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

[heltok]

This inspired me to look into Amazon's financials and other companies valued more than Tesla. I think you're right here.

Amazon compared to Tesla:

• 2x less revenue compound annual growth rate
• Gross margin % in low 40s, about equal to where Tesla will be in 2024 with new factories ramped up
• 2-3x less operating/net margin, and Tesla's lead is widening due to operating leverage increasing
• Heavy competition in online retail segment and moderate threat from Microsoft Azure in cloud services, vs Tesla being absurdly far ahead of competitors

Here are the rough numbers for Amazon before the recent slowdown in the last year:

Growth

Revenue: 30% per year​

Earnings per share: 80% per year​

Operating Income: 80% per year​

​

Margins:

Gross: 42%​

Operating: 4 to 6%​

Income:

Gross: $200B​

Operating: $30B​

Spoiler: Amazing Amazon Charts

View attachment 851727
View attachment 851795

Amazon Revenue 2010-2023 | AMZN

Amazon annual/quarterly revenue history and growth rate from 2010 to 2023. Revenue can be defined as the amount of money a company receives from its customers in exchange for the sales of goods or services. Revenue is the top line item on an income statement from which all costs and expenses...

www.macrotrends.net

Right now my Tesla model for 2023 has deliveries of 2.8M and gross profit per car rising into the low-to-mid $20k range as Tesla improves on both the revenue and cost sides of the equation. Opex will stay under $8B I think. I've recently incorporated the $45/kWh US tax credit for batteries to cost on both cars from Fremont and Austin and also stationary storage, which has a big impact on margins. My thesis hasn't significantly changed from earlier this year other than the US sustainable energy tax advantages being finalized. I'm just trying to estimate the impact of the remaining price rises, mix shift, cost savings, etc.

The combined effect is a profit bonanza of $58B GAAP net income. I almost can't believe it but I derived each number independently of the others as best I could and I've spent months trying to figure out if I've lost my mind yet I keep getting similar results.

So I'm projecting Tesla to crush Amazon on earnings next year in addition to the better growth and margins, but as of today Amazon has a market cap more than 30% higher than Tesla's. How much longer can this last? How much longer until Tesla has the highest market cap?

View attachment 851830

Companies ranked by Market Cap - CompaniesMarketCap.com

Ranking the world's top companies by market cap, market value, revenue and many more metrics

companiesmarketcap.com

• Apple makes steady profit with good margins but they're growing slowly. It took them 4 years to double net income from $50B to $100B, and that happened mainly because of a spike in 2020.

View attachment 851858

• Saudi Aramco is in an industry facing secular decline towards extinction with no hope of long-term salvation, and their products are commodities with wildly variable prices. Tesla's rise will make this reality increasingly obvious over the next few years. It looks like the long-feared Peak Oil quietly happened in 2019 without much fanfare.

View attachment 851855

View attachment 851857

• Microsoft and Alphabet have similar financials with about $75B annual earnings growing about 40% per year or so. They've both been doubling earnings every 2-3 years. Excellent, but still much slower than Tesla. They also have good margins, but less than where Tesla will be in 2023 according to my projections.

So there really is no one and nothing stopping Tesla from becoming the world's most valuable company within the next two years in my opinion. When Tesla gets to Microsoft and Alphabet level earnings by around 2024 and are still showing growth above 50% per year, it's hard to see Tesla not shooting to #1 at around $3T market cap.

