Tesla (NASDAQ: TSLA) is an innovative company that has a wealth of know-how in battery technology and automated driving technology, and is leading the electric vehicle (EV) industry.
Comparing Tesla’s quarterly stock price rise and revenue growth over the last five years, the stock price rise until 2019 Q3 has a relatively strong correlation with the preceding quarterly revenue’s growth, while operating income growth does not substantially have correlation with the stock price rise.
In addition, Tesla has been releasing EBITDA in its earning results since 2019 Q2. We found that at least Tesla’s stock price rise since 2020 Q1 has a strong correlation with the preceding quarterly adjusted EBITDA’s growth.
We believe that Tesla’s recent surge in stock price has been in line with Tesla’s adjusted EBTDA’s growth, and Tesla’s stock price could rise further in response to revenue growth and adjusted EBITDA’s growth.
In this regard, Tesla has relatively higher ratio of depreciation and amortization among total revenue compared to the other automakers, and Tesla is still building several mega plants around the world. In addition, Tesla is trying to conduct cost savings and EV’s price reductions through bold streamlining its manufacturing line, and if total asset turnover and operating margin will be improved by such efforts, both revenues and adjusted EBITDA would drastically be improved.
Watanabe & Brothers’ Investment expects Tesla’s continuous growth and we will invest in Tesla from a long-term perspective.
- Watanabe & Brothers’ Investment is holding shares of Tesla.
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