Earnings Exceeded Expectations For Tesla Market Value Doubled To TOYOTA

Tesla's recent performance in the capital market is staggering.

As of the end of February 4th Eastern time, Tesla shares rose 13.73%, to $887.06. This is the 6 consecutive trading day of its rapid growth, the overall increase of nearly 60%.

In fact, in the past month, Tesla's share price has continued to rise. Compared with the closing price of $418 per share at the end of last year, Tesla's stock price has exceeded $887, that is to say, it has doubled in a month.

While the share price soared, Tesla's market value also rose. Under the current stock price level, Tesla's market capitalization is more than 150 billion US dollars, the total scale has been equivalent to the total value of the total value of the three major traditional car manufacturers of the United States, Ford and Fiat Chrysler, or even close to the TOYOTA with the highest market value.

In late January, when the twenty-first Century economic report reporters counted the market value of the global automotive manufacturing group, Tesla ranked second behind the German Volkswagen in terms of market capitalization of more than 100 billion dollars, second only to TOYOTA. At that time, TOYOTA's market capitalization was about $233 billion 500 million, and Tesla's market capitalization was about $102 billion 700 million. Many people in the industry thought that the market value of Tesla in the short term is unlikely to surpass TOYOTA.

However, with the recent rise in Tesla's share price, its gap with TOYOTA is gradually shrinking. At present, TOYOTA has a total market capitalization of about $229 billion 700 million, while Tesla is about $159 billion 800 million (about 111 million 420 thousand yuan), and the gap has narrowed to 70 billion dollars.

Stock price soaring under short time game

The concentrated release of sentiment in the market has largely promoted the continuous rise of Tesla's share price. Local time in January 29th, Tesla released the expected fourth quarter and annual earnings report, to see that many of them have found a strong fulcrum firmly held.

The typical representative is billionaire investor Ron Baron, who once again spoke in February 4th to strengthen Tesla, predicting that his annual revenue in ten years would be 1 trillion dollars. According to the latest earnings report, Tesla earned $24 billion 600 million in 2019.

Ron Baron is one of the largest shareholders of Tesla. Information shows that its Baron Capital owns 1 million 630 thousand shares of Tesla and buys at a low price of $219 per share. It can be imagined that Tesla's continued rise in the second half of 2019 will be very exciting for him.

In fact, the market has been filled with sentiment about Tesla, and some stock price forecasts are even alarming. Take the financial technology enterprise Ark Investment Management as an example. Recently, its stock price forecast for Tesla will rise to US $6000 in the next five years, which means Tesla's market value will exceed US $1 trillion.

Seeing the surge of sentiment, Tesla attracted more investors to enter the market and further boosted its share price.

On the two trading days that just passed on Monday and Tuesday, Tesla's stock volume was 47 million shares and 60 million 940 thousand shares, respectively, creating the most active trading record. Craig Irwin, a senior research analyst at Roth Capital, points out that large financial institutions and hedge funds are also taking the opportunity to enter the game, because they are afraid that they will miss the game if they miss the car.

On the other hand, Tesla shorts also contributed part of the wave.

Some analysts said that there might be a phenomenon of empty space in Tesla, that is, the rise in stock prices forced the bears to buy shares to stop the losses. Data from S3 Partners, a data company that tracks short selling, shows that in the past 30 days, Tesla's short stock has fallen by 5%.

Despite much less, Tesla is still one of the most short listed stocks on the stock market. Prior to the twenty-first Century economic news reporter has been concerned that the rise in Tesla's stock price in the past six months has made many hedge funds of short selling Tesla miserable. S3 Partners data show that since 2020, the loss of Tesla short has reached $12 billion.

Tesla has become "Wall Street casino"?

Tesla's share price surge is due to its release of its fourth quarter and year-round results, not only to achieve two consecutive quarters of profit, but also to improve the free cash flow, plus the Shanghai factory's commissioning and delivery, and Model Y's early listing. Tesla expects sales this year to "easily break through 500 thousand vehicles".

The good quality of the operation has brought the price of Tesla up again, which in turn has led the market to improve the future of electric vehicles. Zhang Junyi, deputy general manager and chief strategy officer of China Ping an intelligent enterprise, said that the rise of Tesla's share price on the one hand is that the company basically fulfilled its previous commitments. On the other hand, the market has already recognized the direction of investment in new energy vehicles at a broader level.

Electrodynamics and automation are recognized as the development trend of the automotive industry, and Tesla has been working in this field for twenty years. Whether it is technology reserve or market development, it has already been in front of all the traditional car companies. This is the core logic that Tesla touted.

Currently, Tesla has released Model S, Model X, Model 3 and other three models, of which the top two attacks the high-end market, Model 3 and the upcoming Model Y main attack group's larger ordinary consumer market. After the listing of Model 3, Tesla has entered a critical stage of expansion. Data show that Tesla has become the world's largest vehicle sales volume.

From a deeper perspective, the bulls are optimistic about Tesla, but they no longer regard Tesla as a traditional automobile manufacturer, but rather a high-tech Apple company. In its latest market value report, Ark said that the $7000 per share price estimate came from the latest expectations of the decline in electric vehicle costs and demand, as well as the estimation of the potential profitability of Robotaxi (unmanned taxis).

In fact, Tesla CEO Elon Musk said last year that Tesla will become a company with a market capitalization of more than 500 billion dollars, and that its market value will be mainly driven by autopilot. At that time Tesla's market capitalization was only about 40000000000 dollars.

Zhang Junyi also said that Tesla subverted the concept of traditional cars, defined cars with software, and tried to turn the car into an energy management node at the home side. In the long run, the imagination space is much more than traffic travel. Therefore, Tesla's valuation system has also broken away from the framework of traditional automobile manufacturing industry, and it is not surprising that market value exceeds many car companies.

However, the current stock price and valuation of Tesla are still controversial. Tesla still has a huge amount of empty space, and Citron Research said on Tuesday that Tesla has become the new "Wall Street casino".

For the short term, Tesla is just a car manufacturer, not a so-called technology company. It also challenges financial performance. For example, the number of deliveries does not always meet expectations, and the profit margins will drop further with the start-up and delivery of new factories.

In addition, many investors who are optimistic about Tesla development also say they do not understand this surge.

He Xiaopeng, founder of Xiaopeng automobile, said on the social network that although he has always insisted that there will be 100 billion companies with a market value of more than 100 billion ~10000 billion in the field of intelligent cars in the past ten years, the difference between cars and mobile phones is huge. It is difficult to form a huge winner take all and ultra-high gross profit. Therefore, he has not seen the logic of Tesla's current high valuation.

Some investors also told reporters that Tesla had obvious hype funds, and the share price rose rapidly. But once it fell, it would be equally fast.

Electrified senior engineer Zhu Yulong pointed out that when the stock price rose in Tesla, investors recognized the value of some of Tesla's points, but there was pendulum effect. According to the current information, Tesla's stock price will have some callbacks after the first quarter of this year, and there will be a certain combination of Model Y in the second quarter.