Tesla Stock Analysis- Is Tesla Stock (TSLA) Still a Buy at ALL-TIME Highs?

0:00 Tesla stock analysis if you had shorted tesla stock one year ago today you would be down a whopping four times your initial investment tesla stock hit all-time highs last week and actually breached the crucial psychological level of one thousand dollars per share tesla might soon defrone toyota motor corporation as the most valuable car manufacturer in the world as of june 12 2020 tesla was worth a staggering 173 billion dollars this actually makes tesla worth more

0:41 Than honda motors and volkswagen combined even though tesla does not sell nearly as many vehicles as these other companies i think that this high stock price is warranted as they have a wealth of patents and intellectual property that will serve as competitive emotes for years and years to come today on nine to five investing a youtube channel where i talk about today's game changing stocks i'm going to tell you why i think that tesla is still worth buying at an incredible 1

1:12 000 per share 9-5 investing tesla first ipo'd on june 29th 2010 at just 17 per share i really want you to think about this for a second if you had invested just 1 000 at the ipo price you would have about 58 shares of tesla if you just simply did nothing with that investment you would be sitting on about 58 000 as of today but let's just think about this a little larger like we like to do on nine to five investing if you had just invested seventeen

2:01 Thousand dollars back in 2010 during tesla's ipo you would actually be a millionaire off of that investment alone today it does this very little good to daydream about something that we did not do or something that we cannot change however i do think that this occurrence can teach us a very important investing concept and that concept is the power of buying a game-changing company like tesla and just never selling it tesla has just come so far and overcome so much execution risk

2:32 Especially from a mass production perspective and with tesla's move into several new markets including the semi truck market with the tesla semi the electric sports car market with the tesla roadster and the pickup truck market with the tesla cyber truck it seems like tesla could just be getting started with their broad mission of making consumers and businesses more eco-friendly and look pretty cool doing it so today i'm going to break down my top

3:03 Five bullish points and my top five bearish points about tesla stuck in 2020. now let's just get into those bullish points bullish point number one tesla has meaningfully differentiated itself from the competition in terms of its battery technology and will likely vertically integrate their production process and make their own batteries in the years to come tesla is committed to differentiating themselves from the competition in so many ways and one of these ways is with their battery technology if you follow tesla stock you probably

3:37 Already know that tesla acquired maxwell technologies a manufacturer of ultra capacitators that also has some pretty revolutionary battery technology for about 218 million dollars in an all stock transaction in the second quarter of 2019. interestingly enough musk has commented that tesla was not all that interested in maxwell technology's main business at the time which was the production of the ultra capacitators elon musk specified that advancements in lithium ion battery technology have made it toward the ultra capacitators are not really needed anymore for electric vehicles musk has also commented that one of the main reasons for buying maxwell technologies was for their dry electrode battery technology

4:25 Basically this dry electrode battery technology can increase a battery's energy density so right now the current bottleneck is about 300 watt hours per kilogram and the dry electrode battery technology could take this to a new bottleneck of up to 500 watt hours per kilogram basically if all goes as planned tesla vehicles will get much better range with this dry electro battery technology currently the long range version of the model s can go up to

4:57 370 miles on a single charge now i'm an accountant not an engineer but if they're able to increase the energy density of their batteries all the way from 300 watt hours per kilogram to 500 watt hours per kilogram it seems like that would mean the tesla model s would be able to go a max range of 616 miles japanese engineers have actually expressed that they believe that tesla's battery technology is about six years ahead of any of their competitors many

5:26 Analysts have speculated that tesla is setting themselves up to basically produce their own batteries unlike most electric vehicle manufacturers that just outsource this work this move towards vertical integration would really help tesla have complete control over the quality of their batteries and also help them lower their costs overall the acquisition of maxwell and their dry electrode battery technology has helped tesla stay several steps ahead of their competitors in terms of

5:56 Battery technology and this will likely serve as a significant competitive moat in the electrical vehicle market for many years to come if you are enjoying this video so far please smash that like button like i smashed this broken tv that i bought for ten dollars off of craigslist and a potentially unconvincing attempt to convince you to smash the like button doing the small action really helps me grow my channel and reach more people and pursue my passion

6:24 So it means a lot to me thank you polish point number two tesla is ready to mass produce their semi truck the mass production of the tesla semi is a tremendously bullish point to me so in some of my other videos i have covered the nikola motor company semi trucks that are powered by hydrogen and electric motors and after doing more research it turns out that the tesla semi is actually the most cost efficient model of semi truck and that's including

