Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Ogre]

Tesla is in the vertical growth phase, shooting up at 87% per year AND tossing off massive earnings. That's unprecedented so early on.

Worth repeating.

Lots of people don’t get this. Tesla just crossed into positive earnings a couple of quarters ago, but we are just at the bottom of the EPS rocket ship right now. Since Operating Expenses are fairly flat, most of every dollar of margin on vehicle sales drops right to the bottom line. That margin is an impressive 30% which very few companies outside the pure technology sector have managed. Nobody has managed those margins and the sort of operating leverage Tesla has.

Every price increase we’ve seen is pure markup. Every additional FSD sale is 95% profit. Every “Performance Boost” people buy is 95% profit.

Tesla is a very unique company.

 

[TheTalkingMule]

If analysts put out accurate EPS estimates for TSLA, TSLA's PEG would be significantly lower than Apple. Meaning, TSLA is significantly cheaper than Apple is right now despite Apple have a TTM P/E of 27 and TSLA having a TTM P/E of 183.

That's what I mean by Wall St gaming TSLA right now. And so no......I'm not going to be happy with TSLA being at 900/share.

I've just been looking at TSLA and GOOG EPS estimates to keep in mind what's going on here.

GOOG is ridiculous because 1Q22 estimate is on par with 1Q21 actual EPS....

TSLA is ridiculous because actual EPS growth is an order of magnitude higher....

 

[henchman24]

Yeah.....multiples and how "expensive" they appear is all about expectations for future earnings over the next 5 years. Any way you want to cut it, Tesla is significantly undervalued here.

We can argue semantics about what is considered high multiple all day, but let's just take PEG, which is the most accurate representation of how expensive a stock's multiple is. As of todays' trading

Apple's PEG is 2.09
Tesla's PEG is 2.95

Current estimate on the Nasdaq website is for EPS (GAAP) 7.59 for 2022. TSLA likely going to print GAAP EPS of $13-14.

If analysts put out accurate EPS estimates for TSLA, TSLA's PEG would be significantly lower than Apple. Meaning, TSLA is significantly cheaper than Apple is right now despite Apple have a TTM P/E of 27 and TSLA having a TTM P/E of 183.

That's what I mean by Wall St gaming TSLA right now. And so no......I'm not going to be happy with TSLA being at 900/share.

I agree with you on the bullish side for Tesla (I'm even higher on this year's EPS), but the reasons why you're upset with the 'gaming' (though I think it is less gaming with most an just flawed models) is the same reason this will play out with a large rally and uptick at some point.

That said, the analyst consensus isn't 7.59 it is 10.57 and a 5 year PEG of 2.35... Apple's 5 year PEG is 3.01. So Tesla is already ahead of Apple there. It will likely extend as we get through the year, which is why Tesla will end up with more gains from this point than Apple will. It takes analysts time to come around.

The exact reasons there are frustrations are the exact reasons there are more gains to be had.

 

[StarFoxisDown!]

I agree with you on the bullish side for Tesla (I'm even higher on this year's EPS), but the reasons why you're upset with the 'gaming' (though I think it is less gaming with most an just flawed models) is the same reason this will play out with a large rally and uptick at some point.

That said, the analyst consensus isn't 7.59 it is 10.57 and a 5 year PEG of 2.35... Apple's 5 year PEG is 3.01. So Tesla is already ahead of Apple there. It will likely extend as we get through the year, which is why Tesla will end up with more gains from this point than Apple will. It takes analysts time to come around.

The exact reasons there are frustrations are the exact reasons there are more gains to be had.

I was referring to GAAP EPS estimates since those are the numbers that actually effect multiples, 10.57 is for Non-GAAP estimates.

And yes, as it always is with TSLA, the stock gets held down until it breaks and then rallies higher. In the process though, Wall St gets to ride lower, higher and everywhere in between. And that's the part that irks me.

 

[henchman24]

I was referring to GAAP EPS estimates since those are the numbers that actually effect multiples, 10.57 is for Non-GAAP estimates.

And yes, as it always is with TSLA, the stock gets held down until it breaks and then rallies higher. In the process though, Wall St gets to ride lower, higher and everywhere in between. And that's the part that irks me.

Almost nobody values off GAAP due to the one time issues that crop up.

Wall St will always make money both ways... they've done that for pretty much forever, and when they get burned, they get bailed out!

 

[Singuy]

Almost nobody values off GAAP due to the one time issues that crop up.

Wall St will always make money both ways... they've done that for pretty much forever, and when they get burned, they get bailed out!

PE is calculated using GAAP. Pretty sure you can't change the rules for PE/G calculation.

 

[henchman24]

PE is calculated using GAAP. Pretty sure you can't change the rules for PE/G calculation.

It is, but when a stock is being evaluated and a price target established... GAAP is almost never used. Nobody really values directly off PEG... PEG is just a metric to watch. Same with PE (by nature published PE numbers are a look back and markets value looking forward). Revs, earnings (including various ways to break them down), dividends, cash flow, etc... those are where valuations come from. Pre-earnings companies tend to focus more on revs and cash flow... post earnings tend to focus on earnings, earnings growth, and/or dividends.

 

[ThisStockGood]

Shorts and friends trying to hold this thing down. I like this.

 

[TheTalkingMule]

Big volume coming in and blowing the top off. I think Kenny Griffin is going down.

$907

 

[StealthP3D]

That's what I mean by Wall St gaming TSLA right now. And so no......I'm not going to be happy with TSLA being at 900/share.

So what are you going to do about it, Salty Guy?

I came upon a bird hunter while hiking the Scottish Highlands and asked him if he was having any luck. He looked haggard and frustrated when he told me he wasn't giving up until he had bagged a Firebird. Knowing there was no such thing, I wished him well and quickly moved on.

 

[bkp_duke]

Wow.

5.74 mil shares in the closing cross.

Just . . . wow.

 

[mrmage]

Never thought being 25% down from the ATH would feel so nice. Guess happiness is relative.

 

[Krugerrand]

Pfft! Not even 4% today. Bah, humbug.

 

[henchman24]

Pfft! Not even 4% today. Bah, humbug.

Yeah and only 19.75% up off the week's low.

 

[thesmokingman]

Never thought being 25% down from the ATH would feel so nice. Guess happiness is relative.

I know right? This rally could be short lived but take a win when you can.

 

[henchman24]

I know right? This rally could be short lived but take a win when you can.

Really will come down to the situation in Ukraine. The market has been letting the hope of it ending soon sink in... a turn for the worse would end this rally quickly. A ceasefire over the weekend would have a large gap up.

 

[Discoducky]

I know right? This rally could be short lived but take a win when you can.

With the VIX down to 24 today and that could hold below 24 Monday, we have most likely seen the bottom and are back on the somewhat long (1 to 2 month) March back to ATHs.

Obviously assuming no new macro weirdness...

 

[dl003]

Wow.

5.74 mil shares in the closing cross.

Just . . . wow.

That's SP 500 adjusting TSLA's weight following Elon's massive sale.

 

[CHGolferJim]

Wow.

5.74 mil shares in the closing cross.

Just . . . wow.

Do you know if all of the closing cross pricing is reflected in the closing price (by 4:00 pm) or does some of it bleed into the after-market?

 

[mongo]

That's SP 500 adjusting TSLA's weight following Elon's massive sale.

Exercise
He holds more shares now (and a higher percentage) than he did before.
Overal I think it would be more shares and lower IWF resulting in a small decrease in float adjusted value.

Edit: @dl003 I neglected to consider that Elon is not the only locked up holder, so IWF would increase.