hi all
I am interested in views on Tesla growth drivers/milestones it needs to hit to grow further
I own a number of shares (and have done for a long time) but looking at the valuation and p/e ratio - trying to rationalise in my own head what needs to happen to make Tesla worth double today’s value in 5 years time
what do people think?
how much is ev growth factors - market overall plus self driving?
what is the addressable market for storage?
appreciate any views and opinions
Tesla is expected to grow deliveries by 50% annually and doubling your shares in 5 years is a CAGR of 15%. Current P/E according to Yahoo is 184.
2021 deliveries = 936,000
2026 deliveries = 7,107,750 (50% growth)
184 * 936,000 / 7,107,750 = P/E 24.23
I would expect the P/E to be two or three times higher at a minimum.
Denny Schlesinger
P/E ratio is essentially meaningless for a growth stock like TSLA.
-IGU-
IGU:
P/E ratio is essentially meaningless for a growth stock like TSLA.
What is meaningful for a growth stock like TSLA?
What is meaningful for a growth stock like TSLA?
Growth!
Revenue growth
Gross margin growth
Cash flow growth
Net income growth
Denny Schlesinger
Growth!
Revenue growth
Gross margin growth
Cash flow growth
Net income growth
…true!..
…unfortunately all will be hammered (temporarily) this quarter with the Shanghai shutdown…
…unfortunately all will be hammered (temporarily) this quarter with the Shanghai shutdown…
Okay. Why? How much? I’m guessing you mean quite a bit when you say “hammered”.
Just speculating, but since Tesla has been quite explicit that their limiting factor in 2022 is chip supply, it’s not at all clear to me that they won’t end up still making however many cars they can get chips for this calendar year. They have also been quite clear that all their factories have been producing at under capacity to various degrees for months due to various shortages.
Of course actual production will depend on how many chips they can get, what product mix they build, whether anything else gets limited, and how much down-time there is at all of their factories. The major issue for the short term stock price is the uncertainty that surrounds those things.
My opinion is that another year of 50%+ growth is now at risk, but it may still be achieved depending on exactly how things go. Regardless, given Tesla’s flexibility it is likely that whatever problems there are worldwide that they will hit competitors harder than Tesla. So even if it slows Tesla down some, it will just mean that they pull further ahead in the race.
-IGU-
My opinion is that another year of 50%+ growth is now at risk, but it may still be achieved depending on exactly how things go.
If they have been producing under capacity then they can make up for the shortfall during lockup later in the year. Of course likely the stock price will similarly be hit this quarter which, to me, seems like a buying opportunity. I’ve been trading some TSLA shares taking advantage of the crazy volatility. You just have to have patience, the stock will go up snd down. The trades have lowered my cost basis and paid for my ordinary expenses.
BTW, I’ve bough some ARKK, maybe a bit too soon but near the bottom – I think.
https://bigcharts.marketwatch.com/advchart/frames/frames.asp…
Denny Schlesinger
I’m pretty sure I’ve heard Musk say that their chip situation will correct itself over the course of 2022. My impression was that they expect it to swing from scarcity to abundance or even over abundance, which I interpret as lots of new fabs coming on line.
Okay. Why? How much? I’m guessing you mean quite a bit when you say “hammered”.
…I’ve held TSLA for a decade…it has a high beta…
…if someone coughs on the floor of a factory the stock drops…
…Shanghai was producing just north of 2000 cars per day…
…that has stopped…
…if Shanghai is closed for a month, or more, it’s simple math to figure out the shortfall…
…Berlin and Austin may help some to alleviate the shortfall, but they’re still very early in their ramps…
…the financial news media is both stupid and biased, and the headlines will include things like “massive production miss” and “is Tesla done?” and “competition destroys Tesla”…
…I can see them already…
…of course the savvy investor will use the opportunity that presents itself from uninformed investors who sell in a panic, not having a clue what’s happening…
…but to presume the stock will survive the headline number without taking a hit is short sighted…
…China has to come to the realization that Covid can’t be controlled with absolute authority, and that proper mitigation, vaccination, social distancing, hygiene, mask wearing are the only ways to live with the disease, like living with seasonal influenza…
…when a company sells everything they can make, it’s paramount that they continue to rapidly “make”…
…hopefully the shutdown doesn’t continue much longer, and that China comes to the realization that mitigation is the only way to live with Covid, which is too ubiquitous to “stop” at this point…
…good luck…
CMFHuibs wrote:
…Shanghai was producing just north of 2000 cars per day…
…that has stopped…
…if Shanghai is closed for a month, or more, it’s simple math to figure out the shortfall…
Sure, it’s simple to calculate the shortfall if you assume everything was constant. But you’ve now switched to talking about perception and reaction of the financial news media. Those have no effect on actual growth.
