As the stock market rally adds USD 200 billion in only 13 days, Tesla’s market value soars
On Wednesday, the stock finished down slightly, ending Tesla’s record 13-day sequence of advances that had seen the American automaker’s worth increase by more than $200 billion.
The streak saw a more than 40% increase in Tesla share price, bringing its market worth to almost $814 billion. Nearly $240 billion, or more than the whole value of Toyota, the second-most valuable manufacturer in the world, was added to the market capitalization during the run.
The announcement that venerable American manufacturers Ford and General Motors will be using Tesla’s charging technology served as the catalyst for the rise. Despite the fact that there are other rival charging methods in use across the globe, this essentially places 60% of the U.S. electric car market on the North America Charging Standard (NACS) utilized by Tesla.
According to Refinitiv data, the stock price of the electric vehicle manufacturer is still much above Wall Street expectations, trading 28% over the analysts’ consensus target price of $200.
“What has changed for the Street over the last month is the recognition with the Ford and GM supercharger partnerships that Tesla’s sum-of-the-parts valuation is now finally starting to get tapped into,” said analysts at Wedbush Securities in a note.
The company’s sky-high price-to-earnings ratio now significantly exceeds that of rival automakers thanks to this surge. Tesla’s future price-to-earnings ratio is slightly under 62, which is the same as Amazon.com’s level of 63.7.
In comparison, data from Eikon shows that Ford and GM have P/E ratios of 8.2 and 5.6, respectively.
Wedbush likened Amazon, which for long years defied market forecasts that its stock would ultimately decline, to Tesla’s share increases. Tesla stock fell precipitously in 2022, losing 65% of its value, which enabled short sellers to profit handsomely.
According to S3 Partners, the 13-day rebound cost short sellers more than $7 billion in mark-to-market losses, bringing the total loss amount for the year to about $12.7 billion.
