Understanding Tesla's Current Stock Valuation

why does this matter?
It doesn’t, this is business.
Public doesn’t give a rat, the investors don’t give a rat as long as there’s corporate profits

I’m not even sure if Tesla ever made a profit in USA operations yet, does this matter? No
In addition, Tesla’s first big profit year I think was 2020 or 2021? Those profits came from carbon credits, not from car sales.

But again, who gives a rat?
It’s called investing and growing a business.
You seem to leave out the fact that, for at least a decade tesla never even turned a profit, and when they did, it was from carbon credits! LOL

I’m waiting for the day that Tesla actually stands on their own two feet which still has not happened.
Without government tax credits, and without carbon credits, they have nothing but who cares?
Show the investors, the profits and right now Tesla is that 50 times earnings down from 100 and legacy makers at five times.
Time in again, Teslas earnings. Multiple over the last few years has been bringing investors in that company back to earth. Its stock price is trash and going nowhere.

There isn’t even a debate here, and there is no reason to comment any further just open up your investing software and check out the stock price the last couple years it’s laughable

Why does it matter if a company loses money on present and future initiatives?
Why does it matter if a company makes super high margin on energy sales and has over 40K spigots generating income?

How can you remotely say " why does this matter"?

No US automaker ever fully stood alone.
None zip zero zilch. You'll be waiting for the rest of your life plus if thats what you are waiting on.

I never argued Telsa didnt bleed money for a decade while building factories and battery infrastructure.

Let's compare 5 year and lifetime gain on stock between all automakers and see who has done what.

You missed a 12K% lifetime gain.
Then you missed the dip in 2022.
Then you missed the 50% pickup in 2023 and you are talking to me about my software?
 
Here's all one needs to know about TSLA stock price.

It is grossly over-valued based on image, marketing, hype, nonsense, wishful thinking combined with total lack of deep understanding of what vehicles do and how they do it, the love affair with the concept and the man Musk, and deep irrational exuberance. It has a PE ratio of about 47 (down from around 60), which is still almost 10x higher than peer auto makers. It's a LONG WAY DOWN for Tesla IMHO, considering the other companies are rushing to catch up on technology. And they will. Plus the big automakers are hemorrhaging employees now, as is the rest of the economy with layoffs and scaling back. But the EV craze appeals to really only about probably 10% of the population in total, and it has managed to score about a 4% national adoption. I think that caps out around 10% across the board. It's just not that practical or useful for most consumers. The major adoption will be small cars for short distances, and automated driving vehicles IMO for urbanites, delivery people, golf carts, etc. and the elite class who like image and to virtue signal.

The main selling points (speed/quickness, overnight charging), apply to so few people overall whilst being outweighed by serious drawbacks including but not limited to - lack of infrastructure, inconvenient charging times + short distances, requires a place to charge it securely at home. (nearly everyone who owns an EV, also owns a ICE for reliability and range). Add to this additional fees as states start piling on fees, like Texas has now added, plus higher electrical costs and lower availability as grids have brownouts. Expensive and inconvenient repair bills, including high priced tires, expensive batteries, and proprietary OEM parts coded to that specific car, inconvenient repair locations... The nail in the coffin will be the $10k - $15k battery replacements while the cars are still relatively young, around year 12. End of story.

It does not surprise me TSLA price is off 50% on the year from 318 a year ago to 160 today, off from 410 (Nov 2021) to 160 (today), representing a 60% drop, and it's fallen 30% YTD from a high of 210.

We are in a national and global recession/depression with huge upheaval. People are going to be financially strained. We might very well see an era of basic inexpensive ICE cars that require few chips, and easily maintained vehicles. Contrast that with huge potential supply chain problems for overly complex chip laden EVs. Until they make those here, that is a real problem.

Did you make a dime on the way up or down?
 
TSLA is way down from its peak. It is up 48% YTD.
When we bought out Model 3 in Dec 2018, I could have invested that money on TSLA at about $20 per share. It is $160 today; that's a 8x increase.
 
