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

[Remster32]

$465 on 173m common shares is a valuation of $80.4, and 15x EBITDA means the per quarter EBITDA is $1.3b.

In Q4 I believe Tesla's EBITDA could be closer to $2b. If so then that is going to force a lot of valuations to be re-evaluated.

It's a little more complicated than that. Here's their calculations.

(In millions)
Est. 2022 EBTIDA: $11,250.2

Multiple: 15x
Implied EV: $168,753.59
Discount Rate: 20%
YE: 19 EV $97,658.3

(-) Debt $11,779.2
(+) Cash $2,967.5
(-) Minority Interest $551.3

Implied Market Cap $88,295.4
Share Count 190.0

Implied Share Price: $465

But yes, I agree all of the analysts will need to re-evaluate. Nobody is really taking into the account of the Model Y's impact a few years down the road.

 

[SteveG3]

I haven't spent much time modelling VIEs as I don't think it's a significant issue, but my understanding broadly is that c.50-75% of cash raised from VIE partners is repaid in year one with tax credit proceeds. The rest is repaid out of solar lease cash flows over 5-30 years, but should only be 20-30% of lease cash flows maximum in any year. So with solar lease cash flows at around $400m, this should only be around $100m obligation. Additionally for the redeemable interests ($551m), i presume under some circumstances and after a certain time the partners can ask Tesla to buy out their stake early.

Tesla has $6.3bn net solar lease asset book value on balance sheet, of which $5.1bn is in VIEs. Contracted cash flows over 30 years is likely closer to $10bn and then Tesla will also expect significant continued cash flows after end of lease. NPV of this varies significantly with your discount rate assumptions and estimates for post lease cash flows.
Of this $6.3bn book value, $1.3bn is the equity share owned by third parties. Against the $6.3bn book value Tesla has $2.2bn of non recourse debt.

So while VIEs could be a drain of cash, particularly the redeemable ones, Tesla still has c.$1.2bn of solar assets outside of VIEs and continued new solar sales, both of which it can continue to raise money from. Tesla also still has a significant equity value in its solar portfolio (in the $bns) and its solar portfolio could be a significant source of cash if Tesla chose to sell the entire portfolio (which would also remove the $1.3bn VIEs liabilities and $2.2bn non recourse debt). I think Tesla may do this once it has cross-sold Powerwalls to a significant % of its roof portfolio customers.

Many of Cunningham's numbers and calculations are obviously wrong, but I haven't spent time to fully understand Tesla's numbers.

very helpful ReflexFunds

 

[S3XY]

My first attempt at Technical Analysis. I see a Rainbow forming and we all know what's at the end of the rainbow.

 

[ZachF]

My first attempt at Technical Analysis. I see a Rainbow forming and we all know what's at the end of the rainbow.

View attachment 369120

... The Leprechaun?

 

[lklundin]

I'm in for buying everyone a real beer at $1000.

Beer prices have gone up a lot since I moved to here, but at 2000$ I will match that...

 

[Dan Detweiler]

What concerns me is that criminals are at work continuing to somehow stop the Tesla freight train. These criminals have ratcheted up the level of criminality to match the intensity of their growing financial pain. Where does it stop? Is there anything they wouldn't do to not lose?

Probably not, but their efforts are having less and less of an effect. Tesla's continued growth and success are the true short killers. At some point they will literally not be able to sustain their position and will quietly go away (heard anything from Jim Chanos lately?). Until then we just keep on keepin' on.

Dan

 

[SpaceCash]

Bears have ammo until Q1 report. They will say Q1 won’t be profitable because of less demand

They will always say something.

 

[Doit]

Just for the record, in case someone missed the news -- via @ValueAnalyst on twitter here is VGrinshpun linking to cnbc:

Vladimir Grinshpun‏ @VGrinshpun
$TSLA Where is $TSLAQ Potemkin Village team when one needs them? Executives pulled the plug on Infiniti QX Inspiration (

) after technicians apparently failed to revive it so it can be driven on the stage.

 

[anthonyj]

Just bought a $330 put weekly to help drive the price up. Thank me later. Maybe I’ll start a GoFundMe

 

[Starno]

Bears have ammo until Q1 report. They will say Q1 won’t be profitable because of less demand

Bears have ammo for still some time. Even after Q1 profitability, they'll say :

- That's it backlog is finished, demand is fading, sales are going to fall. So last time it is profitable.
- Model 3 was profitable only with dual motors, long range, P... once they introduce the SR, they won't be profitable anymore
- Tesla is profitable only because they don't pay their bills, and postponing suppliers expenses...
...

 

[Mobius484]

Please don’t fade into close...please don’t fade into close... I bought more yesterday at low of day. Slow accumulation on dips...... buy and hold baby...buy and hold..... long TSLA. Reading ark invests big ideas pdf last night. Very illuminating. 800 billion dollar energy storage market just sitting there waiting for TSLA to RUN and EAT it up!

Big Ideas 2019 — As Convergence Accelerates, Innovation Advances

 

[SteveG3]

It's a little more complicated than that. Here's their calculations.

