Porsche IPO delayed due to Valuation

[DCYL725]

https://www.carscoops.com/2022/07/p...ificantly-cut-valuation-expectations-for-ipo/

Seeing at 100bn Euro is just absurd. VW is only 80-something billion euro. I think it will land at around 50bn level. The comparables in legacy ICE car businesses are just too plain-vanilla and straightforward to value, unless there's a large premium on EV's. The issue here is EV's will cannibalize ICE's within the same line-up so net-net there's no new incremental growth. Hard to push the tech angle here given how behind Porsche is in the software department.

What do you guys think of the IPO and long-term investment opportunity? Any investment professionals on here care to chime in? I hope the IPO gets through so Porsche can push their EV projects faster, especially the increased Porsche-only charging sites.

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[RAHRCR]

https://www.carscoops.com/2022/07/p...ificantly-cut-valuation-expectations-for-ipo/

Seeing at 100bn Euro is just absurd. VW is only 80-something billion euro. I think it will land at around 50bn level. The comparables in legacy ICE car businesses are just too plain-vanilla and straightforward to value, unless there's a large premium on EV's. The issue here is EV's will cannibalize ICE's within the same line-up so net-net there's no new incremental growth. Hard to push the tech angle here given how behind Porsche is in the software department.

What do you guys think of the IPO and long-term investment opportunity? Any investment professionals on here care to chime in? I hope the IPO gets through so Porsche can push their EV projects faster, especially the increased Porsche-only charging sites.

I don’t understand the strategy. A Porsche is a fancy Audi. An Audi is a fancy VW. They share a lot. It is unclear to me as to how Porsche (with its intense needs for capital and technology development funding) can exist profitably as a standalone. Losing the synergy from its vast platform and technology network from the down brands and the up brands of Porsche make this a strange decision from my pov.

 

[JimBob]

Porsche is able to charge a huge premium for its vehicles as it has built a reputation over the last 50 years of building cars with exceptional characteristics. But the market is limited as few can afford the ticket price. If they ever start building a lot of cars then it all goes up in smoke, really fast. So, not worth a super high price as growth is lacking.

 

[GNB]

https://www.carscoops.com/2022/07/p...ificantly-cut-valuation-expectations-for-ipo/

Seeing at 100bn Euro is just absurd. VW is only 80-something billion euro. I think it will land at around 50bn level. The comparables in legacy ICE car businesses are just too plain-vanilla and straightforward to value, unless there's a large premium on EV's. The issue here is EV's will cannibalize ICE's within the same line-up so net-net there's no new incremental growth. Hard to push the tech angle here given how behind Porsche is in the software department.

What do you guys think of the IPO and long-term investment opportunity? Any investment professionals on here care to chime in? I hope the IPO gets through so Porsche can push their EV projects faster, especially the increased Porsche-only charging sites.

Any long term price prediction is nothing more than a crap shoot. Go back and look at the chart of Amazon's prices. It took 10 years before the price took off. Cars are sexier than books were, and probably the chart will look more like that of Ferrari, but who knows? What if Tesla comes out with high performance vehicles? With Tesla's user friendly software it could make Porsche a relic of the past.

 

[DCYL725]

Any long term price prediction is nothing more than a crap shoot. Go back and look at the chart of Amazon's prices. It took 10 years before the price took off. Cars are sexier than books were, and probably the chart will look more like that of Ferrari, but who knows? What if Tesla comes out with high performance vehicles? With Tesla's user friendly software it could make Porsche a relic of the past.

For internet companies, there's a critical mass point that leads to massive adoption and stock appreciation.

Many stocks IPO early/opportunistically depending on market environments.

Being able to follow the fundamental development of a company results in catching that big wave.

This not investment advice:
Ferrari trades at 7x Sales. Porsche should be in-between VW and Ferrari, I think in the 4-5x sales range. Pure EV's trade at 100x. Let's see if Porsche can get that pureplay EV in their sum-of-the-parts for massive stock appreciation. Maybe when Macan EV hits and Porsche's software team shows up and performs!

 

[f1eng]

A Porsche is a fancy Audi.

True for Panamera, Cayenne and Macan but not for 911, 718 and Taycan.

Porsche is an outlier in designing some of its own platforms, unlike Audi (and Bentley).

 

[RAHRCR]

True for Panamera, Cayenne and Macan but not for 911, 718 and Taycan.

Porsche is an outlier in designing some of its own platforms, unlike Audi (and Bentley).

I am sure you are aware that the Taycan is sharing parts and design with its Audi cousin. This is important to when it comes to the cost of developing a platform.

 

[f1eng]

I am sure you are aware that the Taycan is sharing parts and design with its Audi cousin. This is important to when it comes to the cost of developing a platform.

I am, but it was a Porsche project. I don’t know if a share with Audi was part of the original plan or came later as a good fit.

 

[RAHRCR]

I am, but it was a Porsche project. I don’t know if a share with Audi was part of the original plan or came later as a good fit.

Having worked for a company that develops large projects like this, I can tell you that this was very likely a part of the business case from day one. The volume of anticipated sales over time as compared to the investment cost is a key variable in making this decision. No surprises here. This is how the VW group develops almost every platform.

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