I recommend starting here:
After that I recommend this:
Value Investing: from Graham to Buffett and Beyond and
Competition Demystified: A Radically Simplified Approach to Business Strategy
These books are blatantly about Value Investing. The basic problem is how to define 'value'.
@The Accountant uses a traditional (in value investing terms) assessment of earnings quality with, in Tesla's case, not emphasizing debt coverage because Tesla has negligible debt. I'm sure he'll speak up if I seem to represent him.
disclosure: I am a graduate of Columbia Business School, where value investing has been a constant message since Graham and later, Dodd. That includes considerable attention to derivative and option pricing, although Value Investing and Speculation are opposite poles, with Momentum following closely on speculation. From an institutional investor perspective value forecasts mostly cede to rating agencies and advisory services; notable exceptions are strict adherents of value investing such as Ron Baron (who actually never had academic background in the investment philosophy he follows.
All this may seem irrelevant to the forecasting methodology one chooses. As several people point out the discount rate is one crucial point (In Value Investing the discount rate is meant to be the 'blended incremental cost of capital' but most Wall Street 'analysis' uses arbitrary numbers.)
One major problem with forecasting methodology is to accurately cost equity, and that is very hard to do without a regular track record of primary offers. In Tesla's case new issuances would be silly because of the cash generating nature fo the business. However, it's equally obvious that the Tesla cost of equity would be very, very low. We also do not know what Tesla cost of debt would be since the only debt they have offered recently has been lease and loan securitizations. An added complication is that Tesla has unusual pricing power so can anticipate regulatory pressure. Hence setting the proper discount rate for tesla is not easier, either.
The largest problem in forecasting Tesla is that there is no precedent. Many of us try with the 1910's Ford, Amazon, Google, Apple etc. We almost never think of Xerox, Kodak, Kaiser etc. We are just beginning to try to consider Tesla Energy, Supercharger network, used car sales as potentially material factors.
Hence long forecasts are important, but fraught more in Tesla's case than in many. Even the competitive outlook is largely imagined but not yet really in evidence. That is only exacerbated when we consider key executive risk (Elon is not the only one), regulatory impediments and the overwhelming climate risks.
Nobody has published much about how to value a company with a ~50% growth rate, several months of backlog and lack of presence of any kind in half the world. That is probably why we obsess on the things we can know, and why we want good critical thinking rather than FUD.
As for blended capital cost, at present and for some time, Tesla manages to
have positive cash flow even while growing at >50% per year and starting new technologies, new factories at the same time. That is unheard of; I know of no such case ever, anywhere. Thus the cost of financing for Tesla is now negative since they are realizing sales before they must pay suppliers. That, in turn, keeps their supplier costs very low.
So, to be accurate in these circumstances the discount rate for Tesla would likely be roughly equal to the inflation rate in major supplier countries and major sales countries. Not precise but close, Tesla has roughly equal exposure in US dollar (9.1%), China (3.0%) and Eurozone (8.6%). Blending those would yield average inflation of 6.9%, so as good a discount rate as we might have.
FWIW, nobody so far is using such a low discount rate. Why? Because they all seem to think Tesla is somehow higher risk than may be others. Personally I think the positives for Tesla outweigh all the questions so I'd discount at 6.9%.
So the higher the discount rate the shorter the term value chain will be. By choosing the one I do, forward values really go at Plaid speed, which as we know from Spaceballs, is very high risk.
That is our dilemma. The facts seem too optimistic. It seems wildly implausible. Yet such things have happened, but most of them were a century ago or more. Thus our realistic analogues are probably Amazon and Apple. If this approach to Tesla is wrong, we'll have much more serious problems than correct valuation of securities.
Obviously all this is my opinion, driven by decades of experience and study. A huge caveat is that I would never, ever vote for anybody within a decade of my age. That may apply to my investment approach too, although I don't think so. Old and opinionated, I am.