-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
- Status
palmer_md
Member
I like the idea of a subtitle for threads. I also agree that the main title should not be changed, but an editable subtitle by the thread author is nice. I've seen it on other sites, and its a good way to keep track of a long term thread that has subject changes.
For example I'm a member of some forums for car restoration, and build threads have subtitles that change when the main author moves to a new stage of the restoration, and the main title stays the same.
For example I'm a member of some forums for car restoration, and build threads have subtitles that change when the main author moves to a new stage of the restoration, and the main title stays the same.
Nice idea, but unfortunately not something that our BB software is set up to do. I believe, though, that the person who owns the first post in a thread can rename the thread by editing that initial post.
palmer_md
Member
Yes, but renaming the entire thread is confusing sometimes. I guess if the BB software does not allow it, then we'll stick with what we have. You can pretty much tell when Dave updates this thread because it has a flurry of activity and stays on the top of the list for a few days. I just liked dave's idea he presented at the "hangout" last night, and I have seen it work on other forums.
I did some research a few months ago on vBulletin software and discovered that the author can't rename the title of a thread after a certain time.
I did find a workaround that I shared with the mods at that time:
Basically, you turn on moderator status for the user (post author) but turn OFF all moderator permissions except for one, the "can edit thread" permission. You'd turn ON the "can edit thread" permission for us which "Determines whether or not this moderator can edit a thread's title and post icon." The details on this are at this url: vBulletin Manual - Adding and Editing Moderators and would only take a few minutes to set up by the Admin.
I'd like to try this out. The basic idea would be the thread title would be "Articles by DaveT - Q4 earnings preview". And then I would change the subtitle when I post a new article to the thread. So "Articles by DaveT" (the main title) always stays the same but the subtitle could change. This way folks would know if I posted a new article that I deemed important.
I'd also like to encourage others to create their own threads if they choose to write multiple articles (they could get mod permission). It takes a lot of time, dedication and research to write a series of articles and I think the TMC community would benefit if we encouraged such activity. If the user just wanted to write one article/megapost, then adding it to an existing post (i.e., Short-term or Q4, etc) would work. But if the author wants to write multiple articles over time, then that's a great act of dedication and I think giving them the power to change the subtitle of their thread would be helpful.
Personally, I have several existing article ideas that I'm hesitant to write and post on this thread because they probably could be their own post. But I don't want to make a new post since it adds more posts to keep track of for people. And I'm hesitant to post it in this thread because it could get buried quickly and some people won't even know a new article's been posted. So, adding/changing a subtitle to the post I think could fix this problem. I'm willing to volunteer as a guinea pig if the mods can enable the privileges to change this thread's title, then we can try it out for a few months and re-evaluate after.
Another option could be creating a new forum for megaposts:
TMC -> TSLA INVESTOR FORUM -> MEGAPOSTS
In which all the mega posters would be moderators.
Form there, have only 1 thread (DaveT's Q4 analysis) whose title can easily be edited by any megaposter (who is a moderator).
~~~~~~~~~~
IMO, a cleaner approach would be:
1) new form with megaposters as mods: TMC -> TSLA INVESTOR FORUM -> MEGAPOSTS
2) each new article in it's own thread - that way all discussion is kept to that specific topic.
Still would have this issue:
Still true, but it should be easier for visitors to monitor this new forum, since new threads would (in theory) only be created by megaposter mods
-bhuwan
EDIT: when say new forum, I'm not talking about something outside of TMC. I'm talking about a "Category" within the TSLA Investor Forum
This is incorrect last I checked.
The OP can change the title of the first post but not of the thread containing that post, unless of course the OP is a moderator.
The Monster Move: Thank you Morgan Stanley
Today TSLA gapped up and made a monster move, hitting a $259.20 all-time high at one point but fading some to close at $247.95 (up 14% from previous close of $217.65).
