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Chicago, IL – January 19, 2021 – Today’s Zacks investment ideas highlight: Tesla, Inc. TSLA, Amazon.com, Inc. AMZN, Ford Motor Company F and Nio Limited NIO.
Tesla stock is expensive: 3 alternatives
The rise in the shares of electric car manufacturer Tesla was one of the most spectacular success stories of all time. From a (split adjusted) IPO price of just $ 4 per share in 2010, Tesla rose 21,000%, making the company the 4thde the largest in the US – and makes CEO Elon Musk the richest person on the planet.
Musk en Amazon CEO Jeff Bezos has been trading back and forth lately based on the daily value of the respective shares of their companies. They are by far the richest two people in the world.
Despite the incredible momentum in Tesla shares since the announcement that it would eventually be included in the S&P 500 index, the company is a problem for the average investor. On the one hand, the way Musk and his team have worked to bring innovative technology to the mass market is no different – and in many ways, the future looks just as bright.
With a huge lead in the production and sale of EVs worldwide, as well as new battery and home power solutions, many believe that Tesla can continue to grow indefinitely. The ability to sell high margins
On the other hand, Tesla is very expensive in almost every way. It has a market capitalization of $ 784 billion, a share price of $ 825 and a 12-month forecast ratio of 230X. Even if the best sales and earnings growth scenarios materialize, it will be a few years before Tesla ‘outgrows’ its share price with more typical valuations.
Remember that the same concern was expressed about Amazon’s valuation a decade ago, while the company spent a lot on new growth initiatives at the expense of current profits, but that it eventually became one of the most profitable companies in history.
Investors who watched from the sidelines during the Tesla rally may be wondering if it makes sense to get on board now. The answer is that it can still work very well from here on out, but at these levels there is more risk than before if the company gets a rough spot going forward.
Here are some EV alternatives to consider: (in order of relative risk).
Ford
This household name has been selling cars successfully for over 100 years and is about to jump into the EV market to a large extent.
Ford’s F-150 pickups are the best-selling vehicle in the U.S. year after year, and the line is about to include electric variants.
The company recently pioneered a new plant dedicated to the production of F-Series fully electric trucks. The potential is obvious. Selling the EV versions along with the ICE trucks, which already sell nearly a million units a year, can be an ingenious strategy to gain a loyal consumer base to consider an EV when it’s time for a to replace beloved old truck.
Ford hit $ 4 per share during the March 2020 panic sale, but recovered strongly and reached a new 52-week high of $ 10.17 per share last week. Even after the recent rally, this $ 38B market capitalization trades at a forward 12-month P / E ratio of just 11X.
Nine
The company currently sells three mid-size models for the Chinese market, and – like Tesla – the company has an “ecosystem” that includes a car charging network as well as commercial and residential power solutions.
Often referred to as the “Chinese Tesla” (although the real Tesla also manufactures and sells cars in China), NIO shares received a major boost in 2020, reaching nearly 1,400% percent due to lows in the early years as EV shares warmed.
NIO has gradually increased production and now produces more than 10,000 vehicles per quarter. It is still much less than Tesla, but also infinitely more than the ‘zero’ delivery rate of many new EV manufacturers. However, remember that Nio, like Tesla a few years ago, has not yet changed the increase in sales into net profits.
Like all EV manufacturers, Nio’s success or failure to gain significant market share is likely to depend on its ability to acquire battery cells economically. Investors should also be aware that US trade relations with China could represent a wildcard risk for this company trading in the US as an ADR.
Churchill Capital Corp IV
It is a “blank check” company listed on a stock exchange prior to the commencement of any business with the expectation that it will acquire one or more private enterprises, enabling the objective (s) of the acquisition to be disclosed to the public. while the burdensome guidelines of the IPO process.
Recently, CCIV shares have nearly doubled over rumors that the target may be privately owned by Lucid Motors, which was founded by a former Tesla engineer and is currently taking deposits on a vehicle aimed at competing with Tesla ‘s first mass market vehicle – the Model S sedan.
Lucid aims to deliver vehicles later in 2021.
Buying a blank check company in the hope that they will complete a Special Objective Acquisition (SPAC) of a specific company is one of the most speculative long-term bets an investor can make, but the markets are so excited about the prospects for Lucid. Cars that Churchill shares have risen more than 80% after a Bloomberg report last week confirmed rumors that the companies had discussed the possibility of a merger.
Of course, remember that if the deal does not materialize, CCIV shares will almost certainly fall to the $ 10 level they traded a few weeks ago. Warning leader.
These stocks are ready to rise beyond the pandemic
The COVID-19 outbreak dramatically changed the behavior of consumers, and a handful of high-tech businesses stepped in to keep America going. At present, investors in these companies have serious profits. Zoom, for example, jumped 108.5% in less than 4 months while most other stocks sank. Our research shows that five leading stocks may skyrocket due to the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who come in early.
See the five high-tech stocks now >>
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