Why should I believe this schlub over anybody else out there?!?
Yup, it needs to go up 150% in value to reach its Nov 2021 high. It's at 160 now, so will it head back up or will it go down to 80 this year?
I think 80 if not this year sometime in 2024. It is fun to watch and who knows, if we end up at a valuation of the rest of the industry it should be around 40 but if it keeps growing, for now, 80 might seem reasonable with a P/E of 25
Its growth will stall next year. Its just a car.
 
TSLA's drop in valuation was greatly affected by the overall drop in the market, especially in tech stocks. Some of the arguments presented here seem to overlook that. I'm sure a really nerdy financial analyst could calculate how much of a percentage loss was due to the recession and overall poor economy and how much was due to the reasons some have cited, but I'm betting that much of it was beyond the control of anything that Tesla did.

And those mythical additional categories that will generate a huge and highly profitable revenue stream are still just over the horizon. But I wouldn't count them out in the next few years. And Tesla's competitors don't have anything comparable waiting in the wings. Just some EV models that will be lucky to break even regarding profits.
 
TSLA is volatile; a roller coaster.
Tesla is not like other companies; as @alarmguy points out, its valuation defies traditional metrics.
Analysts and investors hold TSLA, in the short term, to off-the-charts quarterly results.

Owning only TSLA, or any single stock, as the bulk of your investment portfolio, is considered incredibly risky. There are exceptions, of course.
What's next? Who knows?

I certainly do not depend on my investment in TSLA stock. But I have seen a nice growth. So far, so good. Time will tell, just like any investment.
 
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Here's all one needs to know about TSLA stock price.

It is grossly over-valued based on image, marketing, hype, nonsense, wishful thinking combined with total lack of deep understanding of what vehicles do and how they do it, the love affair with the concept and the man Musk, and deep irrational exuberance. It has a PE ratio of about 47 (down from around 60), which is still almost 10x higher than peer auto makers. It's a LONG WAY DOWN for Tesla IMHO, considering the other companies are rushing to catch up on technology. And they will. Plus the big automakers are hemorrhaging employees now, as is the rest of the economy with layoffs and scaling back. But the EV craze appeals to really only about probably 10% of the population in total, and it has managed to score about a 4% national adoption. I think that caps out around 10% across the board. It's just not that practical or useful for most consumers. The major adoption will be small cars for short distances, and automated driving vehicles IMO for urbanites, delivery people, golf carts, etc. and the elite class who like image and to virtue signal.

The main selling points (speed/quickness, overnight charging), apply to so few people overall whilst being outweighed by serious drawbacks including but not limited to - lack of infrastructure, inconvenient charging times + short distances, requires a place to charge it securely at home. (nearly everyone who owns an EV, also owns a ICE for reliability and range). Add to this additional fees as states start piling on fees, like Texas has now added, plus higher electrical costs and lower availability as grids have brownouts. Expensive and inconvenient repair bills, including high priced tires, expensive batteries, and proprietary OEM parts coded to that specific car, inconvenient repair locations... The nail in the coffin will be the $10k - $15k battery replacements while the cars are still relatively young, around year 12. End of story.

It does not surprise me TSLA price is off 50% on the year from 318 a year ago to 160 today, off from 410 (Nov 2021) to 160 (today), representing a 60% drop, and it's fallen 30% YTD from a high of 210.

We are in a national and global recession/depression with huge upheaval. People are going to be financially strained. We might very well see an era of basic inexpensive ICE cars that require few chips, and easily maintained vehicles. Contrast that with huge potential supply chain problems for overly complex chip laden EVs. Until they make those here, that is a real problem.
Could the same be said with AMZN 15 years ago? I knew a very smart CPA, who went through the AMZON financial statements, releases, etc, and said AMZN used fuzzy accounting, everything it reported violated generally accepted accounting rules, etc. AMZN lost money every year, yet their stock was rocking.

