Excellent post. Just want to highlight some numbers based on these estimates: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:
Here are the rough numbers for Amazon before the recent slowdown in the last year:
- 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
Growth
Revenue: 30% per yearEarnings per share: 80% per yearOperating Income: 80% per yearMargins:
Gross: 42%Operating: 4 to 6%
Income:
Gross: $200BOperating: $30B
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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?
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Companies ranked by Market Cap - CompaniesMarketCap.com
Ranking the world's top companies by market cap, market value, revenue and many more metricscompaniesmarketcap.com
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- 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.
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- 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.
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- 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.
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?