	Q1 2022	Q2 2022	Q3 2022	Q4 2022	Q1 2023	Q2 2023	Q3 2023	Q4 2023
Vehicle deliveries	310,048	254,695	371,752	489,457	578,123	668,171	735,556	813,516
Auto Rev excl ZEV creds	$ 16,182	$ 14,258	$ 20,804	$ 28,389	$ 34,109	$ 40,090	$ 44,869	$ 50,438
Auto CoGS	$ (11,322)	$ (10,521)	$ (14,672)	$ (19,073)	$ (21,951)	$ (25,026)	$ (27,159)	$ (29,602)
ZEV Credits	$ 679	$ 344	$ 420	$ 469	$ 469	$ 469	$ 469	$ 469
ZEV cred rev per veh	$ 2.2	$ 1.4	$ 1.1	$ 1.0	$ 0.8	$ 0.7	$ 0.6	$ 0.6
Auto Gross Profit excl ZEV creds	$ 4,860	$ 3,737	$ 6,131	$ 9,315	$ 12,158	$ 15,064	$ 17,710	$ 20,836
Avg Rev per Vehicle excl ZEV creds	$ 52.2	$ 56.0	$ 56.0	$ 58.0	$ 59.0	$ 60.0	$ 61.0	$ 62.0
Avg CoGS per Vehicle	$ (36.5)	$ (41.3)	$ (39.5)	$ (39.0)	$ (38.0)	$ (37.5)	$ (36.9)	$ (36.4)
Avg Gross Profit per Vehicle excl ZEV creds	$ 15.7	$ 14.7	$ 16.5	$ 19.0	$ 21.0	$ 22.5	$ 24.1	$ 25.6
Gross Margin excl ZEV creds	30.0%	26.2%	29.5%	32.8%	35.6%	37.6%	39.5%	41.3%
Auto Rev	$ 16,861	$ 14,602	$ 21,223	$ 28,857	$ 34,578	$ 40,559	$ 45,338	$ 50,907
Auto Gross Profit	$ 5,539	$ 4,081	$ 6,551	$ 9,784	$ 12,627	$ 15,533	$ 18,178	$ 21,305
Avg Rev per Veh	$ 54.4	$ 57.3	$ 57.1	$ 59.0	$ 59.8	$ 60.7	$ 61.6	$ 62.6
Avg Gross Profit per Veh	$ 17.9	$ 16.0	$ 17.6	$ 20.0	$ 21.8	$ 23.2	$ 24.7	$ 26.2
Auto Gross Margin	32.9%	27.9%	30.9%	33.9%	36.5%	38.3%	40.1%	41.9%
Research & Development	$ (865)	$ (667)	$ (700)	$ (735)	$ (772)	$ (811)	$ (851)	$ (894)
Selling, General & Administrative	$ (992)	$ (961)	$ (990)	$ (1,020)	$ (1,050)	$ (1,082)	$ (1,114)	$ (1,147)
Restructuring & Other	$ -	$ (142)	$ -	$ -	$ -	$ -	$ -	$ -
Total Operating Expenses	$ (1,857)	$ (1,770)	$ (1,690)	$ (1,755)	$ (1,822)	$ (1,892)	$ (1,965)	$ (2,041)
OpEx as % of Auto Gross Profit	34%	43%	26%	18%	14%	12%	11%	10%
Energy Generation and Storage Rev	$ 616	$ 866	$ 1,299	$ 1,949	$ 2,923	$ 4,384	$ 4,823	$ 5,305
Energy Gen and Store Cost	$ (688)	$ (769)	$ (1,077)	$ (1,507)	$ (2,261)	$ (3,391)	$ (3,730)	$ (4,103)
Energy Gen and Store Gross Profit	$ (72)	$ 97	$ 222	$ 441	$ 662	$ 993	$ 1,092	$ 1,201
Energy Gen and Store Gross Margin %	-12%	11%	17%	23%	23%	23%	23%	23%
Services & Other Rev	$ 1,279	$ 1,466	$ 1,616	$ 1,766	$ 1,916	$ 2,066	$ 2,216	$ 2,366
Services & Other Cost	$ (1,286)	$ (1,410)	$ (1,530)	$ (1,650)	$ (1,770)	$ (1,890)	$ (2,010)	$ (2,130)
Services & Other Gross Profit	$ (7)	$ 56	$ 86	$ 116	$ 146	$ 176	$ 206	$ 236
Services & Other Gross Margin %	-0.5%	3.8%	5.3%	6.6%	7.6%	8.5%	9.3%	10.0%
Income Tax provision	$ (346)	$ (205)	$ (600)	$ (1,200)	$ (1,700)	$ (2,200)	$ (2,500)	$ (3,000)
Share count fully diluted (B)	3.471	3.465	3.519	3.573	3.627	3.681	3.735	3.789
GAAP Net Income	$ 3.32	$ 2.26	$ 4.57	$ 7.39	$ 9.91	$ 12.64	$ 15.04	$ 17.73
GAAP Earnings per Share	$ 0.96	$ 0.65	$ 1.30	$ 2.07	$ 2.73	$ 3.43	$ 4.03	$ 4.68
Non-GAAP Earnings per Share	$ 1.08	$ 0.76	$ 1.40	$ 2.17	$ 2.83	$ 3.53	$ 4.12	$ 4.77

Neither investment nor financial advice. Just my model.

Excellent post. Just want to highlight some numbers based on these estimates:

Deliveries growth Q2->Q4 = 92%
Revenue growth Q2->Q4 = 97%

Deliveries growth 2022Q2->2023Q2 = 162%
Revenue growth 2022Q2->2023Q2 = 177%

And Energy, Semi and FSD revenue should grow even more... Are we looking at a 100% growth over 6months and ~200% growth YoY?

 

[Discoducky]

Super quick drive with 10.69.2 and wow, massive improvements, no, none, zero safety issues.

