1-800-241-9772
By Robert S. Bacarella | February 3, 2020

Tesla is a controversial stock, as reflected by the range of Wall Street analysts’ price targets—from $190 to over $800. This valuation range is about twice that of the average stock in the Dow Jones Industrial Average.

Some analysts believe that Tesla’s bull run is just beginning, while others think it is about to unravel… and opinions are strong on both sides.

The Tesla Bulls

Tesla bulls believe that the company is not just an auto manufacturer but also a leading-edge technology company. It is led by the iconic CEO Elon Musk, who is thought to be following in the footsteps of Apple’s Steve Jobs or Amazon’s Jeff Bezos. Tesla has instant name recognition…when a consumer thinks about an electric vehicle, they think “Tesla,” not a car manufactured by Ford or GM. Tesla’s valuation reflects the company’s first-mover advantage in the electric vehicle market—uniquely combines style, technology and performance.

Also, to Tesla bulls, raw size doesn’t matter, as Tesla’s total car sales in 2019 represent less than 1% of total worldwide auto sales. Proponents see this as a huge opportunity for future growth. As a result, Tesla’s stock market value ($88 billion) has now eclipsed the combined market values of GM ($49 billion) and Ford ($37 billion) of $86 billion.

The Tesla Bears

Tesla bears believe that bullish investors are looking at the company through rose-colored glasses. They are ignoring questionable consumer demand, the company’s high debt level, low profit margins that restrict profitability, poor cash flow and increased competition coming into the market.

The bears question Elon Musk’s management style. Although respected by employees, Musk is cited as not easy to work for, a micromanager who is somewhat impulsive. He does not adhere to a CEO template. He doesn’t have a desk at the Tesla factory, but rather moves to the area where the biggest problems are. He believes that one should lead from the front lines, as a leader behind the lines is going to lose.

Is Tesla a flower or weed?

To see Tesla as a flower, you must believe in Elon Musk’s master plan to produce more affordable, mass-market electric cars at a rapid clip. Tesla’s new factory in China is a big step toward addressing the mass market, creating the potential to deliver a significant number of vehicles sooner than expected. Secondly, you must accept the fact that the stock is not trading on a multiple of today’s or tomorrow’s earnings; it is trading on a multiple of Elon Musk’s dreams.

Tesla, no doubt, has been a “flower” in many holders’ portfolios. However, it does require a lot of watering—close attention—as distinguishing which dreams will turn into realities is extremely difficult. It currently is not a “weed” to be pulled, but as conditions change be prepared to react accordingly.

Investment portfolio

We make it simple for everyone to invest easily and sensibly.

All too often, people over-complicate the investment process. Our goal is to break down investment myths and concepts to help individuals make sound long-term investment decisions. Your financial future starts here.

Low Minimums

Investing doesn’t have to feel out of reach for you financially. At Monetta, you can start with as little as $100 with an automatic investment plan of $25 or more per month.

Learn More

Built-In Diversification

The Monetta Core Growth Fund consists of a highly diversified “passive” component together with an actively managed component that consists largely of companies that are household names. The Monetta Fund is a classic “stock-picking” fund focused on large-cap growth companies.

Learn More

Commitment to Education

The earlier you start an investment portfolio, the longer your money can work for you. It’s time in the market, not timing the market, that matters. We provide ideas and resources for people of all ages to get started and keep making progress.

Learn More

Fund Performance

Monetta Money Talk Newsletter

The Monetta Money Talk newsletter is a fantastic resource for continued financial education and resources. Sign up today to receive our quarterly newsletter!
The Funds’ investment objectives, risks, charges and expenses must be considered carefully before investing. The summary and statutory prospectuses contain this and other important information about the investment company, and may be obtained by calling 1-866-964-4683, or visiting www.monetta.com. Read it carefully before investing.

Opinions expressed are subject to change at any time, are not guaranteed, and should not be considered investment advice.

Diversification does not assure a profit nor protect against loss in a declining market. Periodic investment plans do not assure a profit and do not protect against loss in a declining market.

All investments, including those in mutual funds, have risks and principal loss is possible.  The Funds may make short-term investments, without limitation, for defensive purposes, which investments may provide lower returns than other types of investments. The portion of the Monetta Core Growth Fund that invests in underlying ETF’s that track the Index will be subject to certain risks which are unique to tracking the Index. By investing in ETF’s, you will indirectly bear your share of any fees and expenses charged by the underlying funds, in addition to indirectly bearing the principal risks of the funds. Growth-oriented funds may under-perform when growth stocks are out of favor. Please refer to the prospectus for further details.

Click here for the Monetta Fund Holdings
Click here for the Monetta Core Growth Fund Holdings
Fund holdings are subject to change and are not recommendations to buy or sell any security.

The price-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings.

Past performance does not guarantee future results.

FUND DISTRIBUTOR:  Quasar Distributors, LLC.