What you said would get “hammered” was:
Revenue growth
Gross margin growth
Cash flow growth
Net income growth
What those depend upon is not something easily calculated. But insofar as Shanghai is concerned, they depend on how future production is affected by the current shutdown. Probably the most important issue outside of supply of various parts is the new General Assembly line that was supposed to be completed and start up this month. That has been delayed due to the shutdown. But by how much? It should (when fully ramped) double the Shanghai capacity for Model 3.
So lots of unknowns, and I agree that it’s possible that the stock price may get hit for a while. But I don’t think it’s likely that actual growth of Tesla revenue, gross margin, cash flow, and net income, will be a problem. They may go from well over 50% to around 50% for 2022. But, hey, it’s hard to predict the future unless you’re making it yourself.
-IGU-
Hi IGU:
“So lots of unknowns, and I agree that it’s possible that the stock price may get hit for a while. But I don’t think it’s likely that actual growth of Tesla revenue, gross margin, cash flow, and net income, will be a problem. They may go from well over 50% to around 50% for 2022. But, hey, it’s hard to predict the future unless you’re making it yourself.”
The problem I have with TSLA is – what can the stock possibly have left in the tank? If the stock does a mere 1/7th as well the next three years as it did the last three, that takes it to $3460 – making the company bigger than Apple is now. Plausible? I fear future growth mentioned is already priced into TSLA. Of course, since I’m not buying, who knows.
Disclosure - I bought TSLA in late Jan 2021; sold for a loss on a stop 25 days later. If I had held my investment would be up 11.9%. In the same time frame, SPY is up 18.3%. I say congratulations to those long TSLA pre-pandemic that held. Well played. That’s one I missed, darn it. I’m looking today for the equivalent investment to TSLA in early 2019.
The problem I have with TSLA is – what can the stock possibly have left in the tank?
If you understood Tesla you would have asked, “What can the stock possibly have left in the battery pack?”
I’m not teasing you. People have a hard time understanding the power of disruptive innovation, we even have to update our language!
Disclosure - I bought TSLA in late Jan 2021; sold for a loss on a stop 25 days later.
I started buying TSLA late in Sep 2020, after listening to Battery Day, and continued to add during October. I took profits in the first half of 2021 selling 84% of the position which I have since built back. How is that relevant? The market could not give a damn how you and I did! I lucked out, you didn’t. Not quite right, I lucked out starting to buy buying based on Battery Day. Took precautions building the position in four tranches and took profits when the stock looked toppy in January 2021:
https://bigcharts.marketwatch.com/advchart/frames/frames.asp…
sold for a loss on a stop 25 days later.
Stop loss orders are a trader’s tool, not an investor’s tool. With a stock as volatile as TSLA you have to have conviction to hold through volatility. My broker used to say, “Use mental stop loss orders.”
A stop loss order becomes a market order when the limit is reached. If the stock is in a panic it can sell well below the limit. A Stop-Limit order improves that a bit but I still don’t recommend it.
I’m looking today for the equivalent investment to TSLA in early 2019.
TSLA, the best is yet to come. TSLA’s 2020 rise was not all based on Tesla, it was part of the general bullishness of the market. I have a full TSLA position but I did start buying ARKK.
https://bigcharts.marketwatch.com/advchart/frames/frames.asp…
Denny Schlesinger