It seemed like a matter of “when”, not “if”, Tesla (NASDAQ: TSLA) would hit a $1 trillion dollar valuation, and that day finally arrived yesterday.
But many are wondering if the valuation is justified.
Can Tesla still rise?
Of course it can, it’s Tesla — one of the most heavily traded and talked about companies in the world. And for the many bears that call it “just a car company”, there’s a whole lot more to it than that. As MyWallSt analyst Anne Marie put it in the latest episode of the Stock Club podcast:
“Tesla isn’t a car company. It’s a tech company that happens to sell cars.”
Of course, it’s easy to get confused by a statement like this when yesterday’s jump comes on the back of Tesla, *ahem*, selling, eh, cars…
100,000 of them, to be exact, have been ordered by rental car firm Hertz. The reported deal is the largest ever purchase of electric vehicles and will bring in Tesla a cool $4.2 billion in revenue. The cars will reportedly be delivered within the next 14 months, and be available to customers in the U.S. and Europe.
That’s not all though. Since its impressive earnings report last week, where it crushed expectations, its share price has clicked into a higher gear — up 16% since. The company is also looking to expand its Tesla insurance business to Texas and beyond, and while some overzealous fans’ estimates of making $1 trillion from this revenue by 2025 may be extreme, it’s certainly reason for excitement.
A trillion-dollar valuation certainly is a big deal for a company that hasn’t been profitable for two years yet, and may even be a risky entry point at such a price, but I wouldn’t bet against it growing further.
Content Manager at MyWallSt
Jamie is the Content Editor here at MyWallSt. His favorite stock is Apple, which is also the first stock he ever bought. Jamie is not only a big fan of its products, but he believes that the tech giant has a whole lot more to give the world, and hasn't even scraped the surface of its potential.