6:53 The hydrogen powered nikola motor company semi trucks and the traditional diesel fuel trucks per recently compiled data from thetruckersreport.com it costs about a dollar 58 per mile to run a traditional diesel fuel truck in elon musk's 2017 presentation of the tesla semi he explained that a traditional diesel truck costs about a dollar 51 per mile to operate i believe that the slight variance between the truckersreport.com estimate and elon musk's estimate of what it

7:27 Costs to run a traditional diesel semi truck per mile is mostly just due to changes in the cost of diesel fuel and maybe some basic assumptions around how much does it cost to maintain and repair a diesel semi truck regardless of whose estimate is more accurate here's what really matters the tesla semi cost a dollar 26 per mile to run yes you heard me correctly a dollar and 26 cents per mile to run that tesla semi big corporations that drive hundreds of thousands of

8:00 Miles across the country each year transporting their goods will actually save a ton of money by going with the tesla semi truck instead of a traditional diesel fuel truck which is actually kind of crazy to think about because would you rather drive this bad boy or this i think that the decision is pretty easy especially when you consider the fact that tesla is the leader in artificial intelligence technology for self-driving vehicles now the self-driving technology is not 100

8:32 Autonomous or perfect yet i think that having this artificial intelligence technology in these semi trucks will be an absolute game changer because in the united states these semi-truck drivers are allowed to drive up to 70 hours per week and driving up to 70 hours per week is inevitably going to make them fatigue and being so tired inevitably leads to accidents and this artificial intelligence that is built into the tesla semis will actually help correct some of the

9:01 Potentially fatal mistakes that these drivers could make for example god forbid that a semi-truck driver is extremely fatigued from a long week of work and might fall asleep at the wheel or might just be so tired that they swerve into other lanes the artificial intelligence built into the tesla semi will then kick in and automatically adjust that semi truck back into the proper lane potentially saving the life of the driver and the lives of anybody in the

9:30 Way not only would the tesla semi save lives in the way i just described but in addition to that it would actually help cut the emissions that come from the traditional diesel fuel trucks that we have on the roads today tesla asserts that their tesla semi will run up to 500 miles on a single electric charge and that they will also build these mega charger stations around the country that will basically be able to power the semi for a 400 mile range with only a

10:00 30 minute charge and don't make the mistake of thinking that the tesla semi is just some little side project for tesla this market is actually estimated to be worth and this is from the motley fool 240 billion dollars annually make no mistake about it once the tesla semis hit the road on a mass scale they're going to be an absolute game changer and make tesla and its shareholders a whole lot of money bullish point number three tesla will release the first

10:29 Iteration of their cyber truck in 2021 and there are already an estimated 535 000 pre-orders i have always wanted the practicality of having a truck but never seriously considered buying a truck just because of how much gas they consume i am personally an avid user of craigslist and there have been many situations that i have been in where i have not been able to buy something that was physically large because my four-door sedan simply cannot handle the size given the

11:00 Fact that the tesla cyber truck can carry these craigslist loads for me and the fact that it runs off of electricity and optional solar panels that charge at 15 miles per day this might actually just be the perfect vehicle for me tesla claims that with cybertruck you get more utility than a traditional truck with the performance of a sports car i don't know about you but that one line marketing pitch actually makes me want to buy a cyber truck on its own

11:30 And who knows maybe if you light up that like button it'll help youtube spread this video and therefore my channel and maybe one day i'll be able to afford a tesla cyber truck myself to give you a little bit more detail tesla says that the maxed out version of their cyber truck the version with tri-motor all-wheel drive will go from 0 to 60 miles per hour in just 2.9 seconds and be able to carry a load of up to 14 000 pounds ford sells hundreds of thousands

12:01 Of their f-series trucks every year a ford f-450 can go from zero to 60 seconds and 8.3 seconds and carry a load of up to 35 000 pounds clearly the towing capacity of the f-450 is far superior to the cyber truck as it can carry the 35 000 pounds versus a cyber trucks maximum of 14 000 pounds but in my personal opinion the average consumer is not going to need that full 35 000 pounds that the f-450 offers and i believe that the cyber truck at 14 000

12:38 Pounds will be more than enough and on top of that with the cyber truck you get that epic zero to 60 miles per hour in just 2.9 seconds that the f450 just cannot even come close to touching i believe that the design of the tesla cyber truck is going to be something that you either really love or you really hate as it is really breaking from that traditional mold of what people are used to seeing a truck look like for example i really appreciate the

13:05 Design of the tesla cyber truck yet my girlfriend believes that this design should have actually just stayed in minecraft regardless i believe that tesla is going to sell a lot of their cyber trucks bullish point number four on february 13 2020 tesla raised about two billion dollars in cash from a secondary offering which puts them in a ridiculously good cash position normally a secondary offering is a very bearish point because it dilutes current

