One of the law firms already asked 4 times for someone to step forward as the lead plaintiff. Apparently they can't get any.
Surprised. Would’ve figured a certain MS would have applied.
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One of the law firms already asked 4 times for someone to step forward as the lead plaintiff. Apparently they can't get any.
this is what Ron Barron thinks:Stock price is determined by the expected future earnings. Many long investors understand how big the future earnings will be. That's why Ron Baron is predicting 20 fold in the next 10~15 years. Gene Munster said Tesla will be the best performing large tech company in the next 5 years. ARK explained why each Model 3 could bring in $60,000 profit for Tesla through Tesla network. The understanding of the future potential will help create a floor for the stock price.
On the potential downside, shorts want to create a fear that "Tesla is running out of cash, it will bankrupt", so they can push it down really hard, then they can cover. My understanding is a company is not pure math. Many years ago when Steve Jobs went back to Apple the second time, Wall Street was so sure Apple will bankrupt because of the debt burden. Then Steve asked Bill Gates to get cash and gave Microsoft some Apple Stock. The rest is history. Bean counters had a hard time to understand why Apple's debt problem suddenly went away. If Tesla has to pay a lot of money for parts and robots, Elon will find a way to pay. The forward payment for parts will turn into profit when the cars are produced. In the worst case, I have no doubt Elon himself can lend a few billion dollars to Tesla. But he doesn't need to. Shorts don't understand how strongly investors support Tesla. There are many ways that Tesla can handle the cash requirement.
2020 LEAP will be available next week. I look forward to add some, and add more if the stock drops more. In my view TSLA is a rare investment opportunity at this time and this price level. I will be happy to see even better entry.
And neither are the rest of us, nor any new information.The person I am debating is clearly not getting any entertainment whatsoever out of this.
this is what Ron Barron thinks:
Ron Baron says Tesla stock will be $1000 by 2020s
he thinks Tesla will have $70b in revenues with $10b in profits on 1m cars/year
first... 1m cars per year is not $70b in revenues... it's $54b with the best case scenario:
800,000 * 45,000 + 200,000 * 90000 = 54,000,000,000
worst case scenario it's:
900,000*40,000 + 100,000 * 80,000 = 44,000,000,000
but how/where are they going to produce 1m cars? Freemont?... the 1m/year crap came from Elon's 500k in 2018/1m in 2020 quotes last year.... how'd that pan out?
let's go with 200k in 2018... 350k in 2019.... 500k in 2020:
so that's something like:
350,000 * 45,000 + 150,000 * 85,000 = 28,500,000,000
so if Ron Barron thinks TSLA should be valued at $1000 per share in 2020 on $70b... then Ron Barron thinks TSLA should be valued at $400 per share on $28.5b...
that's a 3% gain from the recent high...
and that doesn't include execution risks.
and BTW... BMW is valued at ~$60b (TSLA @ $350) w/ $100B+ in revenues.
don't get me started on ARK.
Surprised. Would’ve figured a certain MS would have applied.
this is what Ron Barron thinks:
Ron Baron says Tesla stock will be $1000 by 2020s
he thinks Tesla will have $70b in revenues with $10b in profits on 1m cars/year
first... 1m cars per year is not $70b in revenues... it's $54b with the best case scenario:
800,000 * 45,000 + 200,000 * 90000 = 54,000,000,000
worst case scenario it's:
900,000*40,000 + 100,000 * 80,000 = 44,000,000,000
but how/where are they going to produce 1m cars? Freemont?... the 1m/year crap came from Elon's 500k in 2018/1m in 2020 quotes last year.... how'd that pan out?
let's go with 200k in 2018... 350k in 2019.... 500k in 2020:
so that's something like:
350,000 * 45,000 + 150,000 * 85,000 = 28,500,000,000
so if Ron Barron thinks TSLA should be valued at $1000 per share in 2020 on $70b... then Ron Barron thinks TSLA should be valued at $400 per share on $28.5b...
that's a 3% gain from the recent high...
and that doesn't include execution risks.
and BTW... BMW is valued at ~$60b (TSLA @ $350) w/ $100B+ in revenues.
don't get me started on ARK.
this is what Ron Barron thinks:
Ron Baron says Tesla stock will be $1000 by 2020s
he thinks Tesla will have $70b in revenues with $10b in profits on 1m cars/year
first... 1m cars per year is not $70b in revenues... it's $54b with the best case scenario:
800,000 * 45,000 + 200,000 * 90000 = 54,000,000,000
worst case scenario it's:
900,000*40,000 + 100,000 * 80,000 = 44,000,000,000
but how/where are they going to produce 1m cars? Freemont?... the 1m/year crap came from Elon's 500k in 2018/1m in 2020 quotes last year.... how'd that pan out?
let's go with 200k in 2018... 350k in 2019.... 500k in 2020:
so that's something like:
350,000 * 45,000 + 150,000 * 85,000 = 28,500,000,000
so if Ron Barron thinks TSLA should be valued at $1000 per share in 2020 on $70b... then Ron Barron thinks TSLA should be valued at $400 per share on $28.5b...
that's a 3% gain from the recent high...
and that doesn't include execution risks.
and BTW... BMW is valued at ~$60b (TSLA @ $350) w/ $100B+ in revenues.
don't get me started on ARK.
