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A $ 300 intraday turnaround is just another day for Tesla investors.
Tesla’s Wild Ride (TSLA) continued on Monday.
Shares of the electric car maker fell 3% to start the week after the shares began Monday’s trading session, rising 16% to a record high of just $ 1,800 a share.
But even with Monday’s big intraday sell-off, the stock has nearly doubled since June 1 and quadrupled from its March lows. At the close of Monday, the company’s market capitalization north of $ 250 billion makes it more valuable than Disney (DIS), Netflix (NFLX), Verizon (VZ), and Coca-Cola (KO), among other names in first class.
And in many ways, the action we’ve seen in Tesla stocks is a perfect microcosm of the broader rally in the market that has confused many investors in recent months.
Tesla’s shares have soared in the past year, and its latest upside push is reminiscent of the stock’s recovery in the winter. (Source: Yahoo Finance)
Tesla’s shares have increased as the company’s news investors viewed positively, as well as a revival of animal spirits that hit the markets earlier this year. And just as news about the economy and market reaction has been a kind of Rorschach test for investors, so too does Tesla’s narrative of similar disagreements about what constitutes positive news and what explanations for the recovery in the action can really be justified.
The latest stage of the stock recovery began with better-than-expected vehicle delivery numbers released in early July.
In the second quarter, Tesla delivered 90,650 vehicles, beating estimates for 74,130 vehicles, according to Refinitiv data cited by Reuters. Some analysts called this data a “dropper.” Skeptics have cited recent price cuts as a sign that demand is weaker than delivery numbers suggest.
In a note to clients published early last week, Adam Jonas of Morgan Stanley said: “The stock revaluation is occurring with extraordinary speed, even by historical Tesla standards.” At the time Jonas released his note, the stock was trading near $ 1,400 per share; On Monday, the shares traded up to $ 1,774.
Jonas added that the company now appears to be poised to break even under GAAP in the second quarter, a result that “clearly is strong enough to place the company in a materially different risk category in the eyes of the market. , triggering a recovery to qualify and extend the appeal of the shares to completely new investor communities. “
In a customer note released last week, Joe Osha of JMP Securities outlined a valuation framework for Tesla that actually makes the company look less like an auto company and more like the tech giant than many of its true believers have always been. argued that the company would be converted.
“We value [Tesla] like other top killers, “Osha said in a note to customers.
“It is true that TSLA manufactures automobiles, while [Apple] and [Nvidia] they don’t, and it’s reasonable to note that those companies are not perfect comps, “Osha added.
“What is clear is that comparing TSLA with growing auto companies that are losing market share and losing money is not helpful. We believe TSLA is a category killer who is still in the process of building a dominant position in electric vehicles, and that stocks should be valued compared to other similar successful companies. “
“We have noticed that the compensation group for Tesla has also materially changed,” added Jonas.
“Tesla no longer compares to legacy automakers trading at 1/5 or 1/10 of Tesla’s market capitalization. Increasingly, we have conversations with investors who want to talk about Tesla’s valuation against the world’s most successful and valued tech companies. Names with which we are familiar that can achieve sustainable growth above the market, software margins, rigidity of the platform and proven resistance in a post-COVID world of high macroeconomic uncertainty. “
In February, we covered Tesla’s surge to record pre-pandemic levels above $ 900 a share.
At the time, commentators, strategists, and analysts cited factors ranging from the pursuit of performance, to the earliest of all time, until investors finally appreciated the opportunity in front of the company. All of these factors are still at stake. The Robinhood set has also seen a surge in enthusiasm related to Tesla.
And it all contributes to Tesla’s story serving as a true event for everyone in what remains among history’s most baffling market environments.
What to see today
6:00 am ET: NFIB Small Business Optimism, June (expected 97.8, May 94.4)
8:30 am ET: MoM consumer price index, June (0.1% expected, -0.1% in May)
8:30 am ET: Consumer price index excluding food and energy MoM, June (0.1% expected, -0.1% in May)
8:30 am ET: Consumer price index y / y, June (0.6% expected, 0.1% in May)
8:30 am ET: Consumer price index excluding food and energy, year on year, June (1.1% expected, 1.2% in May)
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6:50 am ET: Fastenal Company (FAST) is expected to report adjusted earnings of 36 cents per share on revenue of $ 1.49 billion.
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6:50 am ET: First Republic Bank (FRC) is expected to report adjusted earnings of $ 1.11 per share on revenue of $ 912.7 million.
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6:55 am ET: JPMorgan Chase & Co. (JPM) is expected to report adjusted earnings of $ 1.11 per share on revenue of $ 30.57 billion.
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7:00 am ET: Delta airlines (DAL) expected to report an adjusted loss of $ 4.22 per share on revenue of $ 1.43 billion
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7:55 am ET: Wells Fargo (WFC) is expected to report an adjusted loss of 1 cent per share in revenue of $ 18.5 billion
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8:00 am ET: Citigroup (C) is expected to report adjusted earnings of 38 cents per share on revenue of $ 19.16 billion.
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