13:35 Shareholders however i think this is a unique situation where this is actually a bullish point so why is this secondary offering different than other secondary offerings well the difference with this secondary offering is that tesla stock was priced at 767 dollars per share at the time of the offering although this share price does not seem high today you have to remember that tesla stock was priced at just 225 dollars per share about a year ago today if there's any

14:03 Time to dilute a stock it is right after the stock has had a massive run as management can fetch as much money as possible for those newly issued shares if you do not already own tesla stock you could probably buy it now and not have to worry about a secondary dilutive offering for the most part as of march 31st 2020 tesla has about eight billion dollars of cash in the bank and they have now started to turn a profit so it's very unlikely they'll ever need

14:29 To do a secondary offering again now do not get me wrong i am not saying it is nearly impossible for tesla to do another secondary offering however companies that are profitable year after year consistently usually do not do a secondary offering and tesla does have that eight billion in cash i mentioned now i think that tesla might finally be getting there to where they might have just year after year consistent profitability and if that if that's the case then i

14:53 Really doubt they're gonna do another secondary offering bullish point number five there's strong demand for the tesla model 3 especially in china tesla recently lowered the price of their tesla model 3 in china to be eligible for new energy vehicle subsidies from the chinese government the price of the tesla model 3 in china was lowered by about 1 64. usd this lower price made it possible for the purchaser of the tesla model 3 to collect a subsidy from the chinese government of about 2 867 usd once tesla lowered the price of their tesla model 3 and enabled customers to take advantage of this generous subsidy from the chinese government the demand for the tesla model 3 exploded tesla is now receiving over 1 000 orders in china alone which is over double the capacity they can produce in their shanghai gigafactory which cranks

16:00 Out about 3 000 of these vehicles every week management believes that they can eventually get their production capacity to 4 000 vehicles a week but regardless tesla has more demand than they can keep up with in china a report came out that specified that tesla's gross margin for the model 3s in china is about 39 which means that tesla is very well positioned to make a ton of money selling these vehicles in china now that we've covered my top five

16:34 Bullish points about tesla stock let's take some time and talk about my top five bearish points about tesla stock which were admittedly pretty hard to come up with but here's the thing guys i try to keep it balanced between a bullish and bearish perspective when i'm analyzing stocks here on 9-5 investing so let's just jump right in bearish point number one tesla's co-founder and ceo elon musk tweeted on may 1st 2020 tesla stock price too high imo this one honestly just

17:08 Makes me laugh why on earth would elon musk say something like this i mean at the end of the day all this tweet really did was create a big internet buzz and make shareholders angry as they watched their network decline elon musk's tweet made the stock price crash about a hundred dollars per share but the interesting thing is after that crash it has actually uptrended to new highs since then i think that this tweet that hurt tesla stock in the very short

17:39 Term just really shows that elon musk does not care that much about money given the facts that elon musk is a co-founder of tesla and the current ceo you would have to assume he owns a lot of shares and he does he owns 38.7 million tesla shares to be exact which means if we assume that his tweet made tesla stock drop a hundred dollars per share it means that in the short term he lost himself 3.8 billion dollars and the hilarious thing is he just does not care regardless

18:12 I think that if a co-founder and ceo of a company is saying that the company is overvalued then there's a good chance it could actually be overvalued and before i make any big tesla shareholders mad i am talking about in the short term i think that in 10 years the current price of tesla stock will almost certainly look cheap but in the short term the ceo of tesla saying that the shares are overvalued just seems a bit bearish to me call me crazy bearish point number two

18:44 U.s china relations have the potential to get a lot worse given the entire global health crisis occurring right now this bearish point affects entire sectors of the stock market but i think in particular tesla will be affected if u.s china relations sour as i had mentioned earlier in this video the demand for the model 3 has absolutely exploded in china and this success could be shut down in an instant if the chinese government decided to do so if relations between the united states

19:15 And china got really bad the chinese government could theoretically shut down the tesla gigafactory in shanghai and banned tesla from selling their vehicles in china since they are a u.s corporation in my opinion there is a high chance that nothing will happen in terms of u.s china relations affecting tesla however something like this actually happening would be very very bad for tesla's business bearish point number three competition will continue

19:47 To grow in the electric vehicle manufacturing space many of the companies that produce the traditional internal combustion engine or ice vehicles such as honda ford and general motors have seen the success that tesla has had with their premium electric vehicles and they have decided they want a piece one general rule of economics is that the more competitors there are in a market selling the same or similar product the more the price will be pushed down

20:20 To a certain extent now obviously competition pushing down price does have a limit it's not like if there are dozens and dozens of competitors an electric vehicle is gonna go for some crazy low price like one dollar but regardless having more and more competition is going to shrink those profit margins that tesla or any other company selling electric vehicles is gonna make per unit sold regardless at this point in time tesla holds spots number one

