Tesla, Inc. : Technically solid

09/08/2021 | 04:41am EDT

Eduardo Yusseppe Quiñonez Diaz

long trade Target price hit

Entry price : 761.58$ | Target : 870$ | Stop-loss : 680$ | Potential : 14.24%

The current trading zone is interesting to the point that investors should pay attention to the stock and anticipate a return of the underlying upward trend. Investors have an opportunity to buy the stock and target the $ 870.

Summary

• The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.

Strengths

• According to sales estimates from analysts polled by Standard & Poor's, the company is among the best with regard to growth.
• The company's earnings per share (EPS) are expected to grow significantly over the next few years according to the consensus of analysts covering the stock.
• Thanks to a sound financial situation, the firm has significant leeway for investment.
• Over the last twelve months, the sales forecast has been frequently revised upwards.
• Sales forecast by analysts have been recently revised upwards.
• For the past year, analysts covering the stock have been revising their EPS expectations upwards in a significant manner.
• For the last 4 months, the company has been enjoying highly positive EPS revisions, which were frequently and significantly raised.
• Analyst opinion has improved significantly over the past four months.
• Consensus analysts have strongly revised their opinion of the company over the past 12 months.

Weaknesses

• The company's valuation in terms of earnings multiples is rather high. Indeed, the firm is getting paid 207.65 times its estimated earnings per share for the ongoing year.
• The company's "enterprise value to sales" ratio is among the highest in the world.
• The company appears highly valued given the size of its balance sheet.
• The valuation of the company is particularly high given the cash flows generated by its activity.
• The appreciation potential seems limited due to the average target prices set by the analysts covering the stock.
• Sales estimates for the next fiscal years vary from one analyst to another. This clearly highlights a lack of visibility into the company's future activity.
• The price targets of various analysts who make up the consensus differ significantly. This reflects different assessments and/or a difficulty in valuing the company.

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