Tesla’s market capitalization recently surged past the $1 trillion mark, making it the most valuable automaker in the world. However, not everyone is convinced that Tesla is worth that much. According to independent investment-research firm New Constructs, Tesla is actually overvalued by roughly $1 trillion.
The firm’s CEO, David Trainer, believes that Tesla shares could fall as much as 88%, to roughly $150 a share. He argues that Tesla’s current valuation is based on overly optimistic assumptions about the company’s future growth. He believes that Tesla’s current market capitalization is based on the assumption that the company will be able to achieve a profit margin of 15%, which is significantly higher than the industry average of 8%.
In addition, Trainer believes that Tesla’s current valuation does not take into account the company’s current debt levels. He argues that Tesla’s current debt levels are unsustainable and that the company will need to raise additional capital in order to pay off its debt.
Furthermore, Trainer believes that Tesla’s current valuation does not take into account the company’s current cash flow. He argues that Tesla’s current cash flow is not sufficient to cover its current debt levels and that the company will need to raise additional capital in order to pay off its debt.
Finally, Trainer believes that Tesla’s current valuation does not take into account the company’s current competitive landscape. He argues that Tesla faces significant competition from other automakers, such as General Motors and Volkswagen, which could limit the company’s future growth potential.
Overall, it appears that New Constructs believes that Tesla is not worth $1 trillion. The firm’s CEO, David Trainer, believes that Tesla shares could fall as much as 88%, to roughly $150 a share. He argues that Tesla’s current valuation is based on overly optimistic assumptions about the company’s future growth, its current debt levels, and its current competitive landscape. Therefore, investors should be cautious when considering investing in Tesla at its current valuation.
