Noel Randewich
(Reuters) – Tesla (NASDAQ:) shareholders approved CEO Elon Musk’s $56 billion pay package in what was seen as an endorsement of his leadership, but the electric vehicle maker’s shares remain highly valued even after years of weak shares.
Tesla shareholders at Tesla’s annual general meeting on Thursday reapproved Musk’s record 2018 compensation, which supporters say is needed to keep the billionaire focused on the car company.
While Musk still faces a long legal battle to convince a Delaware judge who invalidated the January pay package, Tesla shares rose nearly 3% on Thursday ahead of the meeting after Musk posted on his social media site X that he had received shareholder approval.
Even after Thursday’s rally, Tesla shares are down 27% this year and its market value has more than halved to $582 billion from its November 2021 high as Tesla faces stiff competition in China from BYD (SZ:) and other electric vehicle makers selling less. -expensive cars.
Tesla shares received a much-needed boost after Musk said on April 23 that Tesla would release more affordable new models in 2025. Its quarterly revenue fell for the first time since 2020, when the COVID-19 pandemic hampered production and supplies.
Meanwhile, other Wall Street tech heavyweights rose sharply. Shares of Amazon (NASDAQ:) and Alphabet (NASDAQ:) are up more than 20% in 2024, Meta Platforms (NASDAQ:) are up more than 40%, and Nvidia (NASDAQ:) shares are up nearly threefold. Tesla’s market value has also surpassed Eli Lilly (NYSE:) and Broadcom (NASDAQ:).
Analyst optimism about Tesla has dropped sharply. The average analyst price target for Tesla is now $181, down from $226 at the start of 2024 and just slightly below Thursday’s closing price of $182.47, according to LSEG.
Musk has told investors they should view Tesla as an “artificial intelligence robot company” rather than a car maker, and its shares have long traded at earnings multiples higher than many tech companies.
Tesla shares are trading at about 61 times expected earnings, up from about 22 in January, although that’s well below the price-to-earnings ratio of 150 reached in November 2021.
By comparison, General Motors (NYSE:) and Ford Motor (NYSE:) trade at forward PE multiples of 5 and 6, respectively. Toyota According to LSEG, NYSE shares: Trade at 9 times expected earnings.
Another reflection of Tesla’s high valuation of its business is that Tesla’s market value is equivalent to nearly $6 million per employee, slightly lower than two years ago but still nearly 20 times higher than GM and Ford each of which has about $300,000 on the market. cost per employee.
Unlike GM and Ford, some Tesla employees work in service centers around the world, equivalent to GM and Ford’s independent dealer networks.
Even after its decline, Tesla remains the world’s most valuable automaker, far ahead of Toyota, the world’s largest automaker by sales.
Toyota’s market value is about $270 billion. In 2020, Tesla’s rising stock made the company more valuable than the combined value of Toyota, Volkswagen (ETR:), Hyundai (OTC:), GM, Ford and BMW (ETR:).
In January, Tesla’s share price plunge sent its value falling slightly below the combined value of other major automakers.