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According to BusinessInsider.com, Tesla stock is still overpriced despite a 40% reduction due to the coronavirus.

Questions:

  1. According to Sacconaghi, why is Tesla stock so vulnerable?
  2. What is a realistic baseline valuation for the stock?
  3. Explain Saconaghi’s statement: ” Tesla stock remains high enough that it takes very aggressive assumptions on its future auto business to justify its valuation on a DCF basis.”

Source:

Reinicke, C. (2020). One expert says Tesla’s stock is still expensive, despite plummeting 40% amid the coronoavirus market. Business Insider.com, March 16 (Retrievable online at https://markets.businessinsider.com/news/stocks/tesla-stock-price-too-high-amid-coronavirus-selloff-analyst-says-2020-3-1029001141)