Tesla Stock Analysis - What is the Fair Value of Tesla's Stock? | Summary and Q&A

TL;DR

Tesla's revenue has been growing steadily, with expectations for continued growth, but the company has struggled with profitability. However, if Tesla can maintain profitability in the first quarter of 2020, it could positively impact their stock. The year 2019 has been focused on the Model 3, which has seen increasing sales. Tesla's success relies on lowering costs, mass adoption, and utilizing their superior battery technology.

Key Insights

• 🛀 Tesla's revenue has shown consistent growth, with expectations for ongoing increases.
• 🌓 Profitability has been a challenge for Tesla, but recent quarters have demonstrated the potential for profitability, especially in the first quarter of 2020.
• 💇 The success of the Model 3, with increasing sales and improving gross profit margins, highlights the importance of affordability and cost-cutting measures.
• 🚗 Tesla's smaller production compared to major players in the industry is a potential disadvantage, but their focus on electric vehicles puts them at the forefront of the future of automobiles.
• 🍉 Superior battery technology gives Tesla an advantage in terms of cost reduction and potential profitability.
• ❓ Analyst estimates predict significant profitability for Tesla in 2022, which could impact the stock's valuation.
• 🙂 Using a price to earnings ratio, Tesla's stock is calculated to be slightly overvalued based on fair value calculations.

Transcript

Hi, I'm Jimmy in this video I'm going to walk through my analysis of Tesla ticker symbol TSLA. The goal of this video is to look at the basics of Tesla's business and try to determine what Tesla's stock could be worth today. And then ideally we want to see if it makes sense for us to try to buy Tesla stock at the current price. Okay. Let's jump rig... Read More

Questions & Answers

Q: What has been the trend in Tesla's revenue growth?

Tesla's revenue has been steadily increasing since 2012, with expectations for continued growth based on analyst estimates. In 2019, they have already booked over $17 billion in revenue, with an estimate of $7 billion in revenue for the fourth quarter.

Q: How has Tesla's profitability been?

Tesla has struggled with profitability, with estimates showing a slight loss in the profit department for 2019. However, they have seen profitable quarters, particularly in the third quarter of both 2018 and 2019. Maintaining profitability, especially in the first quarter of 2020, could have a positive impact on Tesla's stock.

Q: What is the significance of the Model 3 for Tesla?

The Model 3 has been a key focus for Tesla in 2019, as it is more affordable than their other car models. Despite the potential for smaller profit margins, Tesla has seen a significant increase in the number of Model 3 vehicles sold. Gross profit margins have also shown improvement, indicating that Tesla is successfully cutting costs.

Q: How important is lowering costs for Tesla's overall success?

Lowering costs is crucial for Tesla's success and mass adoption. While the mid-thirty thousand dollar price range for the Model 3 may still be expensive for many, Tesla's superior battery technology allows for cost reduction in the production of their cars. This would enable wider adoption and potential profitability.

Summary & Key Takeaways

• Tesla's revenue has shown consistent growth since 2012, with expectations for further growth in the coming years.

• Tesla has struggled with profitability, but has recently seen profitable quarters, especially in the third quarter, indicating positive potential.

• The focus on the Model 3, with increasing sales and improving gross profit margins, highlights the importance of affordability and cutting costs for Tesla's success.