In a world where electric cars are far from the norm, it seems odd to us laypeople that you can't buy a share of Tesla stock (ticker symbol TSLA) for less than $230. But a research note issued Monday from Goldman Sach's respected team of auto industry analysts (seen in PDF form in our gallery) has added fuel to the irrational exuberance fire, guaranteeing that Tesla's stocks should hover at these seemingly unreasonable prices for some time.

Goldman Sachs analyst Patrick Archambault compared Tesla CEO Elon Musk to Apple's Steve Jobs, saying the Model S is a lot like the iPhone. The major difference is that it will take a lot longer for Tesla's electric cars to make a sizable dent in the auto industry, Archambault said, than it took for the iPhone to take over the smart phone world. If Tesla rolls out a non-luxury car in the next few years as is rumored, Archambault predicts the company could be selling 500,000 electric cars a year by 2022 or 2023. Based on those projections, the Goldman Sachs analysts says a fair price for Tesla's stock right now is about $200 a share.

Which, in the upside-down world of Wall Street, means the current share price of around $238 is nearly $40 overvalued. But that hasn't stopped traders from pushing up the price of Tesla's stock today between $3 and $4 a share. Over at Oilprice.com (subscription), contributor Martin Tiller on Friday was already sounding the alarm bells, saying Tesla share's are overpriced, despite the promising technology.

"A world where electric vehicles are the norm is a distinct possibility and is probably desirable, but it isn't here yet," he wrote (the full article can be found here.) "TSLA, however, is priced as if it is, and that's why, as much as I admire what Tesla is doing, I'm not a fan of its stock."


