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Tesla Motors Inc (TSLA) Is The Next Apple Inc. (AAPL)

Several weeks ago Professor Aswath Damodaran of NYU posted a detailed valuation of Tesla Motors Inc (NASDAQ:TSLA) that I discussed with him and examined carefully. In a previous post, I noted that Aswath made a host of highly optimistic assumptions regarding the future earnings performance of Tesla Motors Inc (NASDAQ:TSLA). Despite the optimism, however, his value indicator fell short of $70 per share. At the time, Tesla Motors Inc (NASDAQ:TSLA) was trading at $160. Friday it closed above $190. This leads to a very interesting question – who was buying Tesla at $190? There are two basic possibilities.

Tesla and Apple
Tesla Motors’ Stock In Future

One is that there are those who see an extraordinarily bright future for Tesla Motors Inc (NASDAQ:TSLA). And I do mean extraordinarily. To justify a price of $190, it is necessary to assume astronomical growth rates in revenues over the next 10 years at continued high margins – in the highly competitive automobile industry. It is hard to believe there are enough such optimists out there to maintain a price of $190.


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