(In millions)
Est. 2022 EBTIDA: $11,250.2

Multiple: 15x
Implied EV: $168,753.59
Discount Rate: 20%
YE: 19 EV $97,658.3

(-) Debt $11,779.2
(+) Cash $2,967.5
(-) Minority Interest $551.3

Implied Market Cap $88,295.4
Share Count 190.0

Implied Share Price: $465

But yes, I agree all of the analysts will need to re-evaluate. Nobody is really taking into the account of the Model Y's impact a few years down the road.

I think Tesla's earnings growth for the next decade forward will average about 25% per year (fwiw, this works out to going from about $8-$10 eps in 2019 to about $64-$80 in 2028, which is in line with what I've modeled in the past for 2026).

Last time I checked the PEG (price earnings/growth ratio) of the S&P 500 was between 1.5 and 2.0. This means using a PEG of 1.5 for valuing Tesla would be conservative compared to the market's valuation of the S&P 500.

Assuming 1) that conservative PEG of 1.5 for Tesla and 2) a 25% growth rate implies a PE of 37.5 for valuing Tesla. Using a PEG of 2.0 implies a PE of 50.

fwiw, as far as I'm concerned, all the "automaker or tech stock, how do you value Tesla?" chatter we often hear in the media is almost entirely a red herring to distract from what I've come to see (with some help from Peter Lynch) as the core to determining a reasonable PE... a company's expected growth rate.

 

[RobStark]

If the stock is trading in the mid-to-high $300s – say, $360ish – and there are bits within the ER data that give something for bears to sink their teeth into, however ephemeral that may be, such as low Q1 US deliveries, or high numbers of in-transit vehicles, I think it’s possible we may not get the pop for which we’re hoping post ER call.

Tesla never gives national or regional sales numbers.

There will be only Q1 Deliveries. No US Deliveries,European Deliveries nor Chinese Deliveries.

The closest they have every come is " about 17% of revenue came from China "

 

[TradingInvest]

Bears have ammo for still some time. Even after Q1 profitability, they'll say :

- That's it backlog is finished, demand is fading, sales are going to fall. So last time it is profitable.
- Model 3 was profitable only with dual motors, long range, P... once they introduce the SR, they won't be profitable anymore
- Tesla is profitable only because they don't pay their bills, and postponing suppliers expenses...
...

Who cares about the shorts? Just save cash, add more shares if they manage a dip.

 

[MartinAustin]

TSLA appears to be in a nice climb, post-Brexit vote. (I have been wrong about this sort of thing more than half of the time)

In other news... if you want to have a Schadenfreudian giggle... check this out
Driverless car laser ruined camera

 

[Tslynk67]

I would predict that the good ol' U. S. of A.'ll flip amazingly quickly (like in the next election cycle <2 years) to get on and lead the green tech revolution now that the economics are there & the cost of new energy generation from wind & solar are less than fossil fuel alternatives. Among the various freedoms (...of speech, ...of religion, etc.) we're founded on, freedom to make a buck is one of the most powerful and enduring. Moreover, public sentiment here is often in favor of many progressive things regarding energy and the environment that are common sense to people on this board but have been partially held back by too much money in the political system that's protecting the status quo & old wealth. That facade will crumble as green tech, economics and job creation take over with tesla in the vanguard here & abroad as GF3, GF4, GF5, etc. sprout in logical places on the various continents. One of my favorite Churchill quotes here is apropos, though i wish it weren't so, "you can always count on the Americans to do the right thing...but only after they've exhausted all the other possibilities"

I would like to think so and hope that this current *sugar*-storm is looked back as a one-off outlier even in American politics...

Regardless of anything else, it makes economic sense to invest in renewables and to mitigate the effects of climate change.

If only politicians could see farther than their terms...

 

[AudubonB]

MOD:
To Brexit,
To Brexit,
See if they renege.
Then come back to this thread, jiggety-jig.

a little while later....

Recent BREXIT posts moved to Brexit.

Guess what? I meant it! It's too important yet complex a topic to mess up this one.

Won't move any more - they'll just be deleted.

 

[Unpilot]

Power Hour...lets she if she climbs...or fades.

 

[schonelucht]

Tesla never gives national or regional sales numbers.

There will be only Q1 Deliveries. No US Deliveries,European Deliveries nor Chinese Deliveries.

The closest they have every come is " about 17% of revenue came from China "

Not true. They give exact regional revenue. (US/China/Norway/ROW)

 

[Johann Koeber]

Supercharging in Germany costs 0.17 Euro per minute up to 60 kW, above that 0.34 Euro per minute Schnellladen an Superchargern

I made a little graph to show the cost per kWh depending on charging speed. It shows that supercharging costs less than 0.31 Euro per kWh (my residential rate including fixed costs) at all times - unless the charging rate sinks below 33 kW. At this time you should leave the Supercharger and head to the next one. On road trips I seldom charge the battery that far; usually I leave when the charge rate drops below 100 kW.

Conclusion: cost of Supercharging is in line with electricity cost here in Germany. Tesla is delivering a great service to the customers, without aiming for a profit. The reliability, availability, uptime and timely information on Supercharger availability is unmatched. Great prospects for Tesla sales in Germany in the coming months. TSLA is set for a great rally.