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Well guys let me just start out today’s video by saying it’s a heck of a day out there today okay public account were up five figures plus on the public account today okay and a lot of that is because of tussle stock i mean a lot of our stocks are having an amazing day but tesla stock is i think the king stock of the day tesla stock is up nearly $23 per share today
Up over 6% yes you heard me right up nearly $23 per share and you say tesla’s having an amazing day by the way welcome into the new set of 2020 i hope you guys enjoy this new set i was planning on saving it till january but man just a little impatience sometimes and i had to show it off at the end here of 2019 okay but a lot of this positivity around tesla stock
Here today is the fact that another wall street bear is conceding that tesla’s way ahead of others in one key area of electric vehicles credit suisse thinks that tesla’s focus on electric vehicle batteries both in development and production is a key advantage for elon musk company over other automakers he says quote while we hold an underperform rating on tesla
So kind of like a backhanded slap let’s call it that okay we nevertheless believe it’s important to give tesla its credit where do well thank goodness somebody’s actually thinking like that because too many times people get negative around something and it doesn’t matter what that company does it doesn’t matter what that person does they just always look at the
Negative it’s like even if you’re bearish on tesla even if you don’t believe in the stock even if you think it’s undervalued you have to admit they’re doing a lot of amazing things okay credit suisse analyst dan levy wrote in a note to investors on monday he says quote we believe tesla is leading in areas that will likely define the future of car making software
And electrification and even say if you don’t know this dan levy he’s had a lot of negative things to say about tesla stock over the past year or so okay so if you go back to just june credit suisse initiates tesla coverage sees 15% downside mid competition and this was back in june when tesla stock was massively lower than where it is currently okay there were
About 15 percent downside he was saying tesla will have to settle as a niche automaker and will likely have to compete head-to-head with incumbent volkswagen he was saying back then you know saying like tesla is always gonna be like a niche player in the auto market and basically like like a lot of the bears say you know the big guys are gonna come in and they’re
Gonna smash up tousle okay general motors volkswagen all these guys are gonna come in they’re gonna take over the market the big boys the establishment they’re gonna come in they’re gonna take tesla out and tesla will always just be some little like a little my new company in electric vehicles that’s what they’re saying and that’s what he was saying literally
Just you know i don’t know probably what’s that five or six months ago okay he also said tesla can’t deliver hyper-growth anymore this was back in october you wrote this okay he said investors who see tesla as a hyper-growth stock should dial their expectations back an analyst wrote on friday this was damn levy once again and this was back when tesla stock was
About two hundred and twenty dollars to share two hundred thirty dollars a share he slapped it underperform writing on the stock put a price target out there of a hundred and eighty nine dollars and say hey you shouldn’t expect any hyper-growth okay but needless to say he’s finally coming to his senses a bit and getting a little more positive on tesla stock and
Trying to give them some credit which once again regardless of how bearish you are in tesla whether you think it’s overvalued company whether you think it’s not going to be the future whether you think everybody’s gonna come take them out you still have to give them a ton of credit for where the company’s at right now okay and we’ve seen a lot of people who were
Very very bearish on tufts of stock over the past year to get to turn into people that are actually bulls we’ve seen several short sellers that would go and cnbc talk negative about tufts all the time change their positions over the past year or two to actually be very very positive on tesla and some have actually gone from short selling the stock to actually
Buying a stock okay even somebody like a jim cramer who hadn’t historically been you know pretty negative whenever tesla got brought up and as we know like pretty much everybody on cnbc they all seem to be negative or have something negative to say about tesla stock even he is now turning bullish on tesla stock so we’re seeing this as tesla’s continuing to grow
As the the numbers the concrete numbers getting even more and more impressive around tough so i think even a lot of the bears are starting to wake it up and to figure it out whoa i think we might have made a mistake here i think we need to get less bearish and maybe even consider turning positive on this stock okay the firm has a notably pessimistic view of must
Company with a 200 dollar target that represents that expectation as tesla stock will drop 44 percent from its current price of $360 a share real quick backhanded compliment okay you know this this reminds me of that guy the other day okay so essentially there’s other analysts last week he went out there and put a five hundred dollar price target on test of stock
