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Tesla Is On a Roll

Yesterday Tesla (NYSE:TSLA) released its second quarter earnings reports and reported a non-GAAP income of $0.20 per share on revenues of 405 million dollars. As a result the stock reacted strongly, it was up 14.6 % at 10:08 today trading at 153.88 per share. In all, the stock is up over 350% year-to-date.

What would a value investor say about investing in Tesla? In my opinion, a value investor would not invest in Tesla for a couple of reasons. Here they are:

1. There is a lot of hype around the stock, as a result, many investors are throwing money into it and pushing the prices up.

2. The company has not produced any real profits as yet, $0.20 a share profit and trading at $154.56 per share gives it a PE of 772.8. The market is basing everything on the possibility that Tesla will do well in the future. Internet stock bubble anyone?

3. Is electric cars the future? This question is yet to be answered, there are way to produce electricity in a eco-friendly way but a lot of it is produced using Natural Gas and Coal. (See chart below) There might be bigger and better ideas in the future for more sustanable energy generation.

(Source: Wikipedia) 

4. Catering to a Premium audience who don’t really care about the price of gas.

Disclaimer: This is just my opinion.

Do you guys agree or have a different outlook for Tesla?