Gary's model derives almost all of TSLA's valuation from the sale of cars. Elon thinks that almost all of TSLA's valuation comes from AI and robotics. One of them is wrong ... and not by a little bit. (Guess who I think is right.)
I think Gary wants to own TSLA for the AI and robotics but doesn't want to admit it. He has clients who would leave him (and conservative value buddies who would think he's crazy) if he says that he believes Elon's claims about Robotaxi and Bot. So, instead, he bakes enough value into the car business to justify owning the shares on that basis alone.
Sure, but both are ignoring Tesla Energy which is on trajectory to be larger than auto, perhaps with less robust margins, although recent results suggest even that may be too pessimistic. The combination of:
- VPP (Virtual Power Plant) with licenses existing in EU, UK, Texas and elsewhere/subsets of these in several places;
-servicing fees for utility-level and other Megapack installations;
That also ignores:
- all the other subscription revenue from everything form Premium Connectivity to FSD;
-rapidly growing Supercharger revenue from non-Tesla and Tesla uses.
I choose to ignore Robotics and RoboTaxi because there is no justifiable way to establish timing or even revenues. No matter the probable future value, I only choose to value that which can be assessed today.
Beyond those items it is clear that very few analysts, including the bulls, can really understand the Tesla manufacturing and logistics advantages. Historically that was a major impediment for APPL and AMZN among many others. The inertia built on traditional thinking about market shares, manufacturing efficiency and distribution excellence all contribute to a serious inability to observe actual changes when it happens. With TSLA that is exacerbated by the power of 120 years worth of evolution built on Fire and Ice. ok, explosions, not really fire.
The positive cash flow in growth is also largely ignored and virtually never valued, probably because it is unprecedented. Realistically, unprecedented things face heavy resistence. Simply understanding TSLA positive cash flow explains how they have negligible leverage which in turn explains how TSLA has enormous resilience to anything adverse.
We'd send far less time aimlessly bleating about quarterly sales and/or production were we to really see TSLA as the value stock champion that it really is.
Making TSLA a 'story stock' really exacerbates volatility and has zero intrinsic value.
