Amid forecasts of doom by short-shellers, Tesla stock (NASDAQ:TSLA) has remained strong despite the overall market sell-off. Despite these forecasts, the stock is up 16% year to date and continues to trade at very high values. During early trading hours on Friday, Tesla stock (NASDAQ:TSLA) was down 4%.
Next Quarter’s Sales Should Be Back on Track.
Tesla stock (NASDAQ:TSLA)could experience strong improvements in the most recent quarter, with August sales predicted to be more than 100 percent higher year on year, and with China sales expected to be around 77,000 cars in August, things seem to be back on track after a little hiccup in the previous quarter. Meanwhile, Tesla is estimated to have increased its market share in the United States to 4%, with sales doubling year on year. Tesla has enjoyed considerable adoption in numerous nations, including Australia, however, results in Europe have been mixed. If the following quarter’s earnings are positive, Tesla stock (NASDAQ:TSLA) might climb again, going against the typical trend of tech equities.
Tesla Stock Market Analysis
Values in the tech industry have largely retreated, with many businesses down more than 50%, but Tesla stock (NASDAQ:TSLA) remains one of the few companies with triple-digit valuations; with the current price-to-earnings ratio still over 100, many remain dubious. However, given Tesla’s continued rapid growth and the lack of signs of a slowdown in momentum, values may not be all that high. Especially given that margins have stayed stable till now, the next several quarters will set the tone for where prices will go.
Multiple firms have been vying for Tesla’s business, and many more electric cars are expected to join the market this year. Short-sellers have noted that competition is gradually eroding Tesla’s dominance, with other competitors showing to have superior mileage and others with identical qualities but cheaper pricing. Regardless, Tesla’s brand value and brand loyalty seem to have traits that have held the competition at bay for the time being. While competition has improved in countries like Europe, Tesla remains at the top in North America, China, and Australia/New Zealand.
If Tesla maintains its current great performance, the future price-to-earnings ratio will decrease below 52, which many may believe to be reasonable. Margin aside, debt is manageable at $6.66 billion, and with cash on hand of $18 billion, the corporation is well prepared to weather the rising rate environment. Tesla’s leveraged free cash flow is presently $6 billion.
Tesla stock (NASDAQ:TSLA) is not presently experiencing a significant correction, and despite the larger market’s decline, Tesla remains robust. Rates will continue to climb for a few more quarters, pushing discount rates higher, but given the pace at which profits are growing, it may not matter. Tesla stock (NASDAQ:TSLA) may be in bubble territory, or it may be the start of a multi-year bull run for a firm that has already witnessed considerable price increases.
Featured Image- Megapixl @ Nejaunet