Tomahawk, WI 09/17/2014 (Basicsmedia) – Tesla Motors Inc. (NASDAQ:TSLA)’s continues to show signs of bouncing back in the market after being pounded, on suggestions it might be’ overvalued. During an interview on CNBC, Stifel Nicolaus analyst, James Albertine argued it is the right time to get involved with stock citing a number of positives that should benefit the company going forward.
Tesla Motors Inc. (NASDAQ:TSLA) is competing in the electric space where there is minimal competition, something that should be of benefit going forward, according to Albertine.
“The demand side there is no competition and no competition coming for a luxury niche electric vehicle to compete on range with the Model S among other features. […] Most importantly it has the benefit of the reservation backlog. The key there is that it can scale its labor and as it ramps volume over the course of the next year or two, we think it got a runway here that is very defensible” said Mr. Albertine.
Tesla Motors Inc. (NASDAQ:TSLA) in-sources 75-80% of its productions meaning it is always poised to enjoy higher yields compared to other automakers in the industry. Charles Sizemore of Investorplace.com, on the other hand, believes Tesla has pushed itself to a point that does not prompt a buy rating. Sizemore believes Tesla is overvalued when compared to other high-end automakers such as BMW and Daimler.
“[…] Tesla Motors Inc. (NASDAQ:TSLA) is trading for about 13x sales right now; you look at the German automakers they are trading for less than one. BMW is about 0.75x sales; Daimler is about 0.5x. Tesla is about 26x more expensive than Daimler right now,” said Mr. Sizemore.
The high valuation that Tesla Motors Inc. (NASDAQ:TSLA) has received in the market is’ based on it being seen more of a tech company rather than an automaker, something that is not going well with the analyst. Sizemore maintains that even if Tesla were to take the auto industry by storm, its value would still be where it is at the moment.