The move was caused by a massively monumental price target increase by Morgan Stanley who raised their price target to $320 (from a previous $153). I had a chance to read the report last night and was very impressed by the research and presentation by Adam Jonas and his team. The report is 50 pages and I’ll share the main thesis for those unable to read it.
Surprisingly Morgan Stanley’s massive price target increase is mainly due to not Tesla becoming a better car company. Rather, Morgan Stanley is positing that Tesla is actually three companies in one - a car company, a energy storage company, and an autonomous driving company. In their report they make the case that the markets for energy storage and to some extent, autonomous driving, are huge markets if looked over a 20-year horizon. They claim that Tesla is currently in a dominant position in these two markets and that Morgan Stanley has had to adjust their expectations and assessment of the company as a result. So, they are no longer basing Tesla's valuation as a pure car company but rather as a car company, a battery storage company and as an autonomous driving company.
They give a base price target (1 year out) of $320, a bear price target of $100 and a bull price target of $500.
I’ve read my share of analyst reports on TSLA (thanks to generous people who I’m very thankful to), but Morgan Stanley’s report is one of the best I’ve read on TSLA. Last week Deutsche Bank downgraded TSLA to a Hold (but raised their price target to $220 from $200). They cited concerns that they couldn't justify a higher price target than the $220 they were giving. But Deutsche Bank was looking at Tesla as mainly a car company selling 450k cars in 2020. However, Morgan Stanley makes a point that a company like TSLA, which is disrupting multiple industries over a long period, shouldn’t be based on valuations looking a few to several years forward. Rather, Morgan Stanley makes a case that we should look 15-20 years forward and then discount the value to present. This is another reason for their bullish price target increase. They reason:
Let’s take a deeper look into these three markets - autos, energy storage, autonomous driving.
1. Autos
Morgan Stanley’s base case ($320 1-year price target) is based on the following:
These seems quite reasonable and I personally believe Tesla will be able to easily surpass 1.1m units/year by 2028. I have no issues with Morgan Stanley’s numbers regarding autos.
However, this is just part of the valuation they’re giving Tesla.
2. Energy Storage
Morgan Stanley labels the electric utility market as a $1.5 trillion addressable market (compared to autos as a $2 trillion addressable market). They assert that the current U.S. energy storage capabilities are “antiquated and limited” (relying on 95% pumped hydro) but that batteries hold they key for grid/energy storage. They reference a source (Avicenne, Roland Berger, October 2012, Armadee + Company, 2011) as forecasting the Li-Ion battery market to be over $40b in 2020 (from $10b in 2010) with storage and automative sectors accounting for most of the growth.
However, from Morgan Stanley’s report it’s unclear exactly how much and to which markets will Tesla be selling batteries as energy storage to. I look at Morgan Stanley’s report as more of an intro to the huge possibilities of energy storage that Tesla could enter and while Morgan Stanley doesn’t seem to have concrete figures on revenue expectations, they’re leaving it open that this is a huge business area and should be incorporated into the valuation of Tesla.
3. Autonomous Driving
Morgan Stanley introduces a new market called autonomous driving and presents it as a separate market/opportunity than autos. They reason that fully autonomous driving will arrive within 20+ years and that autonomous driving will be made up of 40% hardware (ie., the car), 40% software, and 20% content (what you do while you sit back and relax). So, the report is saying that Tesla is by far in the dominant position in this area of autonomous driving. Not only will it save a ton of productivity time for people (they’re estimating $507b/year) but it will also come at a premium compared to cars without this feature (ie., $10k extra). Tesla will also be able to take advantage of providing content to users in autonomous cars (ie., imagine renting a movie or downloading an app while your car drives you to your destination).
While I’m unclear if autonomous driving really is a 3rd separate market from autos and energy storage, I can definitely see the point that Tesla is far, far ahead in this area of autonomous driving compared to existing ICE companies. Tesla operates like a tech startup that is relentless in iteration and thinking outside the box. And as Tesla iterates on “auto-pilot” (as they like to call it), the features will only become better and better over time, adding increasing value to the consumer and further differentiating their vehicles from others.