This very smart CPA missed what AMZN was doing "big picture". He also missed that AMZN through stock sales and bond sales, could and did get funding for next to nothing. All the while the Sears, Macys, etc were either going BK or simply having a stagnate stock price. Although I get pounded for posting this- I do not believe TSLA is a traditional vehicle manufacturer. Just as AMZN is/was not a typical retailer. TSLA is a tech company, using EVs to introduce its tech and related businesses.

TSLA will be generating revenues down the road in licensing fees, royalties, and subscriptions. That is their "secret" model, but we struggle to get past what comes out of their US, China, and German factories. Just like the struggle to see past AMZN as a online book seller.

Disclosure- I don't on any stocks and don't ever plan on owning any stocks.
 
Yup, it needs to go up 150% in value to reach its Nov 2021 high. It's at 160 now, so will it head back up or will it go down to 80 this year?
I think 80 if not this year sometime in 2024. It is fun to watch and who knows, if we end up at a valuation of the rest of the industry it should be around 40 but if it keeps growing, for now, 80 might seem reasonable with a P/E of 25
Its growth will stall next year. Its just a car.

Good question on where it will go, I certainly dont know.

If you are a potential investor and don't own it now does it matter if it will reach a prior high - or does it matter if the company is capable of growth? One could run the same exercise on any potential stock, but is that meaningful?

You keep repeating "it's just a car". I'm not sure if you simply don't want to acknowledge, or if you dont understand that's not all they are.

It's not just a car. It's the second largest "gas station" in the world for electric cars globally.
 
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TSLA's drop in valuation was greatly affected by the overall drop in the market, especially in tech stocks.
Partly correct. But the EV sector is dying or really really struggling. I posted in another one of these EV threads a summary of the losses in the top 10 or so EV related companies. A bloodbath across the sector, some down as much as 90% losses in stock valuation.
 
TSLA is volatile; a roller coaster.
...
Owning only TSLA, or any single stock, as the bulk of your investment portfolio, is considered incredibly risky.
Well, that's me but none of the other stocks I've owned over the past 25 years have provided as much excitement as TSLA. But Elon is losing his magic touch and pissing me off idealistically so I may cash in after cyber truck production bumps the price up. EV sales are booming here and Hyundai/Kia are showing the way.
 
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28B45274-0039-4C15-A407-FE0B46BA695F.jpeg
 
Could the same be said with AMZN 15 years ago? I knew a very smart CPA, who went through the AMZON financial statements, releases, etc, and said AMZN used fuzzy accounting, everything it reported violated generally accepted accounting rules, etc. AMZN lost money every year, yet their stock was rocking.

This very smart CPA missed what AMZN was doing "big picture". He also missed that AMZN through stock sales and bond sales, could and did get funding for next to nothing. All the while the Sears, Macys, etc were either going BK or simply having a stagnate stock price. Although I get pounded for posting this- I do not believe TSLA is a traditional vehicle manufacturer. Just as AMZN is/was not a typical retailer. TSLA is a tech company, using EVs to introduce its tech and related businesses.

TSLA will be generating revenues down the road in licensing fees, royalties, and subscriptions. That is their "secret" model, but we struggle to get past what comes out of their US, China, and German factories. Just like the struggle to see past AMZN as a online book seller.

Disclosure- I don't on any stocks and don't ever plan on owning any stocks.
You could say that about any new company.
Key difference here is Amazon was a trailblazer in a whole new business, online retailing, on equal footing with other start ups. You cant compare online retail it was whole new ball game. A car with 4 wheels is not.

But here is the catch I know A LOT of people do not know. Besides the fact that Amazon stock is down around 40% from its high. For two years recently it was up to 155 to 175 and now it's 103. So at what price do you want to pay today?

Amazon retail business to this day doesnt make much profit. Sure sometimes it maybe show profits in the hundreds of millions out of its MASSIVE online revenue and yet at times it loses 400 million in just 3months 2022.

Amazon stock is not about online retailing, its massive profit comes from its Cloud Computing Platforms used by corporations around the world. It seems most people are not aware of this yet the information is all out there in Amazons reporting.

