Valuing Elon Musk-run companies has always been a conundrum given the supposed “Musk premium.” For instance, Tesla's (TSLA) market cap is around $1.5 trillion, more than the combined market cap of all leading legacy automakers. To be fair, Tesla is not a pure-play automaker and has significant tech capabilities. Still, many find it difficult to digest the stock's forward price-to-earnings (P/E) multiple of over 450x.
But then, Tesla has never been about short-term earnings and has been a play on what the company can achieve in the long run. SpaceX (SPCX), which listed earlier this year, is no different. Many find it grossly overvalued at an over $2 trillion market cap and an even more ludicrous P/E than Tesla, but ARK Invest's Cathie Wood—arguably among the most, if not the most, bullish observers on Musk-led names—believes the company’s IPO valuation of around $1.75 trillion would look like a “deep value opportunity” in hindsight.
