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

[LN1_Casey]

The Fed is only buying investment grade bonds - Moody's has screwed us yet again with their lethargic rating system.

Speaking of Moody’s, have they already or do they still need to make an upgrade of Tesla?

 

[CorneliusXX]

Ron Baron in 2017:

Ron Baron also says $10k by 2030. I don't see any reason why he might be wrong, not that I'm a billionaire investor or anything.

Ron estimated a $1k share price in 2020 off $70bn in revenue. We'll do about half that this year.

 

[CorneliusXX]

Speaking of Moody’s, have they already or do they still need to make an upgrade of Tesla?

Moody's affirms Tesla B3 corporate family and Caa1 senior unsecured ratings; outlook is stable.

New York, August 20, 2019 -- Moody's Investors Service ("Moody's") affirmed Tesla, Inc.'s ratings including the B3 Corporate Family Rating (CFR) and Caa1 senior unsecured ratings, and changed the speculative grade liquidity rating to SGL-3 from SGL-4. The outlook changed to stable from negative

The rating needs to increase from B3 to Baa3 to reach investment grade. which is quite a few upgrades.

Bond credit rating - Wikipedia

 

[ggr]

That's a 50% increase in range in 8 years while the MSRP of the top spec hasn't increased (going by internet searches, 2012 pricing is difficult to find). In that time there's been a 17% increase in inflation - so that's a 77% increase in range per $.

This ignores the benefits of having standard dual motors, a 2s increase in 0-60, vastly superior software, upgraded electronics, the entire supercharging network, etc, etc.

About the only items that are worse are the lack of unlimited free supercharging (although as mentioned above, the network was non-existent at the start of 2012) and residual value guarantee.

<<==== VIN 00029, Signature Model S Performance, with basically every option except for the rear-facing extra seats, and with the very rare factory custom paint ('68 Cadillac Lavender Mist), with CA sales tax, was $119401. The current lowest end Model S beats it in every performance metric you can think of, except for the color. No residual value guarantee, that came later. Max 90 kW supercharging, which also came later. Taking it in tomorrow to have the brake fluid replaced and bled.

 

[LN1_Casey]

Moody's affirms Tesla B3 corporate family and Caa1 senior unsecured ratings; outlook is stable.



The rating needs to increase from B3 to Baa3 to reach investment grade. which is quite a few upgrades.
View attachment 552110
Bond credit rating - Wikipedia

It’s amazing to me that it’s still so low. What’s the likelihood of a multilevel upgrade?

 

[CorneliusXX]

It’s amazing to me that it’s still so low. What’s the likelihood of a multilevel upgrade?

It's not uncommon for multilevel upgrades, but trying to figure out when Moody's will make the change is anyone's guess. Perhaps they're waiting for full year profit or S&P500 inclusion so they have some arse covering for the upgrade.

It's already difficult to justify such a poor credit rating IMO, but as a comparison see below.

 

[qphan79]

That's a 50% increase in range in 8 years while the MSRP of the top spec hasn't increased (going by internet searches, 2012 pricing is difficult to find). In that time there's been a 17% increase in inflation - so that's a 77% increase in range per $.

This ignores the benefits of having standard dual motors, a 2s increase in 0-60, vastly superior software, upgraded electronics, the entire supercharging network, etc, etc.

About the only items that are worse are the lack of unlimited free supercharging (although as mentioned above, the network was non-existent at the start of 2012) and residual value guarantee.

The amount of progress and improvement in the Model S alone blows my mind. I had a very early Model S 60kwh that was somewhere around $75k. What you get now for $75k is just staggering in comparison.

8 years is not that much longer than your average ICE car generation, and even then it’s mostly exterior styling changes and incremental changes “under the hood”. What Tesla is about to accomplish in the next 2-3 years will be breathtaking!

 

[Artful Dodger]

Trillion dollar infrastructure bill. That's about 400 miles of nyc subways pre-market likes
Trump Team Weighs $1 Trillion for Infrastructure | Bloomberg 2020-06-16

The Market 'Likes' indeed:

Nasdaq-100 Futures 9,907.50 +119.00 +1.22% 01:53:11

If the NASDAQ-100 were to hold at that level, and TSLA moved at only 1:1 with the macros, then we'd expect an Open on Tuesday somewhere around $1,002.99

Cheers!

 

[Mike Smith]

$1010 in German pre-market

Produits de Bourse

 

[Bet TSLA]

About the only items that are worse are the lack of unlimited free supercharging (although as mentioned above, the network was non-existent at the start of 2012) and residual value guarantee.

The smaller frunk that came with AWD, and loss of the sunroof are meaningful downgrades as well, but not nearly as important as the many improvements. Also, while the premium connectivity was supposedly for a limited time originally, Tesla never cut it off, while nowadays it's a subscription.

 

[Mo City]

Question for those who are awake when the NASDAQ pre-market opens at 3:00 a.m. Eastern:

Does it usually just follow the Frankfurt TL0 price or more often completely disregard it?

 

[CaliBear1]

After freeing up some money in my IRA account I bought a few more “solidarity” shares at $915 yesterday. I steeled myself for a precipitous drop, calm in the knowledge that I won’t touch these shares and the rest of my retirement account TSLA until 2024. Still, what a pleasant surprise to see them pop to $990. For now, cheap thrills.

 

[Mike Smith]

Question for those who are awake when the NASDAQ pre-market opens at 3:00 Eastern:

Does it usually just follow the Frankfurt TL0 price or more often completely disregard it?

