Prominent investment analyst Gary Black of The Future Fund LLC has sparked a market discussion with a recent analysis comparing Tesla Inc. (NASDAQ:TSLA) and NVIDIA Corp. (NASDAQ:NVDA), highlighting critical differences in their earnings trajectory and valuation metrics.
What Happened: In a post on X, Black explained why Nvidia remains the fund's top position while Tesla ranks fifth, focusing on the divergent paths of earnings estimates for both companies. He pointed out that Wall Street continues to raise earnings estimates for Nvidia while simultaneously reducing estimates for Tesla.
The analysis centers on the price-to-earnings-growth ratio, a key metric for investors. Black noted that Nvidia currently trades at 1.6x PEG, with a calendar year 2025 price-to-earnings ratio of 32x and a projected long-term earnings growth of 20%.
In contrast, Tesla stands at 3.2x PEG, with a calendar year 2025 price-to-earnings ratio of 102x and a projected long-term earnings growth of 32%.
The price-to-earnings-growth ratio is a key valuation metric that helps investors understand a stock's true value by comparing its price-to-earnings (P/E) ratio to its expected earnings growth rate.
A lower PEG ratio, typically below 1.0, suggests a stock may be undervalued, indicating the company's stock price is relatively cheap compared to its potential future earnings growth.
For those wondering why $NVDA is our #1 position and $TSLA #5 – look no further than these two respective earnings revisions charts. WS keeps raising NVDA's earnings ests, and reducing TSLA's earnings estimates. On PEG, NVDA is at 1.6x PEG (CY'25 P/E = 32x vs 20% long-term eps... pic.twitter.com/Wt1E4wUYEJ
— Gary Black (@garyblack00) November 27, 2024
Why It Matters: These metrics underscore the fund's investment strategy, which Black has consistently defended as disciplined and data-driven. His recent posts have emphasized the importance of professional investment principles, particularly the strategy of buying low and selling high.
The Future Fund's performance demonstrates this approach, with the Future Fund Active ETF (NYSE:FFND) delivering a 28.30% year-to-date return that outpaces the SPDR S&P 500 ETF Trust (NYSE:SPY). Black's Tesla position has been particularly noteworthy, with the fund's average purchase price at $162 and average selling price at $252.
The market performance further illustrates the point: while Tesla has seen a 34% year-to-date gain, Nvidia has surged 180.96%, according to data from Benzinga Pro.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
In contrast, Tesla stands at 3.2x PEG, with a calendar year 2025 price-to-earnings ratio of 102x and a projected long-term earnings growth of 32%.
相比之下，特斯拉的市PE增長比爲3.2倍，2025年日曆年份的市盈率爲102倍，預計長期盈利增長率爲32%。