A few years ago, did you believe it was possible for Tesla Inc. TSLA, +0.95% to make and sell half a million cars a year? Well, the company made 145,036 electric vehicles during the third quarter and delivered 139,593.
There’s no question that EVs will continue to storm the auto market. General Motors Co. GM, +0.70% plans to have 30 fully electric models available by 2025, with 40% of its vehicles available in the U.S. being EVs by the end of that year. Shares of Tesla are up 600% this year. This means the stock has gotten way ahead of analysts’ estimates and price targets. Among 36 sell-side analysts polled by FactSet, only 13 rate the shares “buy” or the equivalent. The consensus price target of $396.40 is 32% below the stock’s closing price of $584.76 on Dec. 1. The shares trade for 162 times the consensus earnings estimate for the next 12 months.
Getting back to GM, the shares were up 22% year-to-date through Dec. 2, but were trading for only 6.7 times the consensus earnings estimate for the next 12 months. That is a very low P/E ratio for a company with strong cash flow making such a deep commitment to a rapidly growing high-tech industry. Among the 17 analysts polled by FactSet who cover GM, 14 rate the shares a buy or the equivalent, and the consensus price target implies 10% upside over the next 12 months.