 2.06 billion. Net income and EPS increased 131.5% and 68.8%, respectively.
TSLA plans to launch three new electric vehicles soon, including the Tesla Cybertruck and two electric cars. The plan is to invest up to $ 12 billion in electric vehicles and battery factories with manufacturing facilities on three continents over the next two years. The company raised $ 4.97 billion from a stock offering in September to soon fund its capital-intensive projects. TSLA is currently working on developing a fully autonomous driving function that will be integrated into TSLA vehicles in some countries by 2021. At the end of December, the company signed a pricing agreement with Panasonic for ion-ion battery cells. Lithium. Under the agreement, Panasonic’s battery products, which have applications in the X and Y models, will be sold at a contract price through March 2021.
In addition, it has entered the Indian subcontinent. With a huge population and market base, expansion in India is expected to boost the company’s profits. The company also plans to open a new battery system project in Australia called the Big Tesla Battery. With that in mind, the company has partnered with French renewable energy company Neoen to develop 300/450 MWh in South Australia.
Having successfully dominated the electric vehicle industry, it is now venturing into other sectors. The company’s takeover of Solar City in 2016 gave him a seamless entry into the solar module industry. CEO Elon Musk expects this sector to be the next “killer product” by 2021.
Following press releases on COVID-19 vaccines from Pfizer and BioNTech, Musk confirmed that his company became a manufacturing partner of German biotech company CureVac and is currently developing version three RNA microfactories and vaccine printers.
Purchase and retention level: A.
In terms of closeness to a 52 week high, which is a key factor in our purchase and retention levels, TSLA is well positioned. It is currently trading just 3.8% below its 52-week high of $ 884.49, which hit January 8th.
The company grew 1,106.4% over the past three years. This is due to the impressive sales and profit growth. The company’s revenue has increased 37.9% over the past three years, while EBITDA has increased 165.7% over that period. Musk’s tangible book value has increased at an average annual rate of 53.4% over the past three years.
Elon Musk CEO of Tesla. Image: AP Photo / Jae C. Hong via BI
TSLA’s dominance in the electric vehicle market has resulted in impressive growth. In addition, the company has had some degree of monopoly power in the fledgling industry in the past as the largest American auto companies have been slow to compete in the electric vehicle race. The company’s strategic manufacturing facilities in areas of high demand have enabled it to keep production costs relatively low.
Peer Grade: A.
TSLA is currently number 1 of 51 stocks in the auto and vehicle manufacturing industry. Other popular stocks in this area include Toyota Motor Corporation (TM), Honda Motor Company, Ltd. (HMC) and Ferrari N.V. (RUN).
TM and RACE gained 5.8% and 21% respectively over the past year, while HMC declined slightly. That compares to TSLA’s return of 727.2% over the period.
Industry rank: A.
The auto and vehicle manufacturing industry ranks fourth out of 123 industries in the StockNews.com universe. The industry is driving a wave of clean energy as the demand for electric vehicles grows exponentially around the world. Given the higher efficiency of electric vehicles and lower maintenance costs, consumers will increasingly prefer electric cars to traditional combustion cars in the long run.
With technology advancing in the EV industry in general, it is expected that the transition from gasoline vehicles to battery vehicles will cost less compared to other industries that are fully committed to carbon neutrality. As a result, most economies are focused on using the automotive industry to drive industrial transformation across the country. In this context, major European economies have announced bans on sales of new internal combustion vehicles through 2035, and the United States is expected to follow suit soon as Biden advocates clean energy.
Overall POWR Rating: A (strong buy)
The auto company is rated “Strong Buy” for its strong short- and long-term uptrend, impressive finances, and underlying industry strength as determined by the four components of the overall POWR rating.
While a recent TSLA vehicle recall shattered investor confidence, the company has taken active steps to improve its software services and prevent such incidents from occurring in the future. The company’s strategic entry into developing markets and its growing popularity are likely to see stocks skyrocket soon.
TSLA has an average broker rating of 1.91, which indicates positive sentiment from analysts. Out of 32 Wall Street analysts who rated the stock, 8 rated it “Strong Buy.” The consensus-based EPS estimate of $ 0.95 for the fourth quarter ended December 31, 2020 represents an improvement of 131.7% year over year. The company also has an impressive track record of surprise earnings – it exceeded Street’s EPS estimates for each of the four following quarters. The consensus revenue estimate of $ 10.27 billion for the reporting quarter represents an increase of 39% over the same period last year.