Man…
Elon Musk must feel like the king of the world right now. The company he created after getting a HEFTY sum for selling his start up stake in PayPal, Tesla (TSLA), is one of the HOTTEST stocks on Wall Street.
In fact, this stock has been hot for a while – and even though it went through a rough patch like everybody else during the pandemic – it hasbounced back with a vengeance…
But is it worth the buy?
This stock is sitting at about $1500 a share right now – which is 315% HIGHER than it was when it hit its 2020 low in March…
With no signs of slowing!
So…
Should we buy or not?
That’s the million-dollar question with any stock isn’t it? And even though TSLA shares are up there in price – we have to really take a good hard look at the numbers before making a decision like that.
And that’s the weird part about Musk’s company…
Their numbers aren’t the best.
Seriously, the fact that the company continues to gain value month after month is truly mind-boggling…
As there really isn’t any meat to back up the sizzle.
And Tesla is 100% sizzle…
In fact, the company itself doesn’t even seem to be all that great when you break it down to brass tacks.
The Gorilla isn’t the only one baffled about TSLA’s meteoric rise over the past few months…
There are numerous analysts on Wall Street pacing their offices – crunching the numbers and trying to figure out why Musk’s baby is soaring – with very little technical evidence for the price spike.
One of the best on brightest seemed to encapsulate how Wall Street is reacting to Tesla’s big move when he told journalists, “We’re struggling to play catch-up here with the valuation.”
Because the run has been nothing short of historic…
After hitting it’s most recent low of $361.22 on March 18 – the stock has shot up like a SpaceX rocket – climbing over 315% up to it’s current price of around $1500.
What’s even more impressive, is that at one point, shares of TSLA were sitting at a whopping $1,764.06 before settling back down into steadier prices.
So, it begs the question:
Can Tesla sustain this kind of growth?
And the answer isn’t that easy to answer.
Tesla is very popular among the younger generation of traders – especially those cowboy daytraders, who are always looking for some quick profits – which honestly makes this stock more volatile than not.
So, let’s look at it logically…
Tesla is a car company – so, if we’re going to compare it to anything – we should compare it next to the valuation of other car companies.
The problem is – when you do that – you see just how much MORE (or even OVER) valued Tesla is compared to its competitors.
When you take the valuations of each of the other big American car companies (Ford [F], GM [GM] and Chrysler [FCAU]) and combine them…
Tesla is STILL 239% higher in its valuation.
That’s huge!
But everything being equal – TSLA doesn’t trade on fundamentals.
Sure, Elon Musk makes some incredible cars, but the fact remains – that even if every person in the US bought a Tesla car – this valuation would still be a bit too high.
It doesn’t trade on those key statistics that every potential investor should look at…
But buyers don’t seem to care about valuations, registrations, or production ability – they only seem to care about one thing: Elon Musk running the show.
That’s it…
It’s like Tesla is less of a car company than it is company that supports Elon Musk.
Not that he’s not worth the faith investors are putting into him…
But the fact remains – there doesn’t seem to be anything that support its valuation when it comes to fundamentals.
And that should be enough to keep traditional and more conservative investors from hitting that buy button.
This is exactly what GorillaTrades was created for – to ensure that the stocks we consider investing in – have solid value behind them.
We don’t get behind some quirky inventor…
We look for solid companies with strong technicals and hard numerical data to back them up before we consider recommending them to our subscribers.
We’d love for you back here for the next one – so please consider returning today.
However, we get it if it’s not your style – but do yourself a favor – look for companies with numbers to back up their value…
You’ll be happy that you did!
“When something is important enough, you do it even if the odds are not in your favor.” – Elon Musk