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Message
re: Tesla.....Tech vs Financial Realities.....Discuss The Investment Thesis
Posted on 8/25/16 at 2:23 pm to dabigfella
Posted on 8/25/16 at 2:23 pm to dabigfella
quote:Like I said, I'm not a pro, but I will give you my thoughts on valuing high growth companies. I'm pretty sure you and I had several talks about AMZN a while back, and I hope that worked out well for you.
dabigfella
I'm not going to say that profit/loss or liabilities or anything is totally irrelevant, because it all matters, but when talking about high growth all I really look at is revenue, revenue growth rate, and margins. Tesla's margins are already 20+%, and I only see that improving once the gigafactory is in full swing. For comparison, Ford is at about 15%. Tesla is growing revenue at 20+%, while Ford is flatlined. If Tesla is to reach their 2020 target, I think they would have to grow at 50-70% or so, which I think is achievable since they did the same when they started selling the Model S. If they sell a million vehicles in 2020, that would put revenue at $35B bare minimum. Throw in some sales of the other models, plus possible battery sales and charging station agreements, and Tesla would have over $40B in revenue. If they stop growth right there, with margins of 20%, that's $8B gross profit. With the growth machine turned down, operating expenses would fall more in line with the industry, and Tesla would be looking at profits in the neighborhood of $2B. That makes their $30B market cap sound reasonable, doesn't it?
All Tesla has to do is sell a million cars a year. And if BMW and Mercedes can EACH sell well over a million, why can't Tesla? Why is anybody even concerned whether the bigger companies will crush Tesla? Forget about electric vs. gas, they're just selling cars, and damned fine ones. Would it even be an issue if others started selling electric cars that are even close to competitive with Tesla? Either way you look at it, there is room in the market for another player to sell a million cars. If Ford can sell nearly a million pickup trucks at $40k+ a pop just in the US, it seems very likely that Tesla can sell a million cars worldwide.
And I think that's on the low end. A million cars per year. Even if it takes twice as long as expected to get there, and they don't do it until 2024, the current stock price sounds reasonable.
Long story short, the man who was determined to build a fricking spaceship, and who subsequently built a fricking spaceship, is now determined to sell a million vehicles. And unless he dies or flies off to Mars before then, I have little doubt that he will do it. I don't think bankruptcy will be an issue. He will either find more sources of funds, or dial back the spending before that happens.
2
Posted on 8/25/16 at 2:32 pm to Korkstand
great analysis, thanks man!
dont forget solar city is merging with tesla and i dont know the financials involved and why everyone says its bleeding cash, but I just paid them $19,000 for a system. I just couldnt understand if it was real losses per system installed or if it was accounting tricks. Im a business owner myself so I know what the final audited statement says isnt really whats going on, but I have a hard time understanding how solar city is bleeding cash on all these solar leases they're doing when they lay out cash and you're getting this cash flow for years on the leases. I opted to buy mine not lease, but most of what youll read from bears is solar city is one giant POS who is bleeding like there's no tomorrow. I just dont get how or why, it seems like solar city is going to be one giant utility co one day from the way I understand they function
I also understand that the Koch Brothers have paid a ton to people to go online and bash tesla and it was frustrating musk. If you look on twitter theres one guy, a hedge fund manager, mark spiegel, he was on cnbc his whole twitter feed his literally dedicated to outing tesla as a scam and I admit Ive gotten caught up reading his work along with a few others on seeking alpha, which by the way is the most bearish group of amateur investors ive ever seen in one place. If you like contrarian indicators, the most retail mom and pop investor site is like 98% tesla bears bc of the lack of earnings lol.
dont forget solar city is merging with tesla and i dont know the financials involved and why everyone says its bleeding cash, but I just paid them $19,000 for a system. I just couldnt understand if it was real losses per system installed or if it was accounting tricks. Im a business owner myself so I know what the final audited statement says isnt really whats going on, but I have a hard time understanding how solar city is bleeding cash on all these solar leases they're doing when they lay out cash and you're getting this cash flow for years on the leases. I opted to buy mine not lease, but most of what youll read from bears is solar city is one giant POS who is bleeding like there's no tomorrow. I just dont get how or why, it seems like solar city is going to be one giant utility co one day from the way I understand they function
I also understand that the Koch Brothers have paid a ton to people to go online and bash tesla and it was frustrating musk. If you look on twitter theres one guy, a hedge fund manager, mark spiegel, he was on cnbc his whole twitter feed his literally dedicated to outing tesla as a scam and I admit Ive gotten caught up reading his work along with a few others on seeking alpha, which by the way is the most bearish group of amateur investors ive ever seen in one place. If you like contrarian indicators, the most retail mom and pop investor site is like 98% tesla bears bc of the lack of earnings lol.
