Tesla Motors Inc. (NASDAQ:TSLA) might join Netflix, Inc. (NASDAQ:NFLX) and Amazon.com, Inc. (NASDAQ:AMZN) on the downward movement in the market after reporting earnings on November 5 according to CNBC’s Dan Nathan. CEO, Elon Musk sentiments that the company might be overvalued continues to be a point of concern with analysts, especially on the fact that valuation aspects might have been disregarded.
Netflix, Inc. (NASDAQ:NFLX) continues to be severely punished in the market after missing estimates in its recent quarterly filing. An increase in monthly subscription charges saw the number of subscription decline considerably affecting the company’s revenues.
“These are kind of self-inflicted wounds by the company in Amazon and also in Netflix, but it got investors to wake up to certain issues about their financials,” said Mr. Nathan
The last time Netflix, Inc. (NASDAQ:NFLX) increased its prices, the stock sunk by huge margins until Carl Icahn got involved, and the stock found its way back. Netflix is to face immense competition going forward especially after HBO announced plans to start offering video content directly to customers.
Despite underperforming in the recent past, CNBC’s Michael Khouw remains bullish about Tesla Motors Inc. (NASDAQ:TSLA)’s prospects going forward. Khouw believes that Tesla will perform better in the long-term based on the fact that its vehicles are enjoying impressive demand in terms of orders from customers.
“Tesla Motors Inc. (NASDAQ:TSLA) has a little bit of capacity constrained it is not that they have demand problems for their product. You are expecting it to grow to a fairly ambitious valuation here, and it is hard to see how quickly you can do that. This is a capital intensive business you have to build plants, “said Khouw.
Tesla Motors Inc. (NASDAQ:TSLA)’s main challenge in terms of competition will come when other auto companies unveil their own electric cars into the market.
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