Can you further entertain us with Q3 prediction of numbers and guidance? :biggrin: Thanks
Not ready to drill it down to numbers and guidance. What I will say is that my big concern for Q3 coming out of Q2 was that the shorts would have capitulated already and that there would be no surprises left to factor in besides the likelihood of the Q2 warnings of supply chain constraint becoming officially a non issue (Samsung, LG etc, plus the fact that Tesla is obviously pumping out a lot of cars lately presumably with all the required parts).
Thanks to the distractions and yammerings about valuation I am pretty sure it will be business as usual with the stock full of shorts again. I think the shorts will be blind-sided with a GAAP profit and a cash-generative quarter along with an unfactored-in surprise for just how much Euro Q2 production ended up on the books in Q3. This in addition to what looks like a relatively significant production ramp up.
Also the same old story, there appears to be almost no-one modelling for the fact that this business does not need to burn cash for growth in the form of building sales inventory because most models are hung up on standard manufacturing analogies with other auto makers who build cars and receive cash in that order whereby Tesla is the complete opposite.
Prior to Q3 most likely a volatile jungle in which the main trick is not to panic, may well see $190+ pretty directly after the US Govt sorts it's life out. It seems as though opinion polls are dragging the tea party reps to the table sooner than they would ideally like.
Might also get a lucky dip before earnings again like we saw in Q1 and Q2. Post Q3 would be hard to imagine TSLA not seeking out the bull end of Analyst projections in the $200~$210 range as all the hold and sell guys get proven unreliable, again.
Personally I plan to enjoy the fruits of this government debacle (I grabbed some irresistible $175 Oct 18 calls when the price tanked the other day on basically non-buiness-of-Tesla related BS - these are already up 80% but I am digging my heels in for an announcement) and then look for a setup anywhere in the $180s on volatility to go nuts on Q3.
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Julian, One other important aspect of Damodoran's analysis: it's very sensitive to projected growth-rates. Change 70 to 100, you get a much higher share price. Also, his model assumes high growth only up to 5 years. Then it gradually comes down to 3% or something like that. If you plug in your estimate of 100% growth over next 8 years, you will get an astounding share price.
Very glad to know that you bought some shares. You are one of the most knowledgeable people on Tesla. I always felt bad that you weren't enjoying the benefits of your insight.
3% after 5 years is preposterous. We will be looking at 100% in 2014, probably another 100% in 2015, probably another in 2016, definitely another in 2017. Year 5 a 97% drop in growth, never going to happen.
A simple key to Damodoran's analysis is a table with a range of cost of capital. All of which overstate Tesla's cost of capital by somewhere between north of 650% to infinity. Just remove that error and even with the 3% growth after 5 years you get $120+ instead of $67. Put in a sensible ongoing rate of growth and sorry to say the whole Damadoran thing and anything that hangs off it is simply wrong.
) When people say "I bought 180 Oct 19 calls... wish me luck" it is a very precise commentary on where the poster thinks the price will be in a specific timeframe, backed up by real money and not idle thought. The discussion of super duper calendar iron spread plays make my head spin too but we should probably relax.