For his bold case but his bare case on the stock was like 10 dollars a share and where he actually thought the stock was going over the next 12 months was $250 a share so what i’m finding time and time again is these these analysts that are negative about tesla stock are just getting a little less negative but they’re not really necessarily turning positive they’re
Still giving backhanded compliments which a backhanded compliment at the end of the day is like something that initially when you hear it it sounds like oldest is positive this is a nice thing they’re saying about us but then you know when you kind of look at in retrospect the way they frame it it’s kind of like that doesn’t sound quite right well credit suisse
Did not budge on its rating or price target levy says he and his team visited the tesla gigafactory one in reno nevada and came away impressed by the companies of battery strategy levy said quote tesla is likely ahead of others on batteries the core of his electric powertrain so this gentleman and likely his team actually went out to reno’s nevada or sparks nevada
I know though some people like to correct me sparks nevada and i actually looked at that massive giga factory that they’ve been building over the last five years or so that massive factory out there and they actually went for a tour and actually got a little more educated on what makes tesla so special how they’re producing so many batteries and the amazing things
They’re doing out there and i wish more and more analysts and more and more bears would actually go to like these tests of factors and actually see what’s going on and actually look at these underlying demand numbers and kind of realize that tesla has amazing technology and they’re way way out in front of a lot of these other company once again this is reminding
Me so much of that analyst that we cover last week where it’s just a backhanded compliment okay the analysts noted that last year tesla has a total of 44 gigawatt hours of battery capacity with 35 gigawatt hours from its nevada gigafactory and nine import it from panasonic according to levy that’s so far ahead of the industry that it’s just shy of the 46 gigawatt
Hours of all other automakers in the world combined a gigawatt hour is a unit that measures energy output and represents 1 billion watt hours next year tests is expected to host a quote power train day which levy expects will shed light on tesla’s battery strategy including increasing production decreasing costs and improving each batteries efficiency those will all
Be three amazing things you want to see tesla be able to produce more and more batteries you want to be able to see them do it cheaper and cheaper over time and you want to see those batteries become more and more efficient over times ok he says quote we expect tesla to highlight why its work in battery gives it a clear competitive advantage vers other automakers
Levy said and so if we just like kind of read through this ok it sounds like the guy is kind of bullish on tesla stock but yet his price target is lacking in a significant way so it sounds like he’s starting to get like oh there there have all these competitive advantages this is going to probably keep them ahead of the other companies and likely as long as they
Continue to build on that they’ll always stay ahead but yet he has a $200 price target on the stock there’s something missing there ok there’s something missing there and we’re seeing this from a lot of these alienists without returning let’s say less bearish on the stock but still have these unbelievably low price targets and we honest a what do and let’s not get
About the valuation there’s something going on here why these guys have such low price targets but why their commentary is actually turning more and more positive on this stock and i figured it out like this ok and let me explain it best here ok so well here’s what’s confusing analysts and here’s why they have trouble with the valuation console right now has a
Market capitalization approaching 70 billion dollars there’s a a really big number i’m going to show you guys a couple other companies here for reference and keep in mind as of right now tesla is a niche automaker in the world they will produce something around like maybe 400,000 units in 2019 out of probably 90 plus million vehicles sold around the world so as of
Right now here today they’re a niche player in the auto market in order to be a big player in the auto market you need to be moving at least a couple of million units per year so they’re nice right now they got a big valuation on and this is confusing analysts because they look at something like ford right ford moves millions of units a year and ford is a company
That has a market cap on it of under 40 billion dollars and this is a company that is extremely profitable so this is where it starts to get really really confusing for analysts trying to figure out the valuation here because they’re looking at tests so i’m like okay tesla’s valuation is massively bigger than a company like for meanwhile ford sells way more vehicles
And ford makes a ton of profit tesla sells hardly any vehicles and loses money and yet tesla has this huge valuation so analysts are just getting very very confused and like this doesn’t make any sense okay you look at something like a general motors general motors has like a fifty one fifty two billion dollar market cap they’re one of the biggest auto makers
In the world they produce millions of cars a year they make billions upon billions of dollars in profits and once again a company that if you’re gonna compare it in terms of scale of how many vehicles gm sells in a year compared to tesla as of right now they’re not even close and obviously tesla hasn’t been a company that still is yet to make a yearly profit