Why Morgan Stanley’s report matters
The reason why Morgan Stanley’s report is important is because it provides a different (and convincing) way to value TSLA. Previously most valuations looked at Tesla as purely an auto company with maybe the possibility of entering into energy storage but that looked very undefined. However, Morgan Stanley makes the case that Tesla is currently the dominant player in the energy storage market and that there is nobody in second place. And not only energy storage, but they’re asserting that Tesla is in a dominant first-mover position in autonomous driving that will bring additional value and revenue to their cars and add additional business models like content.
Overall, this kind of well-thought-out and well-researched report is exactly what is needed to counter the argument that “Tesla is overvalued compared to GM”. In other words, Tesla isn’t just an auto company and shouldn’t be valued like one. Rather, Tesla is three companies in one. Try to value that.
My wife was sharing after she read the report that if Elon Musk started a new company we’d be clamoring to get a piece of the company in the IPO. She remarked that by Tesla getting into energy storage it’s like Elon starting a new company but it’s done inside Tesla (and maybe even a 3rd company, autonomous driving). She said we’re getting a bargain by being TSLA stockholders - two/three Elon Musk companies in one. Got to love that.
TSLA Valuation
Since reading Morgan Stanley’s report, I am now needing to re-evaluate my models and personal price targets for TSLA. I was previously looking at TSLA as primarily an auto company and choosing to wait until the energy storage market/business grows to factor that in to TSLA’s valuation. But with the upcoming gigafactory announcement and Morgan Stanley’s assertion that Tesla is in a dominant position in the energy storage market, I’m finding I’ll probably need to adjust my price targets and models. This puts TSLA valuation in flux, not just for me but for investors as people scramble to make sense of how to value a company like Tesla.
Barring any major negative catalysts (ie., fires, recalls, recessions, etc), 2014 is looking like a great year for TSLA.
Congrats to all Tesla believers on today's monster move.
ps., just fyi, if someone sends me an analyst report via PM/email (hint, hint), I won’t publicly share the actual report. I’ll read it and might reference parts of it in my articles so that the whole community can benefit. And I’ll be very thankful to the person that sent me the report.
Today TSLA gapped up and made a monster move, hitting a $259.20 all-time high at one point but fading some to close at $247.95 (up 14% from previous close of $217.65).
The move was caused by a massively monumental price target increase by Morgan Stanley who raised their price target to $320 (from a previous $153). I had a chance to read the report last night and was very impressed by the research and presentation by Adam Jonas and his team. The report is 50 pages and I’ll share the main thesis for those unable to read it.
Surprisingly Morgan Stanley’s massive price target increase is mainly due to not Tesla becoming a better car company. Rather, Morgan Stanley is positing that Tesla is actually three companies in one - a car company, a energy storage company, and an autonomous driving company. In their report they make the case that the markets for energy storage and to some extent, autonomous driving, are huge markets if looked over a 20-year horizon. They claim that Tesla is currently in a dominant position in these two markets and that Morgan Stanley has had to adjust their expectations and assessment of the company as a result. So, they are no longer basing Tesla's valuation as a pure car company but rather as a car company, a battery storage company and as an autonomous driving company.
They give a base price target (1 year out) of $320, a bear price target of $100 and a bull price target of $500.
I’ve read my share of analyst reports on TSLA (thanks to generous people who I’m very thankful to), but Morgan Stanley’s report is one of the best I’ve read on TSLA. Last week Deutsche Bank downgraded TSLA to a Hold (but raised their price target to $220 from $200). They cited concerns that they couldn't justify a higher price target than the $220 they were giving. But Deutsche Bank was looking at Tesla as mainly a car company selling 450k cars in 2020. However, Morgan Stanley makes a point that a company like TSLA, which is disrupting multiple industries over a long period, shouldn’t be based on valuations looking a few to several years forward. Rather, Morgan Stanley makes a case that we should look 15-20 years forward and then discount the value to present. This is another reason for their bullish price target increase. They reason:
“We argue Tesla cannot be valued on near-term multiple metrics like traditional auto companies given that we expect Tesla to multiply revenues by more than 10x from 2013 to 2016 by nearly 30x by 2020 and around 60x by 2028. We have thus chosen a 15-year time horizon for our DCF which captures the full maturation of the Model S, Model X (and top-hat derivatives) and also the ramp up of its mass market electric vehicle (the Gen 3).”