Yes, it still hesitates.

Yes, it still jerks the steering wheel around as the blue line wiggles.

But, a huge step change in how it handles lefts. I can't wait to drive more tomorrow with several roundy's and UPLs.

Then a few more mannequin tests...

 

[insaneoctane]

https://twitter.com/x/status/1569427477688193026

Bullish for EVs, bullish for energy storage (I've been chomping at the bit for Tesla to sell Powerwalls a la carte), bullish for TSLA!

Does anyone else read this as bullish for 4860 ramp?

 

[Cosmacelf]

Does anyone else read this as bullish for 4860 ramp?

Not really. I took this to mean that third party battery cell manufacturers have finally ramped enough to supply Tesla with as many cells as they need, which is a first for at least the past five years. I think 4680 is on a parallel ramp. I'm not actually worried about 4680 ramp. Tesla has plenty of stuff to sell even if the 4680 ramps slower than it wants to. Remember that something like half of all Tesla sales use LFP cells, which is something that neither Tesla nor Panasonic make and isn't even a cylindrical cell. There are many many markets where Tesla isn't even selling the Model 3 into, and Powerwall sales have had to be held back due to cell availability.

 

[Big Time]

@Gigapress care to share your share price estimates for each quarter of 2023?

 

[Nolimits]

Does anyone else read this as bullish for 4860 ramp?

I interpreted it as that tesla has secured multiple sources for their batteries and their bet is turning out well. CATL, lg chem, byd, Panasonic and their internal 4680 cells.

Tesla needs ALL the batteries they can get their hands on.

 

[Gigapress]

@Gigapress care to share your share price estimates for each quarter of 2023?

I have no crystal ball but here’s a table like @The Accountant made. This one uses non-GAAP earnings and various possibilities for forward P/E ratio (not trailing twelve months).

NOT INVESTMENT ADVICE. SERIOUSLY.

	EPS Expectation	100	80	60	40
Q3 2022	$ 1.420	$ 570	$ 450	$ 340	$ 230
Q4 2022	$ 2.18	$ 870	$ 700	$ 520	$ 350
Q1 2023	$ 3.00	$ 1,200	$ 960	$ 720	$ 480
Q2 2023	$ 3.72	$ 1,490	$ 1,190	$ 890	$ 600
Q3 2023	$ 4.31	$ 1,720	$ 1,380	$ 1,030	$ 690
Q4 2023	$ 4.97	$ 1,990	$ 1,590	$ 1,190	$ 800

For reference, our forward P/E one week after earnings release for every quarter since Q1 ‘20. The lowest it’s ever gotten in a trading day was 48 in late May when TSLA touched $207 after $1.08 Q1 earnings.

208
172
133
266
181
123
139
89
68
91

I think if we see these ridiculous earnings then the P/E will most likely stay at 80ish instead of continuing to compress like it has since 2020. That would rocket TSLA well past $1000 by this time next year. I have a lot of calls spread across this time, the majority of which are for strikes in the $450-700 range.

 

[SOULPEDL]

Others have reported first impressions of 10.69, so I guess I should chime in as well.

It did great on roundabouts. Better than any previous version.

But I still had a lot of disengagements. Some would have put the car in a dangerous situation if I didn't take over.

My test for whether I should be exited or not has to do with usefulness. If FSD is useful on city streets like it is on the highway, I'm excited. But we aren't quite there. As of now, it's fun to play around with. But FSD on city streets is not yet useful..

I generally agree, for example, my wife disengages anywhere near a parking lot but all other streets OK.

As most here know, the Tesla Insurance rate is adjusted by your driving score. So the more I use FSD, the lower my insurance rate. Perfect score if FSD is engaged 100% even if I have to disengage briefly as a precaution. Sure, I could continue with my 98 score on the Y, maybe get it to 100, but it's not fun at all because they made it excessively difficult, for this reason I believe... make driving annoying.)

Thought experiment... imagine 1/10 cost for insurance when you rely on FSD. Or how about Free Insurance on FSD? As risk approaches zero, so should the cost to insure. But this goes both ways.

How about if Manual Driving costs as much as Legacy Insurance (which likely increases as the legacy market share shrinks). And if the others increase their rates, the incentive gap grows even wider. So, in the future, there could be both a bigger carrot to use FSD, and a bigger stick if you want to risk it.

 

[Bet TSLA]

From looking at TeslaFi, the pending 2022.20.15 (FSD Beta 12.69.2) installations are close to the total number there that have FSD Beta. One of my two FSD Beta cars got the update installed an hour or so ago (from 10.12.2). I'll give it a try in the morning.

From long experience I am expecting little to no net improvement, meaning some things will get better and some things will get worse.