Meanwhile you have gm that makes you know billions upon billions of dollars in profit every year and so people are looking at this analyst let’s put it that way you know so looking at this and like the valuation the valuation the valuation they can’t wrap their head around the valuation okay and let me explain it like this okay you know those other guys the other
Big automakers they’re kind of going down tesla’s going up in a massive way okay so if you go back to 2007 the top nine the top nine selling phones in the world were made by a company named nokia okay they’re top nine of nine phones sold in the world were nokia like how insane is that guys meanwhile you have this this phone come out essentially is called the apple
Id okay it’s sold seven million units in 2007 and an apple was a very nice player they’re coming in this market they’re very nice nokia is the dominant player and you could look at that and you could say well nokia deserves a massively higher valuation than something like apple but what they didn’t realize was nokia they might not even be relevant when it comes
To selling phones over the next five to ten years because they might not have the technology and the wherewithal and the marketing and the branding to get themselves there meanwhile apple looks like it’s perfectly positioned to like capitalize on this next massive wave right and so what ended up happening over the years well no nokia doesn’t even have one phone
In the top ten okay nokia is almost a joke as far as a phone producer i even known one person that has a nokia phone probably in the last probably the last seven to ten years okay not even one no one buys nokia phones nowadays okay meanwhile remember the apple iphone that was just like that little nice player that was like an up-and-comer right apple sells over
200 million iphones a year over 200 million and that number will likely go to 250 million plus next year and not just that but apple makes between usually 80% and 90% of the smartphone profits in the world and so now if you look at this it’s like why the heck would anybody up touch nokia stock back in the day and nokia could end up being like a ford and in general
Motors and some of those other companies right where ford and general motors and all these other automakers v-dub any of the big ones out there right these guys are trying to convert over their electric vehicles as fast as possible because the whole waves going toward electric vehicles and at that same time trying to figure out like how do we have the vehicles drive
Themselves because tess is running toward that game as well and so this just makes it incredibly hard incredibly hard for anybody to try to keep up with tesla so tesla’s business is booming and will likely continue to boom for the next five to ten years meanwhile a lot of these other huge automakers the nokia’s of their day right we don’t know how if it who will
Be even relevant there in five to ten years from now who will even be relevant or are some these big huge automakers that are making billions of dollars in profit right now and it is massive companies will they even convert will they even be relevant or are they gonna be another nokia where it was like wow remember when they were the dominant company in making ice
Vehicles and then they just became irrelevant kind of like nokia was like the go-to phone in like 2007 2006 and they were doing the biggest numbers and then also it was apple and samsung now and apple makes 80 90 percent of profits and never mind that apple figured out how to build a bunch of other products and services around their main product which tesla could
Maybe do over time so that is why i just don’t think a lot of these analysts can figure out the valuation around tesla because they’re looking at it what’s going on today and they’re saying it doesn’t add up because they’re not producing enough cars compared these other companies they have a way bigger valuation they’re not making profits that’s a right now even
Though three last five quarters have been profitable they have been very small profits and so you know let’s look at this and like it just doesn’t make sense the valuation doesn’t make sense well you know i think it all will make sense over the next five to ten years but as of right now i can definitely understand why these analysts are a little confused i think
They just got to look at a more bigger picture in and we’ve seen we’ve seen the writing on the wall we see what apple didn’t and the way apple disrupted multiple industries and now we’re seeing tesla from 2020 to 2030 is going to be in my opinion one of the most disruptive companies if you look at you know the last ten years we saw companies like amazon and apple
Really just completely disrupt from 2010 to 2020 right 2020 to 2030 in my opinion one of those massive companies gonna disrupt a ton of industries will end up being tesla and that’s why i’m a huge believer in the stock and that’s why i think if you’re looking at this on a long-term basis it’s it’s an undervalued company but if you’re looking at on a short term it
Absolutely looks you know super overvalued if you’re looking at what’s going on to day in the business but if you’re looking at this from a long-term perspective you know the valuation can definitely make sense as long as they continue to execute guys so hope you enjoyed this video as always make sure you smash the thumbs up button leave me a comment down there on
Whatever your opinion is on this alright thank you for watching have a great day
Transcribed from video
Wall Street Bear Gives up on Tesla Stock Negativity By Financial Education