Let’s take a deeper look into these three markets - autos, energy storage, autonomous driving.
1. Autos
Morgan Stanley’s base case ($320 1-year price target) is based on the following:
“Successful commercialization of Model S, X and Gen 3 with combined volume surpassing 1.1 million units by 2028. A thriving company with OP margins peaking at 16.4%, normalizing at 15%. A successful Model S and X with combined volume nearly 150k units by 2020. Gen 3 volume reaching 220k units by 2020 and 775k by 2028. 8% OP margin reached in 2014, peaking at 16.4% by 2019, normalize at 15.3%. Our valuation includes $15 for regulatory credits (a $1.9bn EV).”
These seems quite reasonable and I personally believe Tesla will be able to easily surpass 1.1m units/year by 2028. I have no issues with Morgan Stanley’s numbers regarding autos.
However, this is just part of the valuation they’re giving Tesla.
2. Energy Storage
Morgan Stanley labels the electric utility market as a $1.5 trillion addressable market (compared to autos as a $2 trillion addressable market). They assert that the current U.S. energy storage capabilities are “antiquated and limited” (relying on 95% pumped hydro) but that batteries hold they key for grid/energy storage. They reference a source (Avicenne, Roland Berger, October 2012, Armadee + Company, 2011) as forecasting the Li-Ion battery market to be over $40b in 2020 (from $10b in 2010) with storage and automative sectors accounting for most of the growth.
However, from Morgan Stanley’s report it’s unclear exactly how much and to which markets will Tesla be selling batteries as energy storage to. I look at Morgan Stanley’s report as more of an intro to the huge possibilities of energy storage that Tesla could enter and while Morgan Stanley doesn’t seem to have concrete figures on revenue expectations, they’re leaving it open that this is a huge business area and should be incorporated into the valuation of Tesla.
3. Autonomous Driving
Morgan Stanley introduces a new market called autonomous driving and presents it as a separate market/opportunity than autos. They reason that fully autonomous driving will arrive within 20+ years and that autonomous driving will be made up of 40% hardware (ie., the car), 40% software, and 20% content (what you do while you sit back and relax). So, the report is saying that Tesla is by far in the dominant position in this area of autonomous driving. Not only will it save a ton of productivity time for people (they’re estimating $507b/year) but it will also come at a premium compared to cars without this feature (ie., $10k extra). Tesla will also be able to take advantage of providing content to users in autonomous cars (ie., imagine renting a movie or downloading an app while your car drives you to your destination).
While I’m unclear if autonomous driving really is a 3rd separate market from autos and energy storage, I can definitely see the point that Tesla is far, far ahead in this area of autonomous driving compared to existing ICE companies. Tesla operates like a tech startup that is relentless in iteration and thinking outside the box. And as Tesla iterates on “auto-pilot” (as they like to call it), the features will only become better and better over time, adding increasing value to the consumer and further differentiating their vehicles from others.
Why Morgan Stanley’s report matters
The reason why Morgan Stanley’s report is important is because it provides a different (and convincing) way to value TSLA. Previously most valuations looked at Tesla as purely an auto company with maybe the possibility of entering into energy storage but that looked very undefined. However, Morgan Stanley makes the case that Tesla is currently the dominant player in the energy storage market and that there is nobody in second place. And not only energy storage, but they’re asserting that Tesla is in a dominant first-mover position in autonomous driving that will bring additional value and revenue to their cars and add additional business models like content.
