Even Elon Musk Appears to Think Tesla Stock Has Gotten Ahead of Itself

As most know, the stock of Tesla (NASDAQ: TSLA) has been on a rocket ship move upward over the past six months, boosted by much-better-than-expected profitability metrics posted in the company's third- and fourth-quarter earnings reports.

While Tesla still hasn't posted a full year of profitability on a generally accepted accounting principles (GAAP) basis, 2019 ended up a very positive year on free cash flow, which surged to roughly $1.1 billion, up from a slight negative free cash flow in 2018. That's the result of the company miraculously reducing operating expenses and capital expenditures, even while growing sales.

In addition, Tesla seems to have put questions about liquidity to rest. By the end of 2019, the company had $6.5 billion in cash and cash equivalents versus $13.4 billion in debt. That is not that much net debt, considering a lot of that debt is either convertible to equity and holds low interest rates or is nonrecourse to the whole company. It's especially manageable for a growing, cash-flow-positive company.

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Source Fool.com