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

[Chunky Jr.]

Personally, I don't take analyst projections to 2030 very seriously. A lot can change between now and then, including products under development we have no clue about. In 2003, any Apple analysts projecting out to 2010 would have been incredibly wrong due to the iPhone coming out in 2007 that no one anticipated at the time.

 

[EVMeister]

It is easy to criticise others' forecasts, but maybe it is better to share ones own and show why one thinks that.

I wasn't criticising his forecast as I feel he justifies his price target and it fits his model. I don't model myself, but I've seen many models for TSLA past and present. I would personally be very disappointed with <12% stock price appreciation per year. I don't expect a smooth ride up, but this is a once in a lifetime company growing unlike any other with its fingers in many pies. And to me that doesn't align with that sort of meager stock price appreciation. The stock price has proven many conservative analysts embarassingly wrong in the past and I expect it will continue to do so.

 

[StarFoxisDown!]

Personally, I don't take analyst projections to 2030 very seriously. A lot can change between now and then, including products under development we have no clue about. In 2003, any Apple analysts projecting out to 2010 would have been incredibly wrong due to the iPhone coming out in 2007 that no one anticipated at the time.

Sure there could be plenty of unknown products from Tesla between now and 2030.

But the big difference between the example you gave and Tesla is Tesla's roadmap is pretty clear on already announced products - FSD, Energy, Cybertruck, Gen 3, and Optimus. Now if you're in the camp that thinks Tesla succeeds on at least two thirds of that roadmap, Tesla will easily be in the 2 trillion market cap group,if not 3 trillion by 2030.

If you're in the camp that thinks Tesla won't succeed on the majority of those, then Tesla won't be a 2 trillion dollar company come 2030.

 

[Drumheller]

If I thought TSLA would only gain less than 12% per year, I would invest elsewhere. I've had better growth than that in a 401k with restricted mutual funds and expenses.

12% per year through 2030 is a very bearish view.

 

[Drumheller]

Sure there could be plenty of unknown products from Tesla between now and 2030.

But the big difference between the example you gave and Tesla is Tesla's roadmap is pretty clear on already announced products - FSD, Energy, Cybertruck, Gen 3, and Optimus. Now if you're in the camp that thinks Tesla succeeds on at least two thirds of that roadmap, Tesla will easily be in the 2 trillion market cap group,if not 3 trillion by 2030.

If you're in the camp that thinks Tesla won't succeed on the majority of those, then Tesla won't be a 2 trillion dollar company come 2030.

2 trillion is only a 2.3x from current value. That's really all you anticipate in 7 years with this company?

 

[StarFoxisDown!]

2 trillion is only a 2.3x from current value. That's really all you anticipate in 7 years with this company?

No, not at all. I said easily a 2 trillion dollar company and most likely a 3-4 billion company if they succeed on two thirds of their already announced roadmap.

I was simply pointing out that valuation with TSLA really just comes down to whether you believe in the roadmap or not. There might be further products announced for the roadmap in the next few years that pushes up that valuation even more by 2030

 

[Drumheller]

In all seriousness, I'm thinking at least 10 trillion valuation by end of 2030 and won't be surprised if I look back and laugh at how low that is. I think many people really do not understand the potential of A.I., FSD, and Optimus.

 

[StarFoxisDown!]

In all seriousness, I'm thinking at least 10 trillion valuation by end of 2030 and won't be surprised if I look back and laugh at how low that is. I think many people really do not understand the potential of A.I., FSD, and Optimus.

Simply put if Tesla AI succeeds then all bets are off in terms of valuation by 2030. If FSD succeeds then that Optimus succeeds which in turns, means Tesla general purpose AI succeeds.

I try not to put much focus on valuation if that scenario comes to pass because the range of potential valuation would be so great depending on how Tesla chooses to monetize, it boggles the mind.

 

[Singuy]

He also has a highly ambitious stock price estimate of $720 in 2030? That's <12% stock price appreciation per year, I think he might be a bit pessimistic with that.

