Antradienis, 16 liepos, 2024
US Stocks

Tesla Inc Stock Analysis

The company Tesla, Inc. is engaged in the design, development, production, and sale of fully electric transportation vehicles, energy generation, and storage systems. It also provides vehicle service centers, compressor station services, and develops autonomous driving technology. The company operates through the following segments: automotive and energy generation and storage.

The automotive segment encompasses the design, development, production, and sale of electric transportation vehicles. The energy generation and storage segment involve the design, manufacturing, installation, sale, and leasing of stationary energy storage products and solar energy systems, as well as the sale of electricity generated by solar energy systems to customers.

Factories:

Production LocationVehicle Model(s)Production Status
Fremont FactoryModel S / Model XActive
 Model 3 / Model YActive
Gigafactory ShanghaiModel 3 / Model YActive
Gigafactory Berlin-BrandenburgModel YActive
Gigafactory TexasModel YActive
 CybertruckTooling
Gigafactory NevadaTesla SemiPilot production
TBDTesla RoadsterIn development
VariousNext Generation PlatformIn development
Source: Tesla.com

The company develops energy storage products for use in homes, commercial facilities, and municipal areas. The company was founded on July 1, 2003, by Jeffrey B. Straubel, Elon Reeve Musk, Martin Eberhard, and Marc Tarpenning. Its main headquarters is located in Palo Alto, California.

Tesla Inc was founded as Tesla Motors Inc. A group of engineers was eager to prove to the world that electrically powered vehicles could be better, safer, and more fun. Today, Tesla is not only an automaker. The company also specializes in renewable clean energy, electric components, and battery manufacturing, aiming to reduce CO2 emissions to zero.

Tesla Inc

In 2008, the first mass-produced, fully electric sports car, the Roadster, was introduced to the market. It was followed by the Model S sedan, which began the Model _ line.

Cars are produced in the United States, in the Fremont factory in California. The subsidiary companies Powerwall, Powerpack, and Solar Roof are engaged in the production and storage solutions for electric energy.

In Nevada, Gigafactory 1 has already been built and produces components for automobiles. Gigafactory 2 in the state of New York produces photovoltaic elements. Gigafactory 3 is being constructed in Shanghai, China. As we know, Tesla Inc CEO Elon Musk is a generator of ideas, so it would not be entirely accurate to describe Tesla solely as an automobile manufacturer.

Income distribution by sectors and regions:

Distribution by sectors
Distribution by sectors
Distribution by regions
Distribution by regions

Tesla Inc Finances

In the company’s finances in 2023, the company’s profit growth continued. The company generates such cash flows that it can finance capital investments, which also significantly increased. The pace of sales revenue growth is stable. And the 6-year rate reached an average of 42.09% annually. This is rarely achieved by a company. In 2023, revenue increased by 18.80%.

Positive EPS has been for the last 4 years. And its average growth rate reaches as high as 174%. In the future, EPS growth is also expected, as in 2023 the net income reached as much as 15.5%. Investors in the market also anticipate significant company profits. But let’s not forget that business operates in a highly competitive environment.

It should be noted that the growth in EPS in 2023 was driven by the deferral of income tax. The company has nearly $7 billion in Deferred tax assets. Due to the intricacies of US corporate income tax, the company utilized these assets now and achieved higher profits. However, Pre-tax profit decreased by -27% in 2023.

The Gross margin is the indicator that shows us whether or not Tesla is making a breakthrough. And today we don’t see any breakthrough because the company’s Gross margine is lower than the average of U.S. automotive companies. However, if we take only the Automotive sector, the Gross margine is just slightly higher than the market average.

The company’s Working Capital is positive and increasing, which means it needs to borrow less. This is visible in the Balance Sheet. Total liabilities account for only 68% of Equity. Long-term debts would be covered with just a fifth of last year’s Net profit. And the interest paid for loans amounts to only 1.75% of Operating profit.

Retained profit has been positive for only 3 consecutive years. Its average annual growth is nearly 821%, and the Return on Retained profit was 191%. This led to achieving a high ROAE of 22%.

The F_Score indicator is only 4. Increased asset and leverage indicators have a negative impact on profitability indicators. Fitch Ratings has assigned a BBB- stable rating.

If the company owners wanted to sell shares and invest today in the U.S. 10-year Treasury bonds and receive the same return as the company provided in 2023, they should sell the shares for around $93 (the market price at the time of writing was about $180). This indicates that, in terms of fixed risk-free income, Tesla shares are overvalued.

The expanded analysis significantly improved the results of the investment valuation:

Tesla Investment Scoreboard
Investment Scoreboard

Tesla Inc Stocks

The company’s shares have been listed on the NASDAQ exchange since July 2010. The ticker is TSLA. As of December 21, 2020, the company’s shares were included in the S&P 500 index.

It needs to be acknowledged that these stocks are very risky and suitable for speculation. The Standard deviation of prices reaches as much as 183, and the beta is 2.45 at the time of writing. These are very high indicators. The equity risk premium is negative, -1.75%, but the PEG is attractive at 0.45.

The TSLA price’s 10-year CAGR was 37.85%. It may be that the price growth has already exhausted its potential. From the initial analysis to the third year, the stock price increased by only 4.68% on average annually.

The GRAPES method calculated price perspective reaches 135 USD. And this method indicates that the stock in the market might be overvalued. In other words, investments in fixed-income instruments could be more profitable than in TESLA stocks.

In perspective, the price calculated by our method can increase from 20% to 35% on average annually. The perspective remains attractive:

TSLA Price perspective. MIN-MAX
Price perspective. MIN-MAX

Recommendations and forecasts from third parties

Artificial intelligence:

Analysis of Tesla stocks shows that this company is one of the leaders in the electric vehicle market and has significant potential in the future. Investors view Tesla as a pioneer of innovation, and its Model 3 is the most popular electric car in the world.

Is Tesla Stock Worth Investing In? This question is important for both current and future investors. Tesla sales are growing, and state incentives for the purchase of eco-friendly transport further increase demand for Tesla products.

Risk factors include increasing competition and overvaluation of stocks. Tesla cars are expensive, which may limit their accessibility to the general consumer audience.

Investment prospects are favorable, considering the growing electric vehicle market and Tesla’s innovations. Tesla not only manufactures electric vehicles but also trucks, solar panels, batteries, demonstrating the company’s diversification and aim to be a leader in sustainable energy.

While Tesla stock prices have experienced a correction, this could be seen as an opportunity to buy stocks at a better price.

TradingView consensus:

TSLA TradingView consensus
TradingView consensus

Stock Analysis consensus:

TSLA Stock Analysis consensus
Stock Analysis consensus

Stocktwits consensus

TSLA Stocktwits consensus
Stocktwits consensus

Price chart

Conclusions

The main question is whether the company will be able to increase value for shareholders in the future? And for now, it’s difficult to answer that question. As a speculative stock, it fully justifies its status. It will likely remain so in the future. However, we see that the leverage is steadily decreasing, so gradually, when there is a correction in the market, we can replenish our portfolios. We also expect that having secured stable positive cash flows, the company’s Board will decide in the future to pay dividends and buy back its own shares.

A cup of coffee from you for this excellent analysis.

Tesla’s site for investors

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