00:00 Brian Sozzi
All right, now let’s turn to my stock of the day. That is drum roll please, Tesla. The company rolled out its much anticipated robotaxi in Austin over the weekend, but only for a select few passengers, a who’s who of Tesla influencers. Of course, the taxis drove in a small portion of the Texas city with a Tesla employee in the front seat for safety. Jumping into the Yahoo Finance platform, you can see this hype test comes during a lot of hope for Tesla’s earnings potential. Uh the company has a trailing price to earnings multiple of 184 times. You’re actually seeing that correctly, guys, and a forward PE of 166 times. For perspective, the S&P 500 is only at 21 times. Still with me is my round table of pros, Chad Morganlander, senior portfolio manager at Washington Crossing Advisors, Tim Urbanowitz, chief investment strategist at Innovator ETFs, and of course, Yahoo Finance’s very own Julie Hyman. Julie, I know you’re a big Tesla fan. So I think you’re going to set the tone for this one. Robo taxis floating around streets, driving by themselves in Austin. I’m trying to figure out when this actually starts making money for Tesla because you saw the PE multiples I just mentioned here at the top. This stock continues to be priced for perfection at a time where earnings estimates for Tesla continue to tank.
02:44 Julie Hyman
Earnings, if you’re a Tesla bull, you don’t care about numbers, right? I mean, you care about vibes. You care about the future. You care about the trillion dollar autonomous opportunity that Dan Ives, whose pictures we’re showing, um, is always talking about here and other bulls like Kathy Wood over at Arc. Um, but you really, you, um, sort of put, put your finger on it when you said it’s sort of influencers who are invited to this thing. You know, Jordan Klein, who’s a desk analyst over at Mizuho, in his morning note, he said, first of all, he said this seems like a yawn the whole event, but he said Tesla controlled the event and test a lot, hand-picking many of the test riders knowing they’re are big, they are big Tesla supporters. Like what I, what I would like to see is someone who is not a huge Tesla bull getting one of these cars and give me a review.
04:37 Brian Sozzi
Chad, I didn’t see you out there in Tesla land driving these taxis around. I love what you said about your holding of Lockheed Martin at the top of the show, 15 times forward earnings. What do you think when you see Tesla getting driverless cars out there, but the forward PE is 166 times, has to drive you crazy, right?
05:08 Chad Morganlander
Brian, there’s a lot of jazz hands going on here. It’s 10 times revenue. Uh you have a multiple that’s insane. Um and then there’s a, there’s another company, a little company called Alphabet, which for full disclosure, I own in personally and Washington Crossing owns. And that’s trading at 16 times next year multiple. And they have something called Waymo. So Waymo has been proven, it’s working in many cities. And we believe that this whole robotaxi idea that you’re going to let your car go out in the middle of the night and pick up drunk people, um, is perhaps, you know, just to make money is perhaps a little bit foolhardy. So we’d be more mindful about owning Tesla, we would pick Alphabet instead.
06:50 Brian Sozzi
Chad, would you actually get in one of these to drive? Would you take a ride in this?
07:00 Chad Morganlander
I would definitely take a, take a, take a ride in it. And and you know what, this technology is wonderful. Don’t get me wrong. Um, this is perhaps going to work, but Waymo is going, is, is light years ahead of them. They’re perhaps going to just sell their software package to other companies like General Motors, Toyota, and whatnot. And they’re going to go the route of Microsoft when it comes to the software distribution. They have yet to announce that, but it’s pretty obvious what, what their game plan is.
08:00 Brian Sozzi
Tim, I know you’re ditching all your cars and you’re going to be a robotaxi fan. I just see, I get that vibe. You know, I just get that vibe.
08:12 Tim Urbanowitz
Yeah, it’s, it’s an interesting one. I, I kind of see both sides here. I hope Julie doesn’t kill me, but uh, you know, I’m kind of in the same boat there. You look at that multiple, it’s hard to imagine them growing into that uh, in, in any short period of time. And Brian, as with anything that we’ve seen from Tesla, it always takes longer than Elon thinks and, and investors think. So we have to be uh, really conscious of that. But I do think the growth story or the, the innovation story is there, and that’s going to drive hype, that’s going to drive the stock price in the short term. A lot of what our clients are doing is using a risk manage approach to get exposure to stocks like Tesla and, and the Nasdaq 100 as a whole, with strategies like QFLR where they’re putting a, a floor, a 10% floor against losses on their Nasdaq exposure, but they’re still maintaining that upside. You know, if, if this hype continues to drive these stocks like Tesla higher, they’re participating, but they also have that risk management in place. You know, with that multiple, that stock could fall pretty hard and other stocks there, there as well. So we, we think that’s a prudent approach right now.
09:50 Julie Hyman
Hey, hey, hey, hey, don’t get me wrong. I’d love to ride in one of these things, right? Or give like I’m psyched that Waymo is coming to New York City. Bring me the Tesla robotaxi, but you know, when you’re coming out from an investment perspective, you have to separate what you think is cool and what you think is a good investment.
10:22 Brian Sozzi
All right, let’s leave the panel there. Julie Hyman, I’ll see you back at your desk. Chad Morganlander, good to see you. Tim Urbanowitz, appreciate guys coming on.
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