20:49 And number two for the top five best-selling premium electric vehicles in the united states at this point tesla seems to have the premium electric vehicle market cornered however as time goes on it is likely that more and more competitors will enter the market develop their own proprietary technologies and force tesla to lower their prices and inevitably this will shrink tesla's profit margin in the long run bearish point number four the valuation

21:20 Now i know i already mentioned elon musk's tweet about the valuation but give me a break it's really hard to find bearish points about tesla so for the fourth bearish point i'm going to give my own perspective on tesla's valuation in 2019 tesla sold about 367 600 vehicles and as of june 21st 2020 tesla has a market capitalization of about 185 billion dollars at the time recording this video toyota motor corporation is the only car manufacturer worth more than tesla in 2019

21:58 Toyota motor corporation sold about 2 million and 85 000 vehicles about six times what tesla did in 2019 and they are only worth about 1.24 x of what tesla is then if you take a look at volkswagen the numbers look a little wackier even they sold over 6 million cars in 2019 yet they are worth less than half of what tesla's worth now the volume of cars is just one piece of the puzzle there are a bunch of other things you must consider when valuing a car

22:30 Manufacturer including proprietary technology cash flow generation profit margins etc however taking a quick look at what each of these vehicle manufacturers are doing in terms of volume can give us just a quick look at the valuation and kind of show us that maybe in the short term tesla's valuation has gotten just a little bit ahead of itself bearish point number five the price of tesla stock has already come so far so fast almost always if a company that is not a biotech

23:03 Company quadruples in about a year or less there's almost always some sort of correction now to be clear i'm not saying that tesla is gonna be going back to 200 or something like that i think that the uptrend is very strong but i wouldn't be surprised to see a retracement to maybe like five or six hundred dollars per share now it is entirely possible that tesla could just continue this impressive bull run all the way to arc invest seven thousand dollar per share price

23:32 Target but odds are there will be some sort of correction at some point it just happens with most stocks no matter how great of companies they are i find this correction for tesla stock to be particularly likely in my opinion just because of the type of the market that we're in with the global health crisis and on top of that the potential deterioration of u.s and china relations however if you are looking to hold tesla stock for the long term and just really keep that

24:00 Long-term mindset of three five ten years i'm holding and even more really warren buffett says that the best time to sell a good company is actually never so if you're keeping that long-term mindset i think that your investment in tesla is going to be very profitable so if you watched my last video i talked about how i made about four thousand dollars trading the nikola motor company stock and i only traded this talk and made this money because i was trying to make that last video a

24:28 Little bit more interesting for you guys and it ended up making me a really nice chunk of money so i decided to reinvest those profits into this youtube channel to make the content more interesting and basically the big secret item that i was gonna buy uh it's a flamethrower if you notice at the beginning of the video i had a flamethrower on my back but it only had water in it and the reason for this is because it came with a leak and i'm currently coordinating with the

24:55 Company to get a replacement and as soon as i get a replacement you guys are going to see that in the videos but i just thought i would at least implement it with the water since that's safe safety is my number one priority here on 9 to 5 investing i would never want to hurt myself or anyone else just to make a stupid video but as soon as it's safe there will be flamethrowers in my videos so look forward to that guys so what will i be doing with tesla stock

25:23 I actually want to be a shareholder of tesla very badly i will admit i'm actually feeling that dreaded fomo a bit with this stock right now but fomo is not usually what makes you money so i'm gonna see if the market will give us another crash at some point on this tesla stock what's funny is back in may of 2019 i was seriously considering going all in on tesla and spending about 15k on shares that were priced at about 180 back then i vividly remember

25:55 Sitting in the parking lot of one of my favorite mexican restaurants polio cesaros waiting for a pickup order and looking at the 15 000 or so that i had saved up and considering should i put all of this into tesla stock which was crashing at the time but none of these thoughts really even matter because i did not take the risk i have absolutely no regrets though because it is 100 pointless to think what if or i should have instead it is much more constructive to

26:24 Think about what i can do today to build my wealth for the future and what i can do in the present is basically buy a nice size position in tesla if the stock ends up crashing again i plan on starting with just a couple of shares of tesla and if the stock continues to crash i will buy more and more but my next question is what will you do did you already invest in tesla back on that crash in may of 2019 where i failed to buy shares will you buy shares in the future

26:52 Let me know if you enjoyed this video commenting actually really helps youtube spread my video and grow my channel so i really appreciate every comment i get if you enjoyed the video please don't forget to smash that like button and subscribe to the channel really appreciate it thanks for watching and have a great day nine to five investing