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

[generalenthu]

Not seeing the 40% growth is the reason the share price is where it is at. Personally, I want Tesla to push the grown at the expense of margins. Keep up the 40% growth and the market will reward the stock price even if margins aren't that good.

Agree, this is where Amazon is at the extreme, growing but profitless. Dont think Tesla will do that, but if 50% growth for the next 3 years means a 20% Auto gross margin, I will take that. While these numbers seem to be too good to achieve, note that FSD revenue is likely falling directly to the bottomline (99% margin?) adding a couple of points.

Hypothetically Lets say Q4 is 25% Auto GM. Add 1-2% points for FSD revenue recognition and take out 6-7% points for lower pricing. So 20% Auto GM with 50% growth sounds achievable. For reference, Q3 was just shy of 28% Auto GM.

 

[Singuy]

I can assure you that Wallstreet is not viewing 40% annual growth and 25% margins as likely for the next 3 years in a row.
Current TTM PE ratio is 34. Three years of 40% growth, assuming gross profit margin at 25% nets the same net margin as now, due to efficiency, would put the PE at 12.5 at the end of 3 years for a company growing at 40%.

Not seeing the 40% growth is the reason the share price is where it is at. Personally, I want Tesla to push the growth at the expense of margins. Keep up the 40% growth and the market will reward the stock price even if margins aren't that good.

I posted earlier that wallstreet NEVER viewed Tesla to have an annual growth anywhere close to 40% and yet they were fine with Tesla being at 300+ dollars a share. If they did they would be buying Tesla up today because Tesla is actually beating all of their projected delivery numbers made from 1-2 years ago @ 10-20% higher ASP too!

 

[InTheMiddle]

I can assure you that Wallstreet is not viewing 40% annual grown and 25% margins as likely for the next 3 years in a row.
Current TTM PE ratio is 34. Three years of 40% growth, assuming profit margins at 25% could net equal net margins due to efficiency, would put the PE at 12.5 at the end of 3 years for a company growing at 40%.

Not seeing the 40% growth is the reason the share price is where it is at. Personally, I want Tesla to push the grown at the expense of margins. Keep up the 40% growth and the market will reward the stock price even if margins aren't that good.

Very much agree with this. Tesla has repeatedly communicated that they would push unit volume even at the expense of margins in the past, and I do not know to what degree they could have pushed additional demand in 2022 Q4 via even deeper incentives / announcing incentives earlier in the quarter, etc, especially due to various factors such as logistics as @MC3OZ references. However, with the wave now effectively unwound and 4 reasonably ramped factories across the globe, Tesla seems positioned to be able to closely control the sales-vs-margin tradeoff in 2023 Q1 and beyond. I'm hoping for the scales to be heavily tilted in favor of unit volume.

 

[JSML]

I'm looking forward for the day TSLA won't be treated like WSB stocks and instead "slow and steady wins the race" type of stocks

I sure don't look forward to that day. It would mean the large growth for Tesla is behind it. Those slow and steady wins the race stock have very low PEs.

 

[verystandard]

I sure don't look forward to that day. It would mean the large growth for Tesla is behind it. Those slow and steady wins the race stock have very low PEs.

You are right, I fixed this for you

I'm looking forward for the day TSLA won't be treated like WSB stocks and instead "slow and steady wins the race" type of stocks

 

[Ogre]

Didn’t see this posted here yet - and it is newsworthy - More proof of ‘the safest car made’ rating.

https://twitter.com/x/status/1610050371023429633

The Devil’s slide won’t take another family.

NOT TODAY SATAN!



It had to be said.

 

[wipster]

What is that, like 20 days of inventory?

It's vehicles in transit! Tired of the term inventory. The only reason it's referred to as inventory is that's where it's shown on the balance sheet. Most, if not all of these vehicles have been ordered by customers, who will take delivery when they arrive at their destination.

The OEM's build and ship unsold vehicles to dealers lots in hopes that customers will purchase them. That is what I consider inventory. Tesla are like the vehicles you have custom made at the factory and shipped to the dealer for delivery to you and you only.

Sorry for the diatribe, but after years of dealing with inventory, the use of the word to describe preordered vehicles in transit upsets me.

 

[wipster]

Link to petition to change language in IRA to include all versions of Model Y (currently 15,000 signatures as of this posting):

Sign the Petition

Fix the Inflation Reduction Act EV Tax Credit

www.change.org

Is that what I signed already?