The talk about the "accountant" is silly. It's the same as a friend saying I told you to bet on that horse, you didnt and it won. Almost every successful stock, 1000s of them, started out at nothing and others crashed and burned which many others did in that field.
I always talk in "the present" so at what point now, if Amazon is such a good company did you buy the stock? At 160 and now it's 103? Amazon is a true technology company, making its profits by the cloud computing services it sells to businesses around the globe.

Tesla is a car company, no different than any other car company except this one sells exclusively electric vehicles and brought them into the mainstream. Look at it this way, I know you will get this since you are older.
Through the decades a new blue jean manufacturer would come out with a new style jean, it would be the rage of the marketplace, until the existing blue jean makers started producing the same jeans. That new style jean would become common and that new company just become another hohum jean maker unless they branched out into other products in time before their jeans became worthless or worth the same as everyone else's jeans. But the legacy Wrangler and Levi's are still around.

Tesla is in retail, no different than another dozen+ car companies, Yes they are different, they have no retail dealerships which is a disadvantage. Made a splash with an Electric car (style) and now all the others will be making the same.

So my question would have been, when would you have bought this stock? $10 a share? $50 a share? (which it still was in 2020) $200 a share? $350 a share? or the current $160 a share?
Talking about any stock in the past is fruitless, think how that looks to others. Would have, could have, should have is no different than a gambler saying darn it I would have bet on that horse, or darn it, I should have bought that stock.
The thing is, you can say that about almost any stock on the stock exchange, they all started from nothing. (vast majority)

That is why one can not think about what they should have done but what are you going to do today. At that point, then ask, why is this one company that makes the same product as all the others selling at 50 to 90 times earnings and if things are so great why is the stock down over 50% today?
SO today you are presenting a case for Tesla at $160 a share but why not when it was $105 a share just last year? Or when it was $375 a share one and a half years ago. One has to ask what justifies todays price at $160. If your ok with shrinking profit margins, shrinking market share and every automotive company in the world gearing up, (like blue jeans) to produce the same style car as Tesla who has a non existent network... then its a stock for you.

By the way, Im not saying Amazon or Tesla is a bad company, I am replying to your statement as far as retail sales. Amazon profits comes from AWS (Amazon Web Services) at the present time. Doesn't mean there isnt a future in retail but it shows you how tough retail is, even though its P/E ratio is through the roof.

Tesla at the present time is retail. Their other operations at present time are not large enough to produce anything meaningful to the bottom line. This chart shows North American and international Retail Loses for 2022, profits previous years. But you will notice the MASSIVE profits of its AWS (Amazon Web Services)
Screenshot 2023-05-04 at 9.44.45 AM.jpg
 
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You could say that about any new company.
Key difference here is Amazon was a trailblazer in a whole new business, online retailing, on equal footing with other start ups. You cant compare online retail it was whole new ball game. A car with 4 wheels is not.

But here is the catch I know A LOT of people do not know. Besides the fact that Amazon stock is down around 40% from its high. For two years recently it was up to 155 to 175 and now it's 103. So at what price do you want to pay today?

Amazon retail business to this day doesnt make much profit. Sure sometimes it maybe show profits in the hundreds of millions out of its MASSIVE online revenue and yet at times it loses 400 million in just 3months 2022.

Amazon stock is not about online retailing, its massive profit comes from its Cloud Computing Platforms used by corporations around the world. It seems most people are not aware of this yet the information is all out there in Amazons reporting.

The talk about the "accountant" is silly. It's the same as a friend saying I told you to bet on that horse, you didnt and it won. Almost every successful stock, 1000s of them, started out at nothing and others crashed and burned which many others did in that field.
I always talk in "the present" so at what point now, if Amazon is such a good company did you buy the stock? At 160 and now it's 103? Amazon is a true technology company, making its profits by the cloud computing services it sells to businesses around the globe.

