It is Tesla’s world; we just live in it.
The company’s inclusion in the S&P 500 index is all but a certainty, according to some financial analysts.
Daniel Ives of Wedbush Securities stated that the inclusion is “already considered a fait accompli among the bulls”.
Tesla is set to report its 2020 Q2 earnings this upcoming Wednesday.
Surefire profitable Quarter
This massive rally of Tesla’s stock (NASDAQ:TSLA) has boosted the company’s valuation to approximately $325 billion.
This confirms that Tesla has now a higher valuation than Toyota, Volkswagen, and Honda put together!
Another factor that further solidifies that theory is the fact that the company already reported that it has sold 90,650 vehicles and manufactured 82,000 during the second quarter.
As far as this output is concerned, it has beat Wall Street’s expectations, which estimated Tesla’s deliveries at 60,000 to 70,000 vehicles throughout Q2.
What is the S&P 500
According to an article published on TheBalance.com, the S&P 500 is a, quote-unquote, “stock market index that tracks the stocks of 500 large-cap U.S. companies”.
The article also states that the S&P index is the “benchmark of the overall market, to which all other investments are compared”.
A committee selects each of the S&P 500 corporations based on their size, their liquidity, and the industry in which each company operates under.
As of February 2020, the total market cap of the S&P 500 is estimated to be at $24.4 trillion.
How can a company qualify for the S&P 500 index?
There are clear-cut regulations that apply to each company vying for a spot within the index.
- It must be headquartered in the United States.
- Has an unadjusted market cap of at least $8.2 billion.
- At least 50% of the company’s stock must be in circulation.
- The company’s stock price must be at least $1 per share.
- It must file a 10-K annual report. A 10-K report is a report filed annually by a publicly-traded company about its financial performance and is required by the U.S. Securities and Exchange Commission (SEC).
- At least 50% of its fixed assets and revenues must be in the United States.
- A company must have at least four consecutive quarters of positive earnings.
Where does Tesla stand?
Tesla has posted 3 consecutive positive quarterly earnings: $143 million on September 30, 2019, $105 million on December 31, 2019, and $16 million on March 31, 2020.
Since Tesla is about to report a positive earning quarter, the company is locked in for a sport in the S&P 500, because they have all the remaining conditions filled.
In conclusion, we already mentioned throughout our previous Tesla-related articles that 2020 is the company’s year. This latest piece of news further cements that belief!