Nasdaq pre-market opens at 4:00. It definitely changes, but it gives a much better indication of where pre-market will open than the previous close. I'd say it usually opens within 10 dollars of Europe if there's after-hours news, much closer if there isn't.

 

[jhm]

$1010 in German pre-market

Produits de Bourse

Can someone tell the Germans not to bid up the price of Tesla? Buyers in the US want a whack at good prices in the morning. Thanks!

 

[Artful Dodger]

The smaller frunk that came with AWD, and loss of the sunroof are meaningful downgrades as well, but not nearly as important as the many improvements. Also, while the premium connectivity was supposedly for a limited time originally, Tesla never cut it off, while nowadays it's a subscription.

I still think Tesla will offer a fast-swappable bty upgrade to the new-tech 'roadrunner' bty (Model S was originally demonstrated with fast bty swapping capability).

Once the new tech becomes available in the Plaid S, and when early Model S are due for age/wear related pack replacement, it'd be an awesome perk for existing 'S' owners to upgrade to 'roadrunner' batts. So maybe 2 more years for those early Tesla Model S builds?

And the same would apply to Models X beginning around 2025, around when early builds turn 10 yrs old. Coupled with the 'never-rust' aluminum body work, Models S/X easily could have 20-30+ yr service lives.

Cheers!

 

[LN1_Casey]

Question for those who are awake when the NASDAQ pre-market opens at 3:00 a.m. Eastern:

Does it usually just follow the Frankfurt TL0 price or more often completely disregard it?

From my stalking, it's most often disregarded. It does give some carry over sentiment, and some newly released info such as Q numbers released, but often it'll jump up or down as soon as pre-market pops.

 

[wipster]

I predict a new high tomorrow!

Or maybe that's just me... see ya at 4:20!

 

[Todesbuckler]

I think Wall Street hasn't even fully realized what Shanghai phase 1 and Model Y will do to Tesla's financials, let alone Shanghai phase 2, let alone Berlin/Texas.

Tesla can produce ~175k vehicles per quarter as of the end of Q1, but due to COVID-19 it's going to take until Q3/Q4 until it'll show up in the financials.

I posted about this 2 weeks ago, but my bearish expectation for Q4 beats the most bullish analyst's expectation, and is way way above the average analyst's expectation.

Wall Street's expectations for Q3/Q4 are at about the same level as Q4'19 results, with only revenue being marginally higher.

I strongly agree with you Frank. Based on the results of my financial modeling, I was as well quite confused about the low analyst consensus for Q3 & Q4 2020. Based on the current available information set and expectations about the near-term future (e.g. no further production shutdown), I estimate a full year non-GAAP EPS of 12.2 Dollar vs. ~4 Dollar analyst consensus. It might be that the consensus is negatively affected by outdated analyst reports assuming an ongoing production restriction, but even in this case the difference seems to be too much.

For 2021, I forecast a non-GAAP EPS of around 30 Dollar (roughly in the ballpark of your bear/bull estimates, Frank) vs. ~11 Dollar analyst consensus. Personally, I even see further upside potential on a gross margin level, e.g. through China production efficiency and autonomous driving revenues.

 

[Dutchie]

I am curious to see when people think we will first hit $2000 / share?

So I made a poll:

When will TSLA first reach $2000 / share - StrawPoll

Please vote!

Bit of a tricky one. I think - if it where to happen this year, early next year - the catalyst would be Full Self Driving progress. Contrary to the general sentiment, also here on TMC, Tesla/Elon are highly optimistic about Feature Complete soon and implementation of Robotaxi not far after that. The retrofitting of the FSD computer in older models is in full swing and price of FSD will go up in a couple of weeks. My gut feeling is that something is going to happen soon and it will be revolutionary.
If that happens and we see something awe-inspiring, similar to the two SpaceX booster landing simultaneously, then we will very soon crack the $2000 price.

One thing I am certain of is that crossing the $2000 from $1000 will happen sooner than crossing the $1000 since IPO date.

 

[MC3OZ]

I still think Tesla will offer a fast-swappable bty upgrade to the new-tech 'roadrunner' bty (Model S was originally demonstrated with fast bty swapping capability).

Once the new tech becomes available in the Plaid S, and when early Model S are due for age/wear related pack replacement, it'd be an awesome perk for existing 'S' owners to upgrade to 'roadrunner' batts. So maybe 2 more years for those early Tesla Model S builds?

And the same would apply to Models X beginning around 2025, around when early builds turn 10 yrs old. Coupled with the 'never-rust' aluminum body work, Models S/X easily could have 20-30+ yr service lives.

Cheers!

I'm with you here Dodger, if we assume Roadrunner tech eventually means Tesla is no longer cell constrained, and if all those old packs can be recycled to make new batteries..

If Roadrunner supports V2G, and Tesla has working RoboTaxis, or expects to have them, the limiting factor is now may be how quickly Tesla can produce car bodies...

Some old Model S may be able to be upgraded to Roadrunner and V2G, newer models might be able to be upgraded to Roadrunner, V2G and support for RoboTaxi software..

Recycling the old batteries and reusing the old car bodies is very efficient and desirable in from an environmental point of view... and Tesla might be able to make money doing it...

The only caveat is service needs to be able to support all the battery swaps,,, luckily the fleet size was a lot smaller back in 2012-2014.. anyway this is something that can be booked and scheduled.

Again the ideal here, is put you old car out to work as a RoboTaxi, buy a new car, when the RoboTaxi needs it, buy it a new battery and have 2 x V2G... If the Robotaxi is out working not much opportunity to plug it in at home.. but it may come in handy..