Well, as it turned out I was favorably impressed by 12.69.2. Indeed, as I expected some things got better and some got worse, but on the whole it was noticeably better.

At a local hairpin turn it used to come to a complete stop a bit before the turn and after some hemming and hawing finally goes around it. Now it still comes to a complete stop, but spends less time sitting there and goes around with a little more assurance. So, still unusable if there's any traffic, but a bit better.

At one unprotected left it edged to the right side of the lane before the turn. What?

It did noticeably better on an awkward left turn that it used to approach too shallowly and had to jerkily adjust at the last moment.

In a school zone with lots of kids on the sidewalks it did not get spooked by all the pedestrians. And it stopped for some people about to cross in a crosswalk, then continued on slowly when they were about 3/4 of the way across. So not bad.

It continues to show very poor judgment on lane choice. For instance on one local divided heavily retail road with three lanes in each direction, it insists on being in the rightmost lane despite parked cars and cars constantly entering and exiting the road. A human would never drive in that lane for any distance, as it's asking for trouble. And on local streets with no lane markings it keeps centering itself in the drivable space, which means that parked cars make it weave around, which is usually stupid.

And it's regressed again on a right turn needed for me to get home. It slows, considers, and seems to decide to turn right about a quarter second after it runs out of room to do so. Truly annoying.

So, by keeping my expectations really low, I'm pleased with what I see. But it is just a small improvement, and there's no hope in hell that this drives itself most places in this calendar year.

 

[jw934]

An article and a 22-tweet thread summarizing Tesla’s plans for the next 5 years as presented by Martin Viecha during the Goldman Sachs tech conference.

In summary: every point has already been discussed here at length as far as I can tell.

https://twitter.com/x/status/1569607593747685376

 

[The Accountant]

Now updated with @petit_bateau and @Gigapress estimates.
I also have included Wall Street's Revenue and Margin expectations.
I will continue to update as more estimates arrive. There will also be revisions once final Deliveries are reported.

 

[Prunesquallor]

More energy. I’m good with that.

https://twitter.com/x/status/1569576858651598848

 

[Singuy]

That is somewhat biased data. The model 3 barely sold any models that year. If you looked at average selling price of Tesla cars in 2017 vs now it'll probably be lower now.

That kind of proves the point of the tweet. Model 3 was in production hell and most likely skewed the cost of building a car upwards because those few hundred threes had super negative margins.

So the majority of the cost reduction was from economy of scale, we all know that. Model 3 could have been stuck like Lucid and we all carry paper waste shares today if production hell was not solved.

 

[Christine69420]

CPI at 8.3% vs 8.1% expected.

 

[H Mak]

Dropping like a stone in pre market. Any news?

Edit. Oh, CPI

 

[TN Mtn Man]

Inflation up again (CPI numbers) and futures tanking. Just as people have been seeing in their everyday life. Thankfully fuel isn't as bad as it was a few months ago. Uncontrolled expansion of government spending seems to actually matter.

 

[henchman24]

Dropping like a stone in pre market. Any news?

CPI… market will tank.

 

[willow_hiller]

Just realized that the fact that a lot of FSD purchasers are on a single firmware version means we can use TeslaFi as a decent sample (n of 2,773) to analyze the characteristics of vehicles with FSD. We've read a lot about the FSD take rate declining, so you would expect the number of vehicles with FSD to decline linearly with model year, but the data isn't that clean:

Of course this data will be a bit noisy because it's not just who purchased FSD, but who was granted FSD Beta, but it's still interesting. If it's a representative sample of FSD purchasers, the data seems to show that the introduction of a new model generally drives FSD purchases higher. Obviously the introduction of the Model 3 around 2018 added a lot of vehicles to the fleet full stop, but the Model Y in 2020 and the Model S LR/Plaid in 2021 seemed to add modest bumps to FSD purchasers.

But maybe any price over $10k is a psychological barrier to purchasing, since the price rose to $12k in January 2022, and we do see a precipitous drop in 2022 model year vehicles.

 

[elasalle]

CPI at 8.3% vs 8.1% expected.

Ok we need to wait till Oct 4 more weeks.
(will convert some recent pigg(CC)y bank shares to leaps on the weakness ...) ... ++ and jan 25 options are out


+max Pain is 268, so we know where MM are now gonna try to take it ... CPI gave them a helping hand

 

[Zero CO2]

I’ve seen a few reports now against the overwhelming majority that say 10.69.2 is working wonderfully…..which makes me think the people have issues need to recalibrate their car and make sure their cameras are clean

recalibrate? was not aware this was required ... admittedly i don't have time to carefully read all the release notes for FSD Beta