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Old 02-22-2019, 07:12 PM   #67 (permalink)
RedDevil
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Hah no. It just depends on what the company is doing.

These numbers you represent apply to companies that operate in a stable market, keeping a constant market share. Those have low investment (why would they, nothing changes much) and high yield. The stocks won't grow much in value, instead they pay dividend.

Opposed to that are growth stocks. Those companies invest their earnings in growth rather than payout. See https://www.commsec.com.au/support/l...th-shares.html.

TSLA is a growth stock to the extreme. Investors expect Tesla will continue to grow to maybe 10 times its current size in 5 years, just like it did in the past 5 years.

Now that's a gamble. But there's a more reliable metric: revenue.
As pointed out here revenue tells more about the value of a company than profit does, provided it shows a healthy growth.
Tesla's revenue over 2018 was about $21 billion; that's more than a third of its total stock value.

The revenue is building up quickly too, more than half a billion per week now, so it could earn its value within 2 years.
With new factories under construction and new products down the line it will keep growing in the foreseeable future. If it doubles again the yearly revenue will beat its current stock value. At that point the stocks will start to rise.
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