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Tesla stock just closed at a record high and Tesla's market cap exceeds $70 billion: Analysis

by Eva Fox December 19, 2019

Tesla stock just closed at a record high and Tesla's market cap exceeds $70 billion: Analysis

After the market opened on Wednesday, Tesla's stock price rose 2.4% to $388.15 per share. At the end of the day, Tesla's stock price rose 3.74% to $393.15. At the same time, Tesla's market capitalization amounted to $70.4 billion, while at the same time as the market value of giants such as GM amounted to $53.3 billion, and Ford - only $37.8 billion.

In 2017, the market value of Tesla exceeded GM, but later the market value of GM exceeded Tesla back. In the third quarter of this year, Tesla's market value again exceeded General Motors due to profit exceeding expectations.

The rise in stock prices is primarily due to the good expectations of investors regarding the development of Tesla's business.

Daimler is delaying deliveries of its first EV for the US market—a sport-utility vehicle called the Mercedes-Benz EQC 400. The vehicle was first delayed back in February. “Now the vehicle is not expected to be delivered to U.S. customers until 2021,” wrote Deutsche Bank analyst Emmanuel Rosner in a Tuesday research report. “Consumer demand in Europe is much higher than in the U.S. in part due to higher European efficiency and pollution regulations, and with its overall battery supply limited, Mercedes decided to focus resources on the market where demand is highest.”

Yes, Tesla has record deliveries even in Europe. From January to November 2019, Tesla was able to delivered 87,770 vehicle. These data don't take into account December, which will have the largest number of deliveries.

Source: Teslamotorsclub

For example, only in the Netherlands, in December 2019, 5,898 Tesla Model 3 were already registered, according to kentekenradar, and 107 Model S and 91 Model X, according to eu-evs.

Tesla Registration Model 3 in the Netherlands kentekenradar

Model S and Model X, according to eu-evs

On December 16, a record was set for the number of registrations Model 3 in the Netherlands, these were 648 registrations. And on December 17 a new record was set - 665 registrations!

Source: kentekenradar

Let's get back to the US market. High-end EVs such as the Jaguar I-Pace and the Audi e-tron have “severely underperformed expectations” in 2019, selling only 2,418 and 4,623 units, respectively, year to date through November.

Tesla has been a controversial stock for a long time, with a higher-than-average short interest for many years. But Tesla short interest has been declining steadily since the summer, when shares were near their 2019 nadir.

Better-than-expected third-quarter profits catalyzed the recent Tesla share price rally. The stock is up almost 60% over the past three months, far better than comparable gains of the S&P 500 over the same span.

We see how skeptics and critics change their attitude towards Tesla, because Tesla is not just another company, like many of those present in the auto market today. Tesla is an idea, Tesla is a way of life, Tesla is success. This is exactly what skeptics understand.

Tough judge Kevin O’Leary, aka Mr. Wonderful, who had previously hated Tesla (by his own admission), changed his position and invested in Tesla shares. Moreover, he ordered the Tesla Cybertruck Tri-motor for himself.

The famous American financial presenter Jim Cramer, who had been against Tesla for many years, publicly stated on Mad Money: "I don’t want you to own Ford. I want you to own the stock of Tesla."

He changed his attitude towards Tesla gradually, and the attitude of his family to Tesla's products played an important role in this. After his daughter and wife gained experience in driving Tesla cars, they were impressed by them. Cramer admits that Tesla has a cult product, an great balance sheet and an excellent leader: "So, cult product? Check. Balance sheet? Check. Leader? Check."

The Credit Suisse has a notably pessimistic view of Tesla, with a $200 price target. But, now the firm sees Tesla's big advantage and expresses its praise to Tesla.

“Despite the fact that we have a low Tesla rating, we still consider it important to give Tesla credit where it deserves it,” Dan Levy, an analyst with Credit Suisse, wrote on Monday for investors. "We believe that Tesla is a leader in areas that are likely to shape the future of the automotive industry - software and electrification ... Tesla is likely to be ahead of the others with batteries - the core of the electric drivetrain," said Levy.

All of these reasons are a powerful incentive to push stock prices up. Since everything indicates that the Q4 of 2019 will close successfully, I don't see any reason for the price increase to stop.

Any information in the article is not a financial recommendation and a call to action. I'm not a holder of Tesla shares and don't plan to buy it in the next 72 hours.

Featured image: Stockprice




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