 

[EVNow]

Tesla Economist absolutely jumping the shark.

https://twitter.com/x/status/1610038776646225920

Once you sell, you start hoping the SP goes down ...

 

[JustMe]

At least Elon won't take over this January earnings call and prattle on about something as out there as Optimus...right? Right?!?

People laugh because it’s such an absurd concern, but he did say that Optimus was Teslas top priority new product in development. . .

 

[Ogre]

Many here overreacting to today’s P&D report, mostly those with very lofty personal expectations and were ignoring/ridiculing the numerous reports out of china. FYI to those still not following what is happening in China: It will be worse in Q1 than Q4 there, they wont be over the short term slump until closer to quarter end at best.

Having said that - I am extremely positive at present. China issues are a short term concern that will soon pass, while Tesla demand in Europe, North America & ROW all remain strong, with plenty of extra demand coming in 2023 with the IRA & Model Y SR introduction proper, and Berlin continuing to ramp for European customers.

Also excited for the unexpectedly detailed announcement for the investor day. Curious that the current discount incentives in China end on Feb 28th, the day before the March 1st Investor day. Possibly a “HW4 now shipping” announcement at investor day?

Soft demand in China certainly exacerbates the issue. If local demand were as strong as it had been, they could dump a lot of that inventory on the docks into the local market. Not a full on “Wave”, but there is no point in them having stock on hand they could dump without added expense either.

 

[Ogre]

People laugh because it’s such an absurd concern, but he did say that Optimus was Teslas top priority new product in development. . .

I don’t know if I “Laughed” at that post, but it is ridiculous. Musk will almost certainly be on the year end call. There is a significant chance he will bring up Optimus.

You’d prefer a CEO who is most worried about engineering the books so next quarter’s results look good?

Musk makes long term plans. It’s what’s gotten Tesla to the place it is today.

I don’t understand people who want a CEO who thinks in the short term.

 

[Big Time]

They need to put the cybertruck and smaller car into production asap. If they need to build a new factory for the smaller car, might I recommend a tent?

 

[Singuy]

Once you sell, you start hoping the SP goes down ...

No bro, he said there's no confirmation bias here....lol.

https://twitter.com/x/status/1610039638290477056

 

[Singuy]

Soft demand in China certainly exacerbates the issue. If local demand were as strong as it had been, they could dump a lot of that inventory on the docks into the local market. Not a full on “Wave”, but there is no point in them having stock on hand they could dump without added expense either.

They can't, they are RHD cars.

 

[jerry33]

People laugh because it’s such an absurd concern, but he did say that Optimus was Teslas top priority new product in development. . .

Another car is not a new product.

 

[JustMe]

No bro, he said there's no confirmation bias here....lol.

https://twitter.com/x/status/1610039638290477056

Would you care to share your predicted arc of the TSLA share price this year?

 

[JustMe]

Another car is not a new product.

Interesting perspective. I hadn’t thought of it that way. So you think Elon/Tesla do not consider Tesla robotaxi, Semi, and $25k compact car as “new products?”

 

[Ogre]

No bro, he said there's no confirmation bias here....lol.

Had to mute him on Twitter, I don’t follow him but too many people arguing with him so I keep seeing this stuff myself. Frustrating.

They can't, they are RHD cars.

Oh snap. Doesn’t China have a postal service? My wife used to drive a RHD Saturn to deliver rural mail.

 

[Cattledog]

I don’t know if I “Laughed” at that post, but it is ridiculous. Musk will almost certainly be on the year end call. There is a significant chance he will bring up Optimus.

You’d prefer a CEO who is most worried about engineering the books so next quarter’s results look good?

Musk makes long term plans. It’s what’s gotten Tesla to the place it is today.

I don’t understand people who want a CEO who thinks in the short term.

We always want him to have vision, because not many non-founder CEOs do. But we also want him to have perspective, which many non-founder CEOs do, and its dreadfully dull but placates the people who manipulate the market.

So we want BOTH...

...because almost no one has that. And if you think you're going to be worth more than AAPL + SAR combined, you need both. I don't have both, but I don't claim to be able to lead a company to > $4T valuation. So pull on the big boy pants and step up as the generational visionary and a solid economist we know you are (please).