Newcomers and incumbents hopefully will build good EVs profitably, they might also be able to wind down "old school" car production without too much trouble while also securing enough battery supply. But even if every incumbent is able to do this and several new ones pop up, Tesla is still fine unless they stop making good cars. It's not really about cornering the market, it's about doing a good job with whatever piece of the pie they go after. The other thing to consider is its not just a car company anymore, by 2020 they could have as much or more revenue from batteries, solar, or ? that we don't even know about yet.The underlying bullish argument always seems to be that Tesla, and only Tesla, can profitably build EVs. I don't accept that as fact. I believe those other old dogs will learn new tricks and by the early 2020s the landscape will be very different with dozens of credible choices. Until then, of course, Tesla will dominate. It will make for a fun ride on TSLA.
nope.First of all, he said 2020’s.
Also, since you said and then calculated best case scenario and came out with 54 billion in revenue. I think to be even slightly honest calculating “best case scenario” you would have to include TE and TS. As well as Tesla pick ups with an ASP of around 70k, have you seen the price of pickups these days? There is also the model Y and the next gen roadster which might have an ASP of 150k+.
Your model assumes that Tesla derives revenue from automotive hardware only. Tesla Energy should be factored in somehow. Autonomous shared services is a wild card that I'm not entirely clear how to account.
Here's my very rough model, followed by numerous caveats:
(1) Today's stock price in late 2017.
Investors looking 2 years ahead (to late 2019):
100k Model S and X at ASP of 100k = 10B revenue
400k Model 3 at ASP of 42.5k = 17B revenue
Tesla Energy = 3B revenue. This is a wild guess.
Total expected 30B in revenue. If Tesla were to stop growing at this point and stabilize at 10% net margin, 3B net * 20 P/E (higher than pure automotive, lower than pure tech), 60B market cap, target of $365/share in late 2017
(2) Stock Price in late 2019
Investors looking 2 years ahead (to late 2021)
100k Model S and X, ASP of 100k = 10B revenue
900k Model 3 and Model Y, ASP of 45.5k, based on 40%/60% 3/Y mix, with Model 3 ASP at 42.5k, Model Y ASP at 47.5k. = 40.95B revenue
Tesla Energy = 5B revenue
Total expected 56B in revenue by 2021. If Tesla were to stop growing at this point and stabilize at 10% net margin, 5.6B net * 20 P/E (higher than pure automotive, lower than pure tech), 112B market cap, target of $678/share in late 2019.
(3) Stock Price in late 2021
investors looking 2 years ahead (to late 2023)
100k Model S and X, ASP of 100k = 10B revenue
1900k Model 3 and Model Y, ASP of 45.5k, based on 40%/60% 3/Y mix, with Model 3 ASP at 42.5k, Model Y ASP at 47.5k. = 86.45B revenue
Tesla Energy = 10B revenue
Total expected 106B.45 in revenue by 2023. If Tesla were to stop growing at this point and stabilize at 10% net margin, 10.6B net * 20 P/E (higher than pure automotive, lower than pure tech), 212B market cap, target of $1284/share in late 2021.
As long as Tesla continues to grow, market participants may continue to look ahead and project where the revenue growth will lead.
BMW's market cap does not grow possibly because (1) it's revenue trajectory is much shallower, despite high relative level (2) it's ICE business is under threat, and its future EV plans make it look behind not just Tesla, but VAG and Daimler as well (3) Business is limited mostly to automobiles.
Caveats:
ASPs are difficult to predict, due to changing customer tastes, competition, and macro conditions.
Tesla Energy figures are based on roughly doubling installation contracts every year. Difficult to predict.
Probable net margins are difficult to predict, because we don't know how successful Tesla will be at reducing service and delivery costs.
Regulatory and Legal: building new factories means potential for red tape. Litigation is always a possibility (e.g. Takata)
Autonomous vehicle services not accounted for in this model
Trucks are not accounted for in this model.
Black Swan events (Earthquakes, wars, severe macro downturns) are not accounted for in this model.
Unforeseen applications in technology are not accounted for.
Unforeseen obsolescence of technology is not accounted for.
Dilution from capital raises is not accounted for.
There are probably many other factors not accounted for.
The future is difficult to predict. The one thing I am confident in, is that both my fuzzy model and your model, will likely prove incorrect, and probably in surprising ways.
you think for some reason that TSLA will continue to trade at fan-boy ratios of 2x P/S and some ridiculous book value?... you think Tesla will somehow get 10% net when the highest in the scaled out auto sector is 7.5%?... why, because they use robots?
GM Hooking 30,000 Robots to Internet to Keep Factories Humming
how about another outcome... it's late 2018... Tesla spits out 120k M3s and 80k MS/MX... prices are reduced because tax incentives are no longer available... raw material prices rise... GMs are nowhere near 25% to 30% as promised... cash flows are not substantial enough to expand rapidly... Freemont factory is limited to ~500k/year... Chinese plant expected to come online in 2022 allowing for 1m... difficulties of being an auto manufacturer materialize... and...
TSLA trades w/ a P/S of 0.7 by 2019... which is high for an auto company... resulting in an SP of approximately $120.
remember... first Elon says it's ahead of schedule... then he says making cars is hard... first they say they don't need another cap raise... then they do that once or twice a year every year... first they say 100k to 200k in 2017... then they deliver less than 5k for the year...
my assumptions are realistic... yours are fantastic.
Ten years ago it as 2007.10 years ago I would never have guessed that Tesla even survived to 2017.