On Monday 3/4/2017, Tesla Inc. exceeded the price of 300 USD per share for the first time in history. The company, which was founded in 2003, reached higher market cap than Ford or even General Motors (GM). It has become the most valuable auto manufacturer company in the US. The market value of company reached 52.7 bln. USD in comparison with 49.6 bln. USD belonging to GM or 45 bln. USD to Ford.
This day, Tesla reported an increase of 69 percent in sales of cars in the first quarter of 2017 over the same quarter as the previous year, which was surprising for investors. The price of shares rocketed by 6.8 percent.
There is an insight below into some ratios of the two largest US auto manufacturer companies. As you can notice, total revenue of Tesla has been rising alongside (but opposite direction) with net income. Indeed, Tesla has not revealed positive net income so far. As for D/E ratio, the company has decreased it for more than 40% since 2013. The disadvantage for all investors might be not paying off any dividends. However, the price of the share has increased by 804,5% since the beginning of the year 2013.
On the other side, there is General Motors, decades of well-known auto manufacturer company. The company with approximately the same market cap, but more than 23x higher total revenue and huge net income. In comparison with Tesla, GM currently offers a dividend yield of 4,51%. The price of the share has increased only by 17,8% since the beginning of the year 2013.
But let’s back to the Musk’s Tesla. In November last year, Tesla closed its 2.6 billion USD merger with solar-power provider SolarCity in order to create “fully integrated product”, as Elon Musk, the CEO remarked. It has helped the company to enlarge research and development in order to improve their batteries in cars. Therefore, the company is going to publish a new type of autos called “Model 3” in June this year.
Investors believe Elon Musk very much. Maybe, financial results of the company are consequently the second most important. As some economists often remarked: ‘Musk has a vision, he has a dream and… nothing can stop him’. Briefly said, Tesla is worth watching!