Tesla's Valuation Is Getting INSANE! TSLA Q2 2023 Earnings Analysis

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[@BrianFeroldiYT]

We're back! We took a few weeks off for the summer. The general plan is to ramp up during earnings season and ramp down during the calm weeks. Hope you enjoy this video! Grab a free copy of he Reverse DCF Calculator here: brianferoldi.com/rdcf

[@maltlickytexas]

Are you still holding NovoCure shares, Brian?

[@OviTisler]

I just did the Reverse DCF analysis on $CVS. Did I mess something up? It says for a 2% terminal growth rate and a 10% discount rate, the implied growth rate is like -10%? So the stock price is implying a 10% contraction in FCF every year?

[@gearoidkingston2206]

Also, I don't understand how your content doesn't get more hits. Have you tried collaborations with other financial youtubers to increase traffic and make the channel more viable for you both .... and the rest of us 😉

[@ginvest273]

❤👏the way you presented the fianacial report data is the best I have seen. Well organized and easy to understand👏

[@BrianFeroldiYT]

Glad you like it! These take some time to put together :)

[@davidstrauss8646]

Of course the margins still beat every other auto company even in its “weak” stage

[@JS-rg7vo]

is it because of the unibody design or automated production process?

[@Crunch_dGH]

Tesla has 8.5x of BYD’s margins, referenced below. Re: Tesla Capacity Expansion. And with Autobidder, match prices to demand for keeping their rapidly expanding factories humming at optimum levels (while keeping suppliers happy). Nice to have 8.5x BYD’s margins (the only other net cash flow EV) to “play” with! Meanwhile, Re: Earnings Call. Crash the price, so more can buy, to soon afford an EV. MISSION ACCOMPLISHED! As for the earnings