This post was edited on 8/25/16 at 2:42 pm
Posted on 8/25/16 at 2:39 pm to Spock's Eyebrow
quote:Ah, I see. Ford makes very bold promises for 2021, praise be to Ford. Musk makes bold promises, they are "dubious" and he's just pumping his stock. Nevermind that Musk already has semi-autonomous vehicles in the hands of consumers in 2016.
Uh, no. Ford is heavily into autonomous cars and has been making some very bold promises for the 2021 timeframe. Audi is another.
Did you miss the part where I said "led by"?
quote:That's a whole lot of speculating, based on nothing at all.
I think it was a publicity stunt. If I were a TSLA investor, you better believe I would have placed one for that trivial amount of money even if I had no interest in ever owning a Tesla. They had to shut down speculators placing multiple reservations, and many will cancel when they realize they won't be getting the tax credit, or other circumstances change in the 2-3 years before they can contemplate taking delivery. Has TSLA even been publishing attrition figures?
Here's some speculation based on numbers. How many Model S's is Tesla shipping per year? Like 50k? And those are $70k+ vehicles. Let's say they miss the $35k target for the Model 3 by a LOT and they end up at $45k. That is still well within the attainable range for a LOT more people than $70k. I will bet both my nuts that Tesla sells at a minimum 100k Model 3's per year once production gets ramped up. Even if every single one of the reservations backs out, more people will line up to buy them once they start shipping. It's just a given at this point, knowing what we know about Model S sales. Reservations or not, 400k Model 3's will be sold (with autopilot features) before whatever Ford does by their "2021 timeframe".
Posted on 8/25/16 at 2:54 pm to Korkstand
quote:
Uh, no. Ford is heavily into autonomous cars and has been making some very bold promises for the 2021 timeframe
I just dont see this because people dont get the brain power going to tesla these days. In the end brainpower is all you are investing in. Google gets whoever it wants, the best of the best. Ford will never ever get the best of the best engineers, software developers, etc. Those guys want to be part of whats cool, no amount of money ford or gm can throw at them will sway them. My fiancees brother was a hotshot from an ivy league school, got his phd and had all kinds of money thrown at him by yahoo and he took a job paying less at a startup, he said it wouldve been embarrassing to work for yahoo.
So the mindset amongst these whose who of superstars coming out in the tech world, especially those going into automotive engineering, those guys dream of working at Tesla alongside musk not at GM alongisde Mary Barra. The gigafactory not sure if youve seen it, there's desks on the floor, same with the factory in california. Its a whole new way of doing things and the people want to work for that company and tackle those problems with tesla.
Posted on 8/25/16 at 2:58 pm to Korkstand
quote:
Ah, I see. Ford makes very bold promises for 2021, praise be to Ford. Musk makes bold promises, they are "dubious" and he's just pumping his stock.
You are such a fanboy.
quote:
Nevermind that Musk already has semi-autonomous vehicles in the hands of consumers in 2016.
A controversial feature, to be generous.
quote:
Did you miss the part where I said "led by"?
It's not relevant when no one has one, and it's no basis for deemphasizing other companies.
quote:
That's a whole lot of speculating, based on nothing at all.
No, it's based on multiple facts and an understanding of human behavior. I'm going to stop replying to you now.
Posted on 8/25/16 at 3:05 pm to dabigfella
quote:Because when they lease a system for $0 down, they have to foot the bill today and then recoup it and profit over the next 20 years. The breakeven point is probably 15 years down the road for a system installed today. If they weren't "bleeding cash" now, THEN I would fear for their future because that would mean they weren't installing any cash-generating solar panels. And I think that's exactly what happened to their stock when they announced that they were going to focus on being cashflow positive.
I have a hard time understanding how solar city is bleeding cash on all these solar leases they're doing when they lay out cash and you're getting this cash flow for years on the leases.
Posted on 8/25/16 at 3:06 pm to dabigfella
quote:
I just dont see this because people dont get the brain power going to tesla these days. In the end brainpower is all you are investing in. Google gets whoever it wants, the best of the best. Ford will never ever get the best of the best engineers, software developers, etc. Those guys want to be part of whats cool, no amount of money ford or gm can throw at them will sway them.
Apple and Faraday have been poaching Tesla employees. Ford has had a lab in Silicon Valley for a while now and is doubling the size of its team to make a serious push to have a fleet by 2021. More here:
LINK
I think it's a mistake to believe "Only Elon can do it. No one else matters. There is no competition."
