Is it too late to buy TSLA?

Tesla stock has been rising and breaking out recently. Let’s review the fundamentals.

How’s it going everybody this is bt bush today i’m going to talk about tesla and is it too late to buy it now here’s a disclaimer i do not recommend to buy nor sell tesla i do own it myself though i’m merely presenting the information here so that you can decide on your own this video is brought to you by weeble they have a new incentive if you buy one dollar of

Cryptocurrency you’re gonna get five dollars of shiba inu this is on top of the two shares of stock that you’ll get valued between 11 and 2 300 just for signing up and investing any amount check out my referral link down in the video description below tesla’s breaking out reaching a multi-month high around 833 right now quarterly numbers are going to come out

On wednesday of next week october 20th i don’t actually go and listen to every single earnings call nor do i follow these numbers because most of time people are really really hyper focused on the delivery numbers if it’s higher than their estimates or lower than the estimate sometimes they’re right sometimes they’re not but in the long term you really just got

To think of where the company is going so this is a more certain thing for me where i just think about are they going to sell more cars next year this is all i think about and if the answer is yes you have to buy it if the valuation is low so i’m going to cover what i think the valuation is today and i think some of you might be very interested in how much tesla i

Hold do i hold any and do i plan to sell any and i’ll leave that towards the end of the video all of this is not to say that these quarterly numbers are not important if you are investing buying and selling from month to month or week to week these numbers are very important you have to wonder if you’re going to buy or sell right before the earnings release date so

The way i invest is really for slightly longer term maybe six months to one year hopefully one year because i’m trying to get the lower capital gains tax here but i am pretty certain that tesla is going to make more and more cars they’re opening factories left and right there’s huge demand for this car i own a tesla model 3 and i think it’s awesome it’s the best

Car i’ve ever driven this is better than the toyota mr2 that i’ve had this is better than the porsche boxer that i’ve driven it’s a more expensive car but man for long distance drives it really reduces your fatigue i’m a believer of the products and because of this i think there’s a bright future for tesla long term but short term i think the valuation might be a

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Little bit lofty in order to get a picture of the valuation of tesla you have to look at earnings per share so here we go last four quarters this is important because it’s going to factor in into the p e ratio they earn 27 cents per share so you can just use this number and divide it by the share um and then 24 cents uh three quarters ago two quarters ago 39 cents

And then last quarter they earned one dollar and two cents so this total is the last 12 months of earnings it’s a dollar ninety two so the current stock price is 833 it might move by the time i release this video but with 812 divided by 1.92 you’re going to get a p e ratio of 426 this is a huge number because it means that tesla needs to operate at the current

Level for 426 years before it can pay off its own share price this is a huge amount usually for let’s say google tech stock right it’s a more mature tech company and it’s p e ratio right now it’s around 30. if you look at p e ratios of let’s say netflix when it used to be really really high before they made more and more earnings around mid 2018 the pe used to be

Over 150 so considering tesla it’s over 400 it means it’s either too highly valued the price is too lofty considering where it’s earning is gonna go or that maybe investor thinks that the earnings it’s going to catch up with the stock price in this case in order to make the p e ratio 38 the earnings actually needs to increase by 15 fold so is this possible it’s a

Huge goal to ask and the stock price really needs kind of perfect execution or if tesla just appears to be growing exponentially forever more then yes you know maybe you can keep on having a 400 p e ratio but usually for tech companies or really huge companies that are just sort of starting off right p e ratio is really high but then it it starts to come down after

The company starts to mature a little bit more when i talk about maturing it means the earnings that they earn per share starts to see sort of like an asymptote it’s kind of growing exponentially right now and you know i wouldn’t be surprised if they double their profits uh during the next quarter but when you start to see let’s say a couple years down five years


Down 10 years down or something right when you start to see their profits kind of taper off in an asymptote right that’s when the pe ratio is going to catch up with the stock price now i do want to say something about ai day because it came out august 19th 2021 i’ve marked it here on the stock price chart over here and you can see after they released that the stock

Kept on going up is it because of ai day i do not think it’s because of that because tesla bot if they are successful in developing a consumer product that someone can buy i don’t think it’s gonna be in the hands of the consumer for another five years so it’s not going to make a perceivable impact on the stock price at all because you know this is just you know

Some some plans going forward with that said i do want to watch the clip with you guys of the actor inside a robot suit that looks like tesla bot okay here we go because i thought it’s just really ridiculous it’s like some guy doing like a robot dance move maybe like 20 seconds too long here they i don’t know if they need ah that’s that’s like the most cringe

Thing i’ve ever seen and yet the stock price keeps going up i guess investors just kind of looked at it and just kind of chuckled right um i chuckled too but oh my gosh anyway tesla bot carry capacity 45 pounds it weighs 125 pounds you know they put all these specs in it this is like a vision i guess of elon musk now first of all tesla is a car company it’s not

Being valued as a car company because the p e ratio is usually down in the low digits single digits tesla is being viewed as a technology company which it is it has all this full self-driving software right they sell it for 10 000 a pop which is about to come out but i want to go back to looking at things if we’re in a bubble because what do you use to see if the

Entire industry is in a bubble you use the schiller p e ratio which is the price of the s p 500 divided by average earnings average over the past 10 years so how do you calculate this thing you look at all the companies how much they earn these 500 companies how much they earn over the past 10 years if you have a google if you have a tesla you add up all their

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Earnings and then you divide it by 10 this is your average earning per year and then you divide the s p 500 price by the average earnings per year and then you’re gonna get the shiller p e ratio over the past 140 150 years or so you can see black tuesday a dramatic drop from chiller p e ratio of 30 and the dot com which is most recognizable from a drop of around

45. right now we’re at a current schiller p e ratio of 38 which is quite high and if you look at back in the dot-com days when we were at 38 you look at how much longer will the market keep on going up from when it hit a schiller pe of 38 it looks like you know eyeballing it maybe a year or two so if you think that we are in a bubble and then let’s say you go and

Try to time the market sell everything you’re gonna keep on watching the market go up and up and up and then maybe it might crash who knows if it’s going to crash who knows if it’s going to go beyond the dot-com shiller p e ratio of 45 but by these metrics it does seem lofty sometimes you have to look at things macroscopically in the context of the entire stock

Market is it gonna burst right is is this market gonna crash because if it is it’s gonna bring down all stocks including tesla no matter how well it’s doing no matter if it’s selling more cars or whatnot people are going to freak out and they’re going to sell orders all their stock and all of a sudden your nice 833 dollar per share tesla is going to drop quite

Significantly now i don’t want to scare everybody or anything i just want to present you the data and you decide for yourself and as promised i’m going to show you guys my tesla holdings i still have 200 shares my initial buy-in um the second buy-in the first time i bought it i earned a realized gain of sixty thousand dollars the second time i bought it i went

Back in i went in at around six hundred dollars a share and now it’s 833 so i made a you know something like about 48 000 or so so 60 plus 48 000 a total of 108 000 dollars worth of games thanks for watching this video don’t forget to give me a like and subscribe for more you

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Is it too late to buy TSLA? By BeatTheBush

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