Stockchase Opinions

Dan Nathan Tesla Inc TSLA-Q COMMENT Dec 28, 2022

Apple vs. Tesla in 2023 Tesla has under 10% EV market share in China where many companies are building EVs, so China isn't that much of a growth engine though many feel that is. Musk is telling employees to ignore Tesla's stock action, but TSLA is the biggest stock crash in recent months. Stocks like this simply don't come back. There's a good chance Musk won't be CEO 12 months from now and TSLA will be viewed as a car company (slowing growth) but lacking the craziness of its current CEO. That said, . It will probably rally soon and sharply, making this a great short to stock. He prefers Apple, but at $110 in coming months.
$112.710

Stock price when the opinion was issued

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PARTIAL BUY

Funny that people who bought a year ago have to attach explanatory bumper stickers. If it's going to be a good buy at $200-225, it's a good buy at $265; you're buying it for the longer term. He can't come to terms with the valuation.

If you decide you want to buy, put in 10% today, and you'll feel better. If you've wanted it for a long time, and you don't pull the trigger today, you'll forever hesitate. It's just psychology. 

His father has a wonderful expression, "It's the second mouse that gets the cheese." Not sure tariffs are enough to provide continuing support for an EV car maker when the Chinese are doing it so much cheaper.

DON'T BUY

Over time, every major car company will have a slew of electric vehicles and TSLA won't be the only game in town. Brand's been damaged a bit from Musk's activities. Still not cheap. Better places to go with less risk.

DON'T BUY

Shares are cut in half from highs. Bulls say that Trump's close relationship with Musk should give Tesla a big advantage in self-driving cars and robots. But Tesla's core car business has collapsed and tariffs will be awful. Is the most expensive Mag 7 stock, trading at 87x PE. He can't trust their estimates--their car business is in such bad shape.

DON'T BUY

Musk is a remarkable entrepreneur, but there's a lot of promotion involved. Right, particularly in the US, the people driving Teslas aren't happy, given DOGE and the White House. We see the backlash with protests. If Tesla survives 10 years, there will probably be a lot of revenue from self-driving cards, but Tesla has to get there. The brand has fallen out of favour. If things go badly in the White House, it would reflect more badly on the company, because Musk is so tied to the White House.

DON'T BUY

As a car company, never made sense to pay the demanding multiple. So an investor has to put faith in the technology side, and he's not comfortable with that. Musk is in the news big time, and he's not gaining any friends. International blowback against TSLA and Musk, reputational risk. Sales numbers weak.

WAIT
Is all the bad news priced in by now?

The stock is down 40%, but at 50% that's when it hits bottom and that's when you enter. So wait.

DON'T BUY

On the chart it's a buy. But price to growth is unhinged. Don't buy this one.

DON'T BUY

He drives a Tesla. Musk stepping away from Washington is likely a good thing, but the stock trades at a ridiculous 150x PE. Bulls will argue that robo-taxis are coming, but we're not there yet for self-driving cars (he tried it himself).

PARTIAL SELL

He reduced his position given macro risk, though the company has done a fine job navigating tariffs. He believes in their self-driving technology, which will be one of the biggest transition in coming years. As for the Musk boycott and falling Tesla sales around the world: Musk has always been controversial, and he says he's returning to Tesla full time. 

COMMENT

Down, and Musk has been slamming his own brand. In fact, he should probably leave the company; Board has been debating this.