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  • 78 Comments
      404 not found
      • 9 Months Ago
      This is a drop in the bucket compared to paying $19B for "Whatsapp".
      404 not found
      • 9 Months Ago
      Share price alone doesn't tell the entire story. Tesla's market cap is less than half of HMC (Honda) and its share price is mid $30's.
      torchtest
      • 9 Months Ago
      Goldman's scenario analysis gives a 75% probability of losses exceeding 49% (page 4). Considering their bias being an IPO underwriter for Tesla I think they're trying to be somewhat realistic. Certainly they would like to justify the stock price to keep trading volumes up and to win any secondary offerings, but I think the arguments are plausible. I don't know if I'd give them a cumulative probability of 25%, but one can easily use the PV of Goldman's scenarios and come up with their own subjective probability weights to come up with an estimate of the current value.
      Link
      • 9 Months Ago
      All BS -- "fugazi" http://youtu.be/oEJza1-4zRk
      kajohns1964
      • 9 Months Ago
      The internal combustion engine will be the primary automotive power plant for at least another one hundred years
        404 not found
        • 9 Months Ago
        @kajohns1964
        Not if gas hits $20 per gallon.
          kajohns1964
          • 9 Months Ago
          @404 not found
          If it gets to 20 bucks it will be because of increased taxes. Won't matter anyway because by the end of the century cars will get 200mpg
          Joeviocoe
          • 9 Months Ago
          @404 not found
          200 mpg is not physically possible on any reasonable driving cycle with car that seats 4 people comfortably and safely. There are limits to thermodynamic efficiencies of internal combustion engines. The only current methods to even approach 100 mpg, are to reduce the mass below what is comfortable and safe, or to drive on a cycle that is not at all acceptable for everyday driving. The other method to approach and exceed 100 mpg... electrification.
      loopless
      • 9 Months Ago
      I think Tesla is heading for a big fall as a car maker if they try to go downmarket. Their cars currently sell to a nerdy wealthy, tech minority. The general public has only a passing interest in electric cars - they are not that stupid. Even in Europe with all its regulations and much higher fuel costs, EV's make up a vanishingly small % of the market. If nuclear fusion comes online with unlimited cheap energy, EV's start to make sense... until then.
        gpmp
        • 9 Months Ago
        @loopless
        You do realize that an EV uses LESS energy than ac ICE car, right? So why would we need unlimited cheap energy for them to make sense? In fact if we took all the gasoline and diesel currently consumed by passenger vehicles and used it to generate electricity in large power plants for EV's, the US would cut it's gasoline/diesel use by more than half.
        ravenosa
        • 9 Months Ago
        @loopless
        More downmarket cars will simply validate the wealthy people driving around the sexy, expensive model as they see more/cheaper Tesla models on the road. It will only make them feel like they made a smart decision going with the company. Also, more downmarket cars will generate more need for Supercharger stations.
      dan.frederiksen
      • 9 Months Ago
      Stocks bubbles is what the stock market does. The company would probably be overvalued at 20$ per share but instead it's getting close to the value of GM and exceeding that of Audi and Porsche. But the Tesla bubble could actually fill in. It's far from a given but it could.
      kajohns1964
      • 9 Months Ago
      While Tesla makes some nice vehicles they will never be a mass market auto manufacturer.
      SloopJohnB
      • 9 Months Ago
      A world full of electric cars is far from desirable, and I'm a Tesla fan if not owner. They're niche cars with adequate/excellent range, but superchargers are not going to fix the charging issue. IF i installed those fugly solar panels on my roof and could charge my Tesla with them, however, now we're getting into the realm of possibility.
        Grendal
        • 9 Months Ago
        @SloopJohnB
        The charging issue is a NON-issue. It's really just a fear. If you plan on long distance travel then, like most people, take an airplane. If you plan on a road trip then Supercharging should be more than adequate when the whole system is in place. Or if you really think charging is too inconvenient, then simply rent a gas car for the trip and avoid putting mileage on your expensive EV. It's all just a matter of personal needs and convenience.
          Joeviocoe
          • 9 Months Ago
          @Grendal
          The price point alone is the reason why a Tesla is unlikely to be the only car. After the Model E, we can revisit that question and find a very different answer. Atlanta will have a Supercharger soon enough.... and if you cannot spare your precious time to stop and rest for half an hour... then you deserve to pay for $5 per gallon.
          edward.stallings
          • 9 Months Ago
          @Grendal
          Charging is very much an issue. A Tesla is not a practical car for a single car household. Most people use their cars in a way that a Tesla could not be used many times a year. I will be going to a road race race in GA in a few months, about 350 mi. I would not want to subject myself to airport security for that and have to rent a car. Visiting relatives a state away, going to the beach or mountains (which would really shorten your range) are things that people typically do. It would be interesting to know what percentage of Teslas are the only car in the house.
        Joeviocoe
        • 9 Months Ago
        @SloopJohnB
        1) Talk to Solar City about getting panels 2) Superchargers are not the only thing planned. Elon plans to build a test network of Swap Stations from LA to SF... in the coming months.
      Joeviocoe
      • 9 Months Ago
      Another "analyst" with another opinion. How many times did THIS analyst accurately predict anything? Oh wait, they rarely ever do.
      Walt
      • 9 Months Ago
      Tesla shares are underpinned to a large extent by high gas prices. With a cooling Chinese economy and falling oil prices, how well will this company fare at $2.00 a gallon gasoline? What's that you say? It'll never happen? It's betting on the improbable that makes riches on Wall Street.
        Spec
        • 9 Months Ago
        @Walt
        Yes . . . I do say It'll never happen. It can't happen. At $2/gallon much of the fracking, deepwater drilling, and tar sands processing would stop because it would no longer be profitable. A cooling Chinese economy could cause oil prices to remain flat for a while but they are not going to go down significantly. They can't.
      raktmn
      • 9 Months Ago
      Step 1: Pick an arbitrary point in the Future. Step 2: Guestimate some numbers nearly a decade from now. Step 3: Decide that the arbitrary point in the future is really, really important, for no particular reason. Step 4: Declare that the stock is overvalued today based upon that specific arbitrary date that was selected for no particular reason. What was the point? Change the arbitrary date to 2028, and change the assumptions to double the production and magically the price today is undervalued? Is this how this game works?
        Joeviocoe
        • 9 Months Ago
        @raktmn
        Yep.. speculative analysts playing the public like puppets to sell articles.
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