Tesla, Motorin, Microsoft discussed on CNBC's Fast Money
Dan wall street with the nasdaq closing at a new all-time high in our next guest says there are three high fliers in this record rally that could come crashing down. Classes in session with the dean thought motorin finance professor at nyu professor. Always good to see you. Good to be back. Let's let's start off with tesla and before you actually dive into your valuation analysis. I at what point did you think tesla was not overvalued. I started to get that of the way. I sold it. Give the stock split price. I sorted one twenty and you can see how much money left on the table. But at this point i don't even try to. Tesla just tried to reverse engineer from the market cap would has to happen for that stock price to be justified. Nears what i see. I see a company. That's being priced to deliver more than half a trillion dollars in revenues with margins like a software competent. Now that some believe that that can be pulled off. I just i'm skeptical. I mean to me that that if they can put it off. That is something that no company in history has ever done. So i'm just looking at the market gap and saying that is that is a huge mountain to climb to justify that market cap so when you said the software company some might argue might argue that the software the the intellectual property component of this company is much greater than being just a hardware company and auto company. The miles driven for the autonomous driving aspect of the company should be valued much greater. And so maybe you can get to the valuation there if you imputed a higher valuation for parts of the business. Can you get anywhere near where valued right now. See i think pieces and this is why. I think tesla you can get two. Different valuations are pieces of the story. Each piece is justifiable right. I mean there is a part of tesla that software for instance. A car goes with software. And they've talked about selling the software separately. The question is whether you can get margins. That are fifteen. Twenty twenty-five percent because it software margins with the revenues. That automobile company is beloved half a trillion dollars. So i think it's combining the different pieces of the story that makes me uncomfortable because those pieces usually don't go together. I mean think of microsoft twenty two percent margin per one hundred thirty billion dollars in revenues. I mean we're talking about tesla. Four times as much. Revenues and margins like microsoft. That's gonna be a tough tough tough hill decline. Let's move onto zoom professor. And i'm going to start off again that the same question. What point did you think zoom became overvalued early in the pandemic zoom in pellet onto me became the symbols of lazy investing lazy investing in the sense of. Hey i wanted to take advantage of pandemic let be picked the companies that i think would benefit and guess what people zoom did not what they were working on every day. Doom and the peleton is benefiting. I think that they've benefited. Don't get me wrong. I love zoom company. I think they've got the perfect platform for this virus. But at the same time. I think they i think the market cap is runway ahead of what the company can actually deliver in terms of revenues. Especially after we go back to work. I think some people would stay on zoom. I think the stories stood much bigger than it was before the virus head. But i can't see it being big enough to justify the prices were paying for this company denies. Well if it's tim thank you. What about the competitive landscape in that. Same space i mean. That's got to be part of the argument here. It's it's extremely competitive. Exactly and i think and it's got big players with deep pockets ready got cisco and microsoft neither player's going away so for me that the the problem zuma's is even if the market for online meetings. Teaching is much bigger. It's going to face a lot more competition going forward. And that's something that i don't think has been priced in right right now. You mentioned peleton. That's that's a third stock that you're saying could come crashing down and i'm wondering if there's an argument that this is a company that could actually become a software player with bigger margins as opposed to a company that sells bikes and treadmills. And i think that's going to happen. It's going to become a subscription model based company. I mean when i originally valley peleton in september two thousand and nineteen i valued as a luxury fitness equipment company with the subscription business on the side today. Values fellate honesty subscription business with fitness equipment. Business on the side. And i think that that it is going to succeed at that so when i say when when i say the values too high i it's still going to be much higher than it was before the virus. I just don't think you can justify the price prices. It invested the bang for the company because that's subscription business right now. The charging thirteen dollars a month. The subscription you pay sixteen dollars a month for netflix on a relative basis. That seems to be a pretty expensive subscription for fitness app. And i think that's something you're going to start to see. Come into pressure as well once the we stopped staying at home and we start looking at options professor. It has always great to get your insight. Thank you very much. The motrin of nyu Peleton and zoom guy examples of lazy investing degree. You understand what he's saying. That even backtrack a little bit on the lazy. So but i understand what he's saying like. Oh stay at home where people do the ride. Their bison zoom videos by the stock sort of peter lynch and twenty twenty. I get it but my pushback would be. I would submitted this. Price of zoom is seventy five percent of what they're doing now in two thousand twenty one now. The stock is still pretty reasonable. I think and that's i think the world has changed fundamentally and although peleton if this has just lasted a month. I would've agreed with them. You know we're nine ten months into this. I think people have come attached to their peleton. I know i have. And i know you have and i think if k fine oh nine were here. She'd say the same thing. I love their bikes. And again i ride with certain people and i'm steadfast in that i'm going to stay true to my peleton routes melissa ride with people. Oh you mean. The instructors not derived with karen. We don't write together. that's for sure. The scottish not right together struck grass just quickly. Which is your your pick. So when you look at the overvaluation i think that zoom is over evaluated and if you look at it people are going to get back to work and then the people that don't go back to work that are sitting home. They're probably going to zoom a lot less. 'cause there's going to be people in the office office space and they're not going to be as relevant anymore so zoom and peleton just think about how much money wasn't spent on vacations. That people bought the bike. It's an expensive bike. There's competition now and they once people start to take vacations wants people start to get out of their house and do other opportunities for them to spend their money. They're not going to buy the by guy. Loves the bike. It's a great product. Colt like everyone loves the product. But i think you're gonna wind up. Seeing sales actually decelerate in a significant fashion moving forward. all right speaking evaluations. Take a look at some of the stocks hitting all time highs today up next. We'll find out if the traders are buying in our cashing.