Tesla is a car company, no different than any other car company except this one sells exclusively electric vehicles and brought them into the mainstream. Look at it this way, I know you will get this since you are older.
Through the decades a new blue jean manufacturer would come out with a new style jean, it would be the rage of the marketplace, until the existing blue jean makers started producing the same jeans. That new style jean would become common and that new company just become another hohum jean maker unless they branched out into other products in time before their jeans became worthless or worth the same as everyone else's jeans. But the legacy Wrangler and Levi's are still around.

Tesla is in retail, no different than another dozen+ car companies, Yes they are different, they have no retail dealerships which is a disadvantage. Made a splash with an Electric car (style) and now all the others will be making the same.

So my question would have been, when would you have bought this stock? $10 a share? $50 a share? (which it still was in 2020) $200 a share? $350 a share? or the current $160 a share?
Talking about any stock in the past is fruitless, think how that looks to others. Would have, could have, should have is no different than a gambler saying darn it I would have bet on that horse, or darn it, I should have bought that stock.
The thing is, you can say that about almost any stock on the stock exchange, they all started from nothing. (vast majority)

That is why one can not think about what they should have done but what are you going to do today. At that point, then ask, why is this one company that makes the same product as all the others selling at 50 to 90 times earnings and if things are so great why is the stock down over 50% today?
SO today you are presenting a case for Tesla at $160 a share but why not when it was $105 a share just last year? Or when it was $375 a share one and a half years ago. One has to ask what justifies todays price at $160. If your ok with shrinking profit margins, shrinking market share and every automotive company in the world gearing up, (like blue jeans) to produce the same style car as Tesla who has a non existent network... then its a stock for you.
AG,

Great and thoughtful feedback- we see things differently about TSLA (I think TSLA is a tech company that will generate revenues through subscriptions, licensing's, royalties, etc). Hopefully we will cross paths in 15 years and have a cup of coffee and see how this pans out.

I don't but stocks, not TSLA, not AMZN. I stay away from dirty businesses, and the stock market is a dirty business, for many, may reasons. Yes, people have made generational wealth from it, but I have no desire for putting my money in stocks. I just wish the interest rate was a free market- would love to get a true return on savings accounts. How many older people have been indirectly forced into stock market investment, because savings accounts paid essentially zero percent interest for the past decade plus.
 
AG,

Great and thoughtful feedback- we see things differently about TSLA (I think TSLA is a tech company that will generate revenues through subscriptions, licensing's, royalties, etc). Hopefully we will cross paths in 15 years and have a cup of coffee and see how this pans out.

I don't but stocks, not TSLA, not AMZN. I stay away from dirty businesses, and the stock market is a dirty business, for many, may reasons. Yes, people have made generational wealth from it, but I have no desire for putting my money in stocks. I just wish the interest rate was a free market- would love to get a true return on savings accounts. How many older people have been indirectly forced into stock market investment, because savings accounts paid essentially zero percent interest for the past decade plus.
It's all good, just discussing, really. I learned a long time ago not to fight the market even if my posts show otherwise. But right now I am not fighting the market as Tesla is down way over 50% from it high price of less than two years ago, so I am not wrong at the present time, nor was a wrong all last year. SO I guess people who paid double the price will one day be able to rejoice when it goes back up?

Only thing that drives me nuts is with anything in life. You only hear about the winners in overvalued stocks.
SO are you a winner in Tesla or a loser? Some lost big time, some won big time but you only hear about the winnings. Its easy to look back and say this or someone USED to be a winner.
and ... not to repeat but the stock is down over 50% from its high, it has to go up over 100% for the losers to get their investment back.

It's kind of funny you mention banks. Yeah, low interest rates prop up the stock market too.
My mother, long gone now and my dad, the same. Used to split my dads income, she invested that money in Bank Cd's and high rate accounts, it was freaking amazing! *LOL* Back then she used a black and white composition book,
In the book she kept track of what CD was expiring when, how long each one was, my god she was amazing, always shuffling around CD's !!!!
My dad, he invested in the stock market with his investment money.

Guess who amassed a fantastic amount of money and profits? Yeah, Mom. She was great in so many ways.
 
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