Overall, this kind of well-thought-out and well-researched report is exactly what is needed to counter the argument that “Tesla is overvalued compared to GM”. In other words, Tesla isn’t just an auto company and shouldn’t be valued like one. Rather, Tesla is three companies in one. Try to value that.
My wife was sharing after she read the report that if Elon Musk started a new company we’d be clamoring to get a piece of the company in the IPO. She remarked that by Tesla getting into energy storage it’s like Elon starting a new company but it’s done inside Tesla (and maybe even a 3rd company, autonomous driving). She said we’re getting a bargain by being TSLA stockholders - two/three Elon Musk companies in one. Got to love that.
TSLA Valuation
Since reading Morgan Stanley’s report, I am now needing to re-evaluate my models and personal price targets for TSLA. I was previously looking at TSLA as primarily an auto company and choosing to wait until the energy storage market/business grows to factor that in to TSLA’s valuation. But with the upcoming gigafactory announcement and Morgan Stanley’s assertion that Tesla is in a dominant position in the energy storage market, I’m finding I’ll probably need to adjust my price targets and models. This puts TSLA valuation in flux, not just for me but for investors as people scramble to make sense of how to value a company like Tesla.
Barring any major negative catalysts (ie., fires, recalls, recessions, etc), 2014 is looking like a great year for TSLA.
Congrats to all Tesla believers on today's monster move.
ps., just fyi, if someone sends me an analyst report via PM/email (hint, hint), I won’t publicly share the actual report. I’ll read it and might reference parts of it in my articles so that the whole community can benefit. And I’ll be very thankful to the person that sent me the report.
Last edited:
Honestly. I think MS is being way too bullish on the other fronts (other than selling cars).
Energy storage won't be as big a market as quickly as they say. And if the cars can actually be used as demand moderators, that will kill a lot of the energy storage market.
Next, autonomous driving may be huge. But this is not something that Tesla can do alone. It requires a ton of regulatory cooperation, which means that it requires tons of cooperation from other automakers.
That said, I think they are underestimating sales of the cars themselves in 2028.
Energy storage won't be as big a market as quickly as they say. And if the cars can actually be used as demand moderators, that will kill a lot of the energy storage market.
Next, autonomous driving may be huge. But this is not something that Tesla can do alone. It requires a ton of regulatory cooperation, which means that it requires tons of cooperation from other automakers.
That said, I think they are underestimating sales of the cars themselves in 2028.
Gtoffo
Member
+1 thanks DaveT for your invaluable contributions to this community.
I definitely agree that valuing Tesla just as a car company is a big mistake. Elon uses "his companies" as platforms for whatever he thinks will be the "next great thing" he can accomplish. He treats his companies as reservoirs of sector specific talent and is not afraid to join their forces/goals when an opportunity materializes (remember the Hyperloop?).
The synergies between Tesla and SolarCity are not coincidental and are obvious to anyone who has followed those companies for a while. That is actually the underlying thesis to my long-term investment in SolarCity. Can't wait for SpaceX to start playing a role.... :-D
Together, those companies will change the world.
I agree with this, and I am a bit confused as to why MS posits that Tesla has such a huge head start in this area. They may--perhaps the report goes into detail about IP that I am unaware of--but the "hardware" components related to autonomous driving are in my view likely to be commodity items that will spread rapidly throughout the industry, manufactured by the same core tier of suppliers for everyone. At this point, my guess is that if anything the traditional automakers probably have the head start here, since many of the constituent components necessary for autonomous driving (lane departure, radar cruise, etc.) are already built in to high end vehicles from other manufacturers.
As for delivery of content, that does strike me as a potentially large market, but I am not sure why the car would be the source of the content, or why the carmaker would be the most logically positioned to capitalize on this demand. Wireless carriers and traditional content providers seem best positioned to provide these services.
