Shares of Tesla Motors (TSLA) have soared more than 335% this year alone as exuberance for the company has risen to perhaps an all time high. In the Bay Area where I spend my summers, I noticed a sharp increase in the number of Teslas on the road this year. Just a few months ago, I could honestly say the car was rarely seen, however, these days I spot at least one a day.
I'm not going to try and make a prediction on whether the stock will go up or down, I will leave that to the traders, and to be honest, I doubt anyone really knows where its heading from here. But instead, I would like to offer a unique insight into the strength of the brand. At this point, as valuations have risen to meteoric levels, the company itself could actually perform very well over the next few years while the stock do just the opposite. We are going look at the search interest for the company over the last few years using search engine data provided by Google (GOOG).
Google gives users the ability to instantly find the popularity of certain keywords over set periods of time, all the way back to 2004. For the first search, I wanted to look the keyword "Tesla" on Google:
Google is reporting that during the month of August, a score of 100 will be reported, or the highest all time level of interest for the company. I highly doubt users are searching for Nikola Tesla, the guys lost quite a bit of relevance since 1943. To be more politically correct, let's take a look at "Tesla Motors" on Google:
While interest for this keyword may not be at all time highs, a score of 69 is estimated in August representing the highest level of interest since July 2006. Let us now get a little more specific with our searches. The company's Model S has received heavy praise so far this year. A score of 99 out 100, a 5 star safety rating, and the feel good environmental buzz. It is hard to argue the product isn't anything but spectacular. Below is the search interest for the keyword "Tesla Model S" on Google:
The data for this keyword is limited, we can only go back to 2009 for comparisons. None the less the trajectory of interest speaks for itself and confirms what I've been seeing first hand. The amount of interest for the company's flagship car sits just below all time highs, hopefully an increasing number of consumers are looking into the brand. On the East Coast where I attend college, I have found of number of people haven't even heard of the brand yet. Lastly, let's take a look at the search interest for the company's stock, which itself sits just below all time highs. Below is the search interest for the keyword "TSLA" on Google:
The above data shows the search interest since 2010, the year the company hit the public markets. Same story, all time high search interest in August. However, the level of exuberance for the stock is somewhat concerning. I have been burned in the past playing these high growth names, and seemingly every time it was a result of the media hype.
I wanted to confirm with actual data what I was seeing firsthand all summer. The interest for Tesla seems to be moving upward, and in most cases, search interest for relevant keywords sits at all time highs. Trading at nearly 900 times forward earnings, I cannot fathom buying the stock here. It doesn't fit my personal investment profile, however, if your the gambling type, I suggest keeping it in the speculative portion of your portfolio. I doubt anyone on the street can predict where shares are going, so be wary of anyone claiming they are certain. While I cannot give you a direct correlation between revenues and interest at this time, I'm working on it and will hopefully be able to answer this question soon. In the meantime I feel its logical to assume demand for the company's cars is highly correlated to interest for the brand.
If you would like to create these graphs on your own you may do so here! Thanks Google, we appreciate all the free tools you give us!
Disclaimer: The author does own multiple domain names related to the Tesla brand.