Gary on a recent podcast said he does not add autonomy or robotics in his valuation until he has a clear picture of TAM and demand. He does not speculate on supply side valuation as if Tesla will have 100% marketshare.

 

[Artful Dodger]

what TSLA has done in the last 1 year and 3 quarters (specifically to grow their EPS from $0.30 to over $3.50) took AAPL 11 years to do (2009-2020). Impressive.

You can't talk about growth in earnings per share w/o also including the share count growth. EPS growth was 6% CAGR for AAPL, but how much did their share count grow? Any Splits? TIA.

 

[DTG_]

If I thought TSLA would only gain less than 12% per year, I would invest elsewhere. I've had better growth than that in a 401k with restricted mutual funds and expenses.

12% per year through 2030 is a very bearish view.

SPX average return is 10%/y historically afaik, maybe lower. The fact that you personally had bigger returns during the previous 10 year bull run is irrelevant for the future outlook imo.

While I would love to see tsla at a 2t valuation or more soon (I'd divest some to build an amazing house before my 30's), at the end of the days stocks are valued on earnings and presumed future growth. Take one of the two out and you're left struggling. We can all talk and mentally masturbate about robot chaffeur, fsd coast to coast, 20m vehicles, but we also need to see el dinero coming in. Let's see on the 19th.
My personal rule of thumb is to seriously include a part of a business into its valuation only when it's generating income. Until that, do still consider it, but at a distance, if that makes sense.

 

[Singuy]

What do you think the EPS might look like in 2030 ? Do you think it might justfy a $720 shareprice ? Why ?

Wearing very rosy spectacles one can compute the following:

View attachment 954384
View attachment 954385

And that does not necessarily give $720 .... but can be anywhere from a low of $383 (no further growth) to a high of $2495 (lots more growth) depending on what you think comes next.

View attachment 954386

It is easy to criticise others' forecasts, but maybe it is better to share ones own and show why one thinks that.

How did you get a 1.1 trillion valuation with a net income of 216 billion on 1.3 trillion dollar revenue (assuming no growth)?

You realize Ford has a Pe of 6 or 7 because they pay out 8% div while Walmart has a much higher PE and they pay very little div. Both companies has no growth.

 

[Drumheller]

SPX average return is 10%/y historically afaik, maybe lower. The fact that you personally had bigger returns during the previous 10 year bull run is irrelevant for the future outlook imo.

While I would love to see tsla at a 2t valuation or more soon (I'd divest some to build an amazing house before my 30's), at the end of the days stocks are valued on earnings and presumed future growth. Take one of the two out and you're left struggling. We can all talk and mentally masturbate about robot chaffeur, fsd coast to coast, 20m vehicles, but we also need to see el dinero coming in. Let's see on the 19th.
My personal rule of thumb is to seriously include a part of a business into its valuation only when it's generating income. Until that, do still consider it, but at a distance, if that makes sense.

And if we all target the average spx growth, we may as well buy index funds and forget about investing in specific companies.

 

[Artful Dodger]

He also has a highly ambitious stock price estimate of $720 in 2030? That's <12% stock price appreciation per year, I think he might be a bit pessimistic with that.

That's 14.74% CAGR compared to 11.88% for S&P 500 historical gains (1950-2021). Gary's model has no value in 2023 for FSD, robotaxi, or humanoid robot, and just 5% currently for Tesla Energy (megapack, powerwall). Gary won't model FSD because (hand-wringing follows) "nobody includes the demand side, just the supply side. Show me a formula for TAM". This is just lazy or cowardly. I suspect a bit of both.

Gary should realize this was also Google's business plan when they started: "let's figure out Search, and we'll figure out a way to monetize it later". How'd that work out for Larry and Sergey? Or for early Google investors? So what is the demand for "Search" (or for "Labor")? Oh, that's right, they have no natural limits:

Marginal propensity to consume - Wikipedia​

E49: Tesla Stock Just Getting Started with Gary Black | Cyber Bulls | (2023-07-07)

Cheers to the risk-takers 2-robot households!