It's also interesting to me that DaveT's summary of MS's report does not refer to the Supercharger network. To me, more than either energy storage or autonomous driving, this is the feature of Tesla's business model that justifies optimistic valuations. It gives the company a competitive advantage in car sales that will take concerted effort to overcome, and it presents a long-term opportunity to establish an recurring revenue stream from the consumers (either Tesla's own, or those they license the technology to).
I've got a lot of thoughts about short-term price action but there's a high likelihood that I'm completely wrong. So, I'll stay out of the speculation for now until the dust settles a bit.
I will say though I'm not tempted at all to sell my long-term core holdings (stocks and LEAPs), partly because of tax reasons but mostly because I think 2014 will be very good for TSLA.
Regarding autonomous driving, I happen to agree with Morgan Stanley that Tesla has a dominant lead over all ICE manufacturers in this area. The reason being is because autonomous driving will be mostly about the software (ie., 95%). And the software required to drive people 100% autonomously will be incredibly difficult to create since it needs to avoid pretty much all death/injury. The way I look at it is that a 100% autonomous driving car will need software that is much more advanced than an entire Windows OS or iOS system. I personally would guess it would be 50-100x more difficult (or perhaps even greater) to create a 100% autonomous driving car than it would be to code iOS, Android, and Windows OS combined. This is speculation on my part, but I do have a software background.
This is the reason why no ICE manufacturer can compete with Tesla with autonomous driving. ICE manufacturers are adding nice features (ie., adaptive cruise control, etc) and will continue to do so, but Tesla will leapfrog them within 3 years when they release an auto-pilot system that likely does adaptive cruise control AND steering control on the freeway. It will probably take ICE manufacturers at least several years to catch up to that after it's released. Then, Tesla will enter a relentless period of software iteration that only a software-focused company can match. Software isn't the speciality of ICE manufacturers, so they'll fall behind and increasingly probably rely on other companies (ie., Mobileye, Google, etc). I wouldn't be surprised if Tesla's main competition to autonomous driving is actually Google (and maybe Google buys out Mobileye... just speculating). Tesla can compete with a software-focused company like Google because Elon understands software (ie., from his previous experience starting Paypal and Zip2) and knows how to manage and enable Tesla as a software-focused and engineering-focused company.
The MS report did mention superchargers but it wasn't a main part of their report. They mention that superchargers help sell cars and allow Tesla to perfect their battery storage systems.
That's quite the assumption. To start with, Tesla may have developmental advantages, but they don't have magic sauce here. And they certainly aren't unrestricted by regulation (which would most certainly apply to autonomous driving). Moreover, where's the proof of any of this? Elon said something a while back and everybody has run with it. Where has Tesla ever demonstrated serious tech in autonomous driving other than a few pilot works (with MB I believe)?
To start with, it's quite the leap to assume that the competition doesn't have any software chops, when they've been writing software for the systems in their car. Sure, they may not make the best user interfaces. But software for the cars core systems is a whole other matter. They've been doing this quite reliably. See all the developments on everything from throttle control to adaptive cruise control. And they probably have a lot of that patented too. Moreover, software is actually easier to engineer around than hardware. Which means it won't take much for any of the big guys to really get past Tesla's software. Nor for that matter will it be hard for the big guys to setup software houses in silicon valley to develop this stuff or to partner up with Google (famous for being open).
Next, for any of this to truly succeed, it will require broad deployment. And that means co-operation. There's going to be no way around this. That will inherently blunt the value of any lead that Tesla has.
As a long, I actually think thinking like this is starting to push into irrational exuberance territory. And it's moronic because Tesla can succeed entirely on the merits of it selling vehicles and running the infrastructure for said vehicles.
JRP3
Hyperactive Member
I somewhat agree that Tesla's autopilot program may be somewhat overblown. Other OEM's have demonstrated autonomous driving, including Nissan with a LEAF, yet we've seen nothing at all from Tesla.
- Status
Similar threads
- Locked
