What happened
One day after receiving a boost from a positive analyst note from Jefferies & Co., shares of Tesla (NASDAQ: TSLA) raise again, 4% up at 3:30 pm EDT Thursday trade.
Since no new news about Tesla per se on the threads, today, I think you should credit today’s share price explosion to new Tesla rival Xpeng (NYSE: XPEV).
Image Source: Getty Images.
So what
Xpeng, as my foolish colleague John Rosevear explained today, is the latest IPO in the space for electric cars, and has just raised $ 1.5 billion selling 100 million U.S. Depositary Shares (ADSs) at $ 15 the piece on the NYSE – a result that Barron calls “really, really” good.
Well what
And here’s the thing: Xpeng won this rating, even though he had no wins. (Quite the opposite, John says that Xpeng lost about a quarter of a billion dollars last year and today loses about $ 200 million every six months). Yet, despite this lack of profits, S&P Global Market Intelligence puts the value of Chinese electric cars at a cool $ 10.2 billion – or about 34 times back-12-month sales of $ 303.5 million.
Well, if Xpeng is worth 34 times sales out of profits, but Tesla shares sell for less than 15 times sales May profits, this may mean that, despite a market value now reaching $ 420 billion, Tesla action is still underestimated?
That seems to be the thinking on Wall Street today, which would explain why Tesla’s stock is still going up.
