(Bloomberg) -- Tesla Inc.'s cars may run on batteries, but its stock price is fueled by “the power of the narrative,” according to an analyst with a sell rating on the shares.
In a report Thursday, Joe Spak of RBC Capital Markets marveled at how the electric-car maker has managed to add about $48 billion of market capitalization by ginning up excitement about its quarterly vehicle deliveries.
On June 24, Tesla's investor-relations team shared a collection of delivery estimates that found analysts on average were expecting the company to hand over about 70,300 vehicles to customers. The market recognized this as a low bar, triggering gains that were further supported by two bullish emails Chief Executive Officer Elon Musk sent to employees that leaked to several media outlets.
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By the time Tesla reported 90,650 deliveries on Thursday, its shares had surged about 27% over the course of seven trading days, outpacing the S&P 500's roughly 3% gain. The company added more market cap in that span than General Motors Co. or Ford Motor Co.'s entire valuations.
“That, is remarkable,” Spak wrote. He estimates Tesla topped consensus delivery estimates by the equivalent of about $1 billion of revenue, meaning investors are valuing the beat at about 47.5 times sales.
Earlier: Tesla delivery beat sends shares surging
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