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MartinAustin
Active Member
Reuters is attributing today's fall in TSLA to Elon's "production hell" comment.
Hasn't Tesla been in production hell ever since they started? All depends on one's attitude...
I don't think Elon was all that serious when he was saying it.
Hasn't Tesla been in production hell ever since they started? All depends on one's attitude...
I don't think Elon was all that serious when he was saying it.
Etna
Member
He was serious. The "production hell" statement was made in front of Tesla employees who are going to have to ride that steep S curve, not in front of investors or customers.
It is so easy to take it out of context... few can resist.
It is so easy to take it out of context... few can resist.
ev-enthusiast
Active Member
It is so funny to watch the games people are playing with TSLA.
During the weekend Tesla made available new information that boosts investor confidence in the future value of the company. Keeping the timeline of the next vehicle platform and showing that both current deliveries and production of Model 3 are on track is a tremendous positive and should bode well for the future of the company.
At the same time the SP takes a deep dive as if some negative news were revealed.
Personally I could not resist and I added an extra 10% to my dedicated LEAPs position a moment ago.
Still waiting for and expecting MMs to push TSLA down further. Still have 60% of money dedicated for LEAP buying down to $180, so Goldman Sachs and Brothers bring TSLA down a bit more, I'll keep adding slowly and patiently to my LEAPs position
During the weekend Tesla made available new information that boosts investor confidence in the future value of the company. Keeping the timeline of the next vehicle platform and showing that both current deliveries and production of Model 3 are on track is a tremendous positive and should bode well for the future of the company.
At the same time the SP takes a deep dive as if some negative news were revealed.
Personally I could not resist and I added an extra 10% to my dedicated LEAPs position a moment ago.
Still waiting for and expecting MMs to push TSLA down further. Still have 60% of money dedicated for LEAP buying down to $180, so Goldman Sachs and Brothers bring TSLA down a bit more, I'll keep adding slowly and patiently to my LEAPs position
Simple intrinsic value handle
Discounting 2018 to obtain an intrinsic value of shares today.
2018 model s + x units sold : 110,000 at $100,000 = $11.0 billion
2018 Model 3 units sold : average 7,000 per week over 48 weeks @ $43,000 : $14.4 billion
2018 total car revenues: $25.4 billion
Assume 7.5% net profit margin on $25.4. = $1.905 billion
Assume a p/e of 40 for fast growing: mkt cap = 40*1.905 = $76.2 billion
shares outstanding say 161 million
stock price = mkt cap/ shares outstanding = $7.620/ .161 = $473 per share
Discount at 30% = $473/1.3 = $363 intrinsic value today.
Potential reward : the difference between $473 and $323 today: 473-323 = $150 per share.
Just a guess estimate to get a handle of where we stand, consider it wishful thinking.
(assume the energy business contributes nothing.)
Discounting 2018 to obtain an intrinsic value of shares today.
2018 model s + x units sold : 110,000 at $100,000 = $11.0 billion
2018 Model 3 units sold : average 7,000 per week over 48 weeks @ $43,000 : $14.4 billion
2018 total car revenues: $25.4 billion
Assume 7.5% net profit margin on $25.4. = $1.905 billion
Assume a p/e of 40 for fast growing: mkt cap = 40*1.905 = $76.2 billion
shares outstanding say 161 million
stock price = mkt cap/ shares outstanding = $7.620/ .161 = $473 per share
Discount at 30% = $473/1.3 = $363 intrinsic value today.
Potential reward : the difference between $473 and $323 today: 473-323 = $150 per share.
Just a guess estimate to get a handle of where we stand, consider it wishful thinking.
(assume the energy business contributes nothing.)
bdy0627
Active Member
Keep in mind that it's very possible that GS and others will come out with downgrades after the ER on Wed. Meaningless of course other than affecting the short term share price. If this selloff continues up to the ER, the downgrades may help deepen the dip or prevent a quick recovery. I would just consider this in your analysis if anyone is considering buying today's dip. Be careful this week.
He would know his "production hell" comment would be picked up and for some time negatively influence stock price.
My thought is that as long as he's sure they do not need to do another cap raise until Q1 2018, he doesn't much care how SP bounces
around the next few months. If they hit their end of year production rate in Dec/Jan. that should take care of raising SP to a point where
they can do another cap raise if they need or want one.
ValueAnalyst
Closed
Could you please expand on the 30% discount rate for 10 months, Aug-17 to June-18, for mid-year of your projection period. Also 40x p/e for a company growing triple digits with a wide moat?
Waiting4M3
Active Member
It's not the absolute # that matters, it's the growth trajectory. Elon said as much.I added two shares at 327.70, my holding is still small (below 15 shares)
30% is aggressive, and the model 3 reveal makes a positive outcome way more likely.
Just being very conservative. Even under pessimistic assumptions the potential
reward is very high.
Todd Burch
14-Year Member
My general assessment of Elon is that he doesn't put any thought into wording things carefully for TSLA investors. Always speaks frankly and off-the-cuff. It's a double-edged sword (honesty vs. messaging discipline). There was no need to make that production hell comment at all, but he made it, and shorts take advantage of it. Results in short term dips, but company performance leads to a long-term rise.
Waiting4M3
Active Member
That's my thinking exactly. Elon and Tesla have always been well ahead on their cash needs. TM3 was a bit of a surprise with the 370K reservation right off the bat, and Tesla had to speed up ramp and raise more cash. I don't see this happening as much for the Semi, potential customers are all companies, and Tesla probably has taken the temperature with some of the larger ones, so they likely have a much more predictable demand for the semi, and won't need to continue tweaking their ramp plan like they did for the TM3.
If you'd been to some of the Christmas parties I've been to, you'd be certain of it.
It does not matter when they hit the 30% gross margin. The goal is simply stated as "get there for four quarters". It's not stated as "stay there continuously forever". I assume it's there to encourage cost control and pricing discipline, and once it's achieved, they figure Musk will have learned the *habit* of pricing discipline and they won't sweat a drop to 29%
I'm expecting Tesla to achieve that 30% gross margin for four quarters sometime in the 2018-2019 period. My point is simply that they have made a stated goal and we shouldn't expect pricing cuts (chasing market share at the expsense of margin) until they've achieved it.
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ValueAnalyst
Closed
OK. Most readers here do not know valuation, so it may be helpful to preface your assumptions with color such as "just being very conservative."
For reference, S&P 500 currently has a P/E ratio of 25x vs. the assumed 40x P/E for Tesla. Growth rate is one of the primary considerations that should be factored in when selecting P/E ratios. Tesla will likely grow more than 150% year-over-year in 2018 vs. S&P 500's less than 5%, so that's 30 times growth vs. the assumed 1.6x P/E ratio.
Combined with your 30% discount rate, which is usually reserved for very high-risk venture capital type investments in companies with not much more than an idea, I would agree with you that your price projection is... very conservative.
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Reciprocity
Active Member
This was my, mostly jokingly, prediction yesterday. Now I hope it was right.. come on power hour!
Edit: So Close.. Not!
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