 

[Artful Dodger]

In all seriousness, I'm thinking at least 10 trillion valuation by end of 2030

So then ... only 38.5% CAGR? Ya woooss.

I'm at $18.2T TSLA mkt cap by end of 2030 @ 50% CAGR.

Cheers to the Big Dreamers!

 

[Christine69420]

Tesla has just started selling cars in Malaysia. Perhaps they want to do more?

The Malaysian Prime Minister Datuk Seri Anwar Ibrahim said yesterday:

"Elon Musk has asked to meet next week to discuss with me the possibility of him increasing his investments in Malaysia," he said during a meeting session with state civil servants at MBS Hall here."

Anwar to meet Elon Musk to discuss further investments in Malaysia

 

[Knightshade]

Sure they've priced it in: Hedgies' analyst Toni Sacconaghi | Bernstein already when on CNBC and said it's nothing, no benefit to Tesla. Yup, just like owning all those gas stations is no benefit to Exxon...

15 years ago they decided it wasn't of any benefit

Exxon to exit U.S. retail gas business

Exxon Mobil Corp <XOM.N> said on Thursday it is getting out of the retail gas business in the United States as sky-high crude oil prices squeeze margins.

www.reuters.com

 

[M|S|M MYP]

If I thought TSLA would only gain less than 12% per year, I would invest elsewhere. I've had better growth than that in a 401k with restricted mutual funds and expenses.

12% per year through 2030 is a very bearish view.

You are saying better growth in certain years and not an avg of 12% yearly correct? Because if it was 12% avg minus expenses over a course of 10+ years, please share the mutual fund names

 

[petit_bateau]

How did you get a 1.1 trillion valuation with a net income of 216 billion on 1.3 trillion dollar revenue (assuming no growth)?

You realize Ford has a Pe of 6 or 7 because they pay out 8% div while Walmart has a much higher PE and they pay very little div. Both companies has no growth.

I've shown pretty much all the workings in the tables I've already posted so it is all very mechanistic really. Below the only extra thing I have done is to put the corresponding mkt caps in the right hand column to help. (Excuse the overly precise decimals )

The low-end valuations arise if Tesla reaches 2030 and goes zero growth. The two low-end shareprices are just a NPV calc looking forwards 10-years on two different discount rate assumptions in that zero-growth scenario.

The high end valuation is what arises if one sets PE to 40x which implies continued good growth from 2030 on.

All three of these scenarios assume that Tesla arrives at 2030 with all volume targets met, and all segment GM% in a much healthier state than they are today. The point being that these are very much the success case. (That other chap - Gary Black - seems to assume a scenario where Tesla does not reach the 20m cars/yr in 2030, whereas these do assume 20m in 2030).

For perspective a $10 trillion mkt cap would likely be 5% of total global market value at that point. From memory global total mkt cap is approx $100 trn now, so a doubling to $200 trn over 10-years would represent 7% growth. So if Tesla had a $10 trn market cap in 2030 it would be 5% of the 2030 global valuation. By comparison Apple is now 3% of global valuation in round numbers.

I'm sure all of these scenarios are wrong. They quite likely do not include proper low case valuations. Equally there are some higher case valuations. But personally I find that unless numbers are pinned down, then no amount of hand waving can be translated meaningfully to a range of valuations in any useful manner.

Just the difference between a 5% discount rate and a 10% discount rate is enough to halve (or double) the shareprice. One could argue that change in sentiment is what has happened over the last 6-months. There are so many moving pieces in this puzzle.

(One has to assume EPS are valued equally with dividends to do these calcs, but I expect everyone knows the issues with that assumption).

 

[TrendTrader007]

Actually, it’s just not Tesla, Nvidia daily chart looks even better than Tesla daily chart, and so does the triple Q and nasdaq composite . They were some speculation in one of the traders groups that NASDAQ could go parabolic. If that happens, we will be off to races. It could just run up right from here or Tesla could scare some weak hands for a few days before going higher. I cannot wait for weekend to be over.
All the charts look so good