NEW YORK (Real Money) -- Wednesday, Tesla Motors CEO Elon Musk drew a comparison between his company and Apple , which currently has a market capitalization of more than $700 billion. Musk suggested that if his company could grow revenue at 50% annually and its stock traded for 20 times what the company earned per share, Tesla would achieve a market cap of $700 billion in 10 years. I don't doubt Musk, and I won't bet against him, but it would be an amazing feat for his company to grow revenue at 50% over the next 10 years. Jim Cramer's charitable trust Action Alerts PLUS owns Apple. Read his thoughts in the company's recent earnings here. The problem is that most investors won't look that far into the future. Right now, investors covet Apple because they can envision the company releasing a life-changing breakthrough product -- the so-called Apple Watch, which investors are beginning to realize will be far more than a watch -- within the next few months. Tesla could also create and release a game-changing product, if its innovations in energy storage can be improved and applied for broader use. Unfortunately, Musk's desire to turn Tesla into an Apple-like behemoth will likely go unfulfilled until that time nears. Technically speaking, there is no need to rush into Tesla. The stock broke down in December after forming a massive head-and-shoulders pattern (L-H-R). That pattern projects the stock falling to $177 (green dotted line), which was a major support level last May (green arrow). Since Tesla's breakdown, the stock has formed several lower highs (LH) and lower lows (LL), indicative of a downtrend. Source: TradeStation Tesla's MACD (moving average convergence divergence) indicator has also formed a troublesome pattern of lower highs (H-LH-LH) and will likely generate a sell signal within the next few trading sessions (shaded yellow). Nearly all the sell signals generated by MACD on this chart have been effective, the lone exception being a premature signal that was generated in August (black arrow). The road to a $700 billion market cap will be a rough one for Tesla because this $25 billion company already boasts an extravagant valuation. Musk mentioned the possibility of Tesla trading at a price-to-earnings ratio of 20 in 10 years, but today the stock trades at more than 70 times next year's anticipated earnings. Nobody is suggesting the stock should trade at 20 times forward earnings in 2015, but if it did, Tesla would be priced at about $56 per share. Meanwhile, Apple currently trades at less than 14 times next year's earnings. If we apply the same valuation to Apple (20 times forward earnings) now, Apple shares would rise to more than $180. There is no question that Tesla has the potential to become everything that Apple is today, and more. But until Tesla lives up to its potential and generates game-changing products, equating these two companies is like comparing apples and oranges.
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