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Gene Munster Talks Tesla's Opportunity, Apple's Valuation, Netflix's Headwinds

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Gene Munster Talks Tesla's Opportunity, Apple's Valuation, Netflix's Headwinds

Loup Ventures founder Gene Munster recently joined PreMarket Prep and co-host Joel Elconin for a live version of the "Frontier Tech With Gene Munster" podcast.

Munster discussed the latest on tech stocks including Tesla, Inc. (NASDAQ: TSLA), Apple, Inc. (NASDAQ: AAPL) and Netflix, Inc. (NASDAQ: NFLX).

Tesla’s Run

Some analysts have doubled down on their bearish calls on Tesla after the stock soared 96.7% in the past six months to new all-time highs, but Munster said long-term investors have nothing to be afraid of at these levels.

“I think that this has measurable upside. It’s hard to put a price tag on a company that really doesn’t make a lot of money. This is a similar problem that Amazon had for a long time, as we all know,” he told Benzinga. 

Despite his bullish outlook for Tesla, Munster said his goal is to remain pragmatic and avoid joining the group of “fanboy” Tesla permabulls.

Yet the fact that Tesla maintained 75% market share in the U.S. electric vehicle market in 2019 is extremely impressive, he said. 

“There is this headstart that Tesla has gotten [in electrification] that is going to continue to move the stock higher.”

Upside For Apple

After a huge year in 2019, Munster said Apple still has long-term upside in 2020 and beyond.

“I think this idea of a consumer staple tech company should garner a higher multiple. So ultimately I think the stock can go higher. I think it’s a $350 or $400 stock,” the Loup Ventures founder said. 

Apple should be trading in-line with the earnings multiple of Facebook, Inc. (NASDAQ: FB), which is currently trading at around 33 times earnings compared to just 24 times for Apple, he said. 

Netflix Headwinds

While Tesla and Apple are set up well into 2020 and beyond, Munster said Netflix may be challenged down the road.

“I believe that more competition is going to yield slower sub growth,” he said.

Munster said investors won’t see that growth slowing in the fourth quarter, and Netflix may even have a strong 2020.

"As soon as consumers need to really pay for these other streaming services, so when Apple goes from free to pay in 2021, Disney maybe raises its prices, that’s when things get more difficult [for Netflix]." 

Quick Takes On Facebook, Amazon, More 

Munster also gave his quick take on other popular stocks:

  • Facebook: “Advertisers just don’t have a lot of places to go that can give them what Facebook can give them. There’s only one other place, which is Google.”
  • Amazon.com, Inc. (NASDAQ: AMZN): “I think that fundamentals will be good enough to keep it here where it is or moving higher, but I think there’s better performance in other companies.”
  • Alphabet, Inc. (NASDAQ: GOOG) (NASDAQ: GOOGL): “Google is a great story to own longer-term. Put it in a similar camp to Amazon in that I think your money is better placed in other companies like Apple or Tesla.”
  • Livent Corp (NYSE: LTHM): “I do think this is one to own if you share my view that electrification is the future of automotive.”
  • Jumia Technologies AG - ADR (NYSE: JMIA): “If you believe in e-commerce long-term and you believe in the continent of Africa, I realize it’s way outside the typical strike zone, but it has popped up on my radar.”

Related Links:

Gene Munster Talks Tesla's Energy Business, Apple's Trade War Risk And Facebook Libra

2 Areas Where Tesla's Technology Is In A League Of Its Own, According To Gene Munster

Loup Ventures founder Gene Munster, left, and PreMarket Prep co-host Joel Elconin. Benzinga file photo by Dustin Blitchok.

Latest Ratings for AAPL

DateFirmActionFromTo
Oct 2020Raymond JamesMaintainsOutperform
Oct 2020Piper SandlerMaintainsOverweight
Oct 2020Credit SuisseMaintainsNeutral

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