Yahoo Finance Live hosts Julie Hyman and Brian Sozzi examine Tesla CEO Elon Musk selling off an additional $1 billion in company stock, in addition to tracking the EV developer's growth over the past five years.
JULIE HYMAN: Let's talk about another company that has lost some momentum here as have headed into the waning days of 2021-- and I'm talking about Tesla, because the stock is down about 11.5% from its record close on November 4th. It's still up more than 60% year to date, though. And Elon Musk just keeps on selling shares. It's not clear if he's in fact done now. We keep thinking he's done as he gets closer to the 10% of shares that he said he was going to sell, all of this having to do with covering his taxes.
But, Soz, it's interesting here. You could say, well, the shares have been falling as he's been selling, but as we've just been talking about, a lot of the hot momentum stocks have been losing steam around the same time. So you could kind of-- six of one, half a dozen of the other in terms of what's been going on with Tesla.
BRIAN SOZZI: Julie, he may not even know if he's done selling his stock. Let's get real here. But look, I do think-- and I will continue to say this-- that at some point, you will start to focus, or investors will start to focus, on the fundamental potential of Tesla over the next few years. And I've just been, all morning long, digging through this new note out of Deutsche Bank.
Emmanuel Rozner is the analyst there on Tesla, saying, quote, "All in, with considerable volume cost and operating leverage momentum, we continue to see large upside to 2022 consensus expectations on Tesla." And he's making the case, Rozner, that the demand continues to outstrip the supply-- not just for Tesla products, but electric vehicles at large. And when you see that dynamic at play, you have to wonder, do those earnings estimates on Tesla have to pick up in a big way next year? And if they do, what does that mean for the stock price? Theoretically , it would mean a higher stock price.
JULIE HYMAN: Well we're just showing that chart that I wanted to talk about. And as I was seeing the stock and its gains this year, I thought, well, when's the last time that we have seen Tesla have a 60% gain in a year? Well, last year it was up 787%. I'd forgotten.
BRIAN SOZZI: Nice chart. I like that.
JULIE HYMAN: It's risen on an annual basis. It has risen every year since it went public. And its smallest gain, as you can see in 2018 with 9.2%. Its largest gain was in 2020. But 2013 stands out-- 379% almost. It's kind of incredible the trip that this stock has taken-- that it hasn't had a down year.
BRIAN SOZZI: It just underscores that Tesla remains just this cult-favorite stock, Julie. But next year, we were just talking about Coinbase and Robinhood next year being key years-- it will be a key year for Tesla. High expectations coming into the year as I laid out, but next year, I would argue, is really the first year where we're going to get some legitimate competitors in the space. And this has been a thing that all the Tesla bears have been talking about in recent years. Oh, we're going to get this wave of competition. Well next year is the year.
You have Ford already saying it's completely sold out for the first run of its production for its electric F-150 . You have GM out there selling over $100,000 Hummer trucks-- electric Hummers. And a lot of other companies coming out with a lot of other models. At some point Rivian will, I suspect, start to pick up its deliveries and start to meet those estimates. But Tesla-- the competition is coming for it, and next year is really, I would say, the first legitimate year.
JULIE HYMAN: And I should point out, it's not even just the bears who were citing the competition, right. Even Dan Ives of Wedbush, who we're going to speak to later in the program, who is definitely a bull on Tesla, acknowledges the competition is going to be rising. Tesla is the only game in town. Yes, of course there are other vehicle makers that are making electric vehicles. But in terms of this pure play, and in terms of the growth that we have seen as we've just illustrated, no one has really come close to Tesla. That may change, but we'll see, what does a more mature Tesla look like? That should be a really fascinating story to watch. And again, we're going to talk to Dan a little bit later in the show.