Electric & Autonomous Vehicles News - 02/12/2020 - Views: 159

What’s Built Into Tesla’s Stock Valuation at Current Levels?

stock is finally having a relatively quiet day with a gain of less than 1% after days of major gains. So if the shares have finally settled in the $775 range, what does that mean for the company’s valuation? One firm ran the numbers to see what the price of Tesla stock assumes for the company’s valuation and growth.

Tesla stock and valuation disconnected from fundamentals

In a note dated Feb. 7, RBC Capital Markets analyst Joseph Spak reiterated his Underperform rating and $530 price target on Tesla stock. He also recommended taking profits at current levels.

He noted that one common way to estimate a company's valuation is to look at its estimated future cash flows. However, he also pointed out that it doesn't mean a stock's value can't disconnect from the company's fundamentals. He believes that is what has happened with Tesla's stock and valuation.