The Market Is Underestimating Tesla Inc’s (TSLA) Competition; Standpoint Resarch Gets Bearish

The analyst can't help asking: Where's Tesla's profit to be justifying such a massively escalated valuation?


Tesla Inc (NASDAQ:TSLA) has a target on its back and Standpoint Research analyst Ronnie Moas does not believe the electric car giant’s valuation is warranted for a guzzler that would need to be bringing in $50 to $100 billion- and is projected to bring $12 billion for this year.

In fact, just how much of a profit is Tesla making right now? None, and Moas says for that matter, not to expect one before two years in the making.

For a company that is more likely to sink under $300 “before you see $500,” the analyst takes a bearish turn against the giant, downgrading from a Hold to a Sell rating on TSLA stock without listing a price target. (To watch Moas’ track record, click here)

Consider car makers gunning for CEO Elon Musk’s brainchild of the likes of Toyota, Ford, General Motors, Ferrari, and more. “The list of companies that are shooting at Tesla right now is not a short one […]” says Moas, who puts it bluntly: “Anyone who thinks the German car manufacturers are going to sit on the sidelines and watch Tesla eat their lunch is mistaken.”

Once again, it is that pesky problem of valuation, as the analyst points out Tesla trades higher than other auto manufacturers in a sales context and is “trading at least 3 to 5 years ahead of itself.” Amazon or Apple, Tesla’s empire is not, writes Moas: “The market is treating Tesla as if it is Amazon or Apple when in fact they have a lot more competition than Apple and Amazon have.”

Ultimately, “It is hard to bet against Elon Musk — someone who has sent rockets into space. I can appreciate that […] That being said, the market has priced in whatever good news you can come up with here including a 1,000,000 figure for annual vehicle sales looking out to 2022. Depending on which multiple you want to attach to 2022 earnings, Tesla needs to generate between $10 and $20 in EPS in order to justify the current share price. As I mentioned earlier — they are not even profitable right now,” Moas contends, no longer having the patience to wait to see Tesla turn a profit.

Wall Street is torn about whether to throw in the towel on this tech empire quite yet, as TipRanks analytics showcase TSLA as a Hold. Out of 21 analysts polled TipRanks, in the last 3 months, 6 are bullish on Tesla stock, 7 remain sidelined, and 8 are bearish on the stock. With a loss potential of nearly 12%, the stock’s consensus target price stands at $310.93.TSLA analyst consensus

  • Kayhacker

    If you are in the market for a car what do you ask yourself…what is the best auto I can afford?

    -If the answer to that is, a car that doesn’t need gas or oil changes and is faster than a Camaro then there aren’t that many cars that can do that so the competition is limited (Tesla Products).

    -Right now it looks like the Auto industry is striving to deliver a new product and you have to look at who is ahead of the game (Tesla).

    -In the long run it’s like the tortoise and the hair. The auto companies could have done this a long time ago much quicker than Tesla but now they are so far behind (because lets face it it’s not the car it’s the battery) that they are playing catch up. Can they catch up or buy the technology to compete with Tesla? Let’s see.

    • Rey Cabal

      tesla dominates in premium EVs with mod S & X and now with the mass market entry level premium Mod 3 to take on the germans bread and butter entry level audi a4 , BMW 3 series, merc c class,, from basic models to moneymaker S4, M3 to c class AMG .It’s going to be a bloodbath for the germans.