Posted on 8/25/16 at 3:13 pm to Spock's Eyebrow
quote:I have admitted to being a Musk fanboy on several occasions. Not sure how that is relevant, though, when we're talking about YOUR point that Ford is making "very bold promises" for 5 years from now in the context of who is leading the autonomous vehicle charge.
You are such a fanboy.
quote:Leaders are always controversial.
A controversial feature, to be generous.
quote:It's entirely relevant. Both Google and Tesla have vehicles on the road capable of fully or almost fully driving themselves. Anyone would say they are the leaders, except apparently you who is seemingly more impressed with Ford's very bold promises for 5 years from now.
It's not relevant when no one has one, and it's no basis for deemphasizing other companies.
quote:What facts? Do you have any facts about people getting their deposits back? Or their future plans to do so? Regardless, it should be a given that some, if not most, will back out before delivery. However, the FACT remains that 50k people per year are taking deliveries of the much more expensive Model S, so it should not be at all unexpected if twice as many, if not 10 times as many, people will be buying a car that costs half as much. Do you understand that bit of human behavior?
No, it's based on multiple facts and an understanding of human behavior.
quote:I would appreciate that. I'll check back in with you in 5 years to see where Ford stands with Tesla as far as autonomous and electric vehicle sales.
I'm going to stop replying to you now.
Posted on 8/25/16 at 3:14 pm to Spock's Eyebrow
Honestly, apple may be getting into cars, but I just dont think its gonna be that cool to drive an apple car, the stigma would not be hip like a tesla. Maybe apple launches a whole new branding for the car, that would be fine but apple doesnt have the prestige needed for expensive cars, but yes I envy apples cash position. As I said my only fears with Tesla are cash related, not brand or product related. Id love to see apple or google just outright buy tesla, google actually almost did years ago while the stock was cheap. Everything Tesla have rocks, my fears are it never gets there due to cash constraints, lack of access to capital thats it. Believe me id love to see apple or google buy the brand today, end the dilution and take it to where it should be, while leaving musk in charge of the division. I think Elon Musk + apple or googles cash pile would be an amazing thing. Google clearly believes in him, they own 10% of spaceX.
Posted on 8/25/16 at 3:46 pm to dabigfella
quote:
Honestly, apple may be getting into cars, but I just dont think its gonna be that cool to drive an apple car, the stigma would not be hip like a tesla. Maybe apple launches a whole new branding for the car, that would be fine but apple doesnt have the prestige needed for expensive cars, but yes I envy apples cash position.
No one's seen an Apple car or even knows what they're really working on. I only brought up Apple to refute the notion that only Tesla will get (and keep!) the essential people, and everyone else will get the second raters. As for the "coolness" factor, I think you're overestimating Tesla and underestimating future competitors, especially Apple, if it chooses to become one.
Posted on 8/29/16 at 11:12 am to Korkstand
the new autopilot 8.0 updates look nice, the highway interchanges seem amazing actually. I went long big here 215 down well off last weeks highs.
This post was edited on 8/29/16 at 11:15 am
Posted on 8/29/16 at 11:38 am to Spock's Eyebrow
quote:
Honestly, apple may be getting into cars, but I just dont think its gonna be that cool to drive an apple car, the stigma would not be hip like a tesla. Maybe apple launches a whole new branding for the car, that would be fine but apple doesnt have the prestige needed for expensive cars, but yes I envy apples cash position.
Let the major manufacturers build the car. Put Apple in charge of running the autonomous systems. Let apple sell the lasers/cameras/radar/software needed for the system as a third party supplier to the car makers
Posted on 8/29/16 at 11:56 am to Tigeralum2008
but even the major manufacturers building the car, ford,gm,etc they sell cars now because nobody has a choice in that low price range. If tesla really delivers a $35k car it will be incredibly popular and tesla has said they will use the success of the $35k car to build an even cheaper one, if that happens, watch out because the brand of tesla is infinitely popular vs all these other car brands
Posted on 9/1/16 at 10:15 am to Korkstand
did tesla really get smoked today bc of the spacex crash? haha they really need to get the share price up alot before ths scty deal to avoid bigger than necessary dilution. It got destroyed today I actually had to avg down
on the plus side looks like the investment bankers made an error and tesla is getting solar city for $400m less than its worth
on the plus side looks like the investment bankers made an error and tesla is getting solar city for $400m less than its worth
This post was edited on 9/1/16 at 10:26 am
Posted on 9/1/16 at 10:20 pm to dabigfella
Speaking about Musk or Tesla in your OP without a single mention about SpaceX kinda makes you look silly.
I can also remember you dogging the idea of autonomous and electric vehicles on the Money Talk when folks talked Tesla and Musk up. Mainly because you are invested in petrol stations it seems.
Odd to see this stance now. Your position seems to have evolved.
SpaceX is the real gem in Musks crown. It will bankroll Solar City and Tesla for decades.
I can also remember you dogging the idea of autonomous and electric vehicles on the Money Talk when folks talked Tesla and Musk up. Mainly because you are invested in petrol stations it seems.
Odd to see this stance now. Your position seems to have evolved.
SpaceX is the real gem in Musks crown. It will bankroll Solar City and Tesla for decades.
This post was edited on 9/1/16 at 10:22 pm
Posted on 9/2/16 at 10:23 am to GFunk
space x is not bankrolling tesla now nor ever
This is honestly the best read Ive ever read on why tesla is so disruptive, if you have time to read, its incredibly long with multiple points I suggest you read it. Again the stock price is cratering recently bc as I mentioned the financials are a huge disconnect from the current valuation. Its tough to gauge an investment in this name now we're sub $200 and broke huge technical levels.
Tesla Disrupts Different
This is honestly the best read Ive ever read on why tesla is so disruptive, if you have time to read, its incredibly long with multiple points I suggest you read it. Again the stock price is cratering recently bc as I mentioned the financials are a huge disconnect from the current valuation. Its tough to gauge an investment in this name now we're sub $200 and broke huge technical levels.
Tesla Disrupts Different
Posted on 9/2/16 at 1:52 pm to dabigfella
quote:
dabigfella
quote:
space x is not bankrolling tesla now nor ever
You're a smart guy. You make good points. But that's not one of them. You couldn't make yourself sound more clueless.
Posted on 2/22/17 at 10:25 pm to Korkstand
Hey korkstand, hell of a run you had with tesla, what do you think of it up here. Growth was tremendous today, revenue up 88% YoY but its gotta take a breather at some point....right? Im up ALOT, I have a ton in the 189 cost basis, so thank you again for your insights.
Posted on 2/23/17 at 12:03 am to dabigfella
quote:
revenue up 88% YoY but its gotta take a breather at some point....right?
I will say Tesla is building quite the 'ecosystem', if we're still comparing them to Apple. Those solar shingles look damned fine, and I can see a lot of new construction at least considering it. Same for when it comes time for roof replacement on older homes. With the Powerwall and the quick charge stations, and whatever else in the pipeline, Tesla is becoming more and more an energy company rather than a car manufacturer. It makes sense they dropped 'motors' from the name.
They will see a lot of competition for sure, but Musk has proven time and again that he just moves at a faster pace than the rest of the world.
I can't say for sure that the stock will continue going up, but I do think there is reason to be optimistic.
This is pure speculation on my part, but I can definitely see Tesla moving into the smart home space in the coming years, and that market is ripe for someone to come in and make sense of it all. It's just a mess right now, and Musk might be the guy to change that. I don't know if they will get into the 'devices' part of it, but the solar roof and Powerwall combo feels to me like it needs a home energy monitoring system to make it more 'complete'. It needs to know where your energy is going down to the circuit level, and which appliances and devices are using what. There are already several products that do this, at varying levels of success and usefulness. But as far as I know, none of them integrate with solar panels and battery storage in a way that your home energy use can be automated. I want my lights to dim when I'm on battery power, and any other smart power-saving features you can think of. The data these systems will generate, and the uses for that data, will be incredible. Think about if your home knew about energy demand and prices, and if it could siphon from the grid when it's cheap and put it back on the grid when it's not. Think about a whole neighborhood, or a whole city, full of houses with solar roofs and battery packs. Maybe they could all go off-grid, but what if it's better to just stay on the grid with all those other battery packs? If all the homes (and the grid itself) are smart, they can coordinate to keep the grid up at night or when the traditional supply goes down. Is SolarCity just a cute name, or is it really an attainable goal?
Anyway, sorry for rambling a bit, but I just wanted to put a few more thoughts out there. Maybe I sound like too much of a 'fanboy' and I'll scare you away from Tesla, though.
Posted on 2/23/17 at 7:18 am to Korkstand
Haha I respect the enthusiasm it's just such a battleground stick it was up to $282 in the after hours yesterday and 269 right now it's just so heavily shorted its amazing, they did guide to flat model s and x sales moving forward which was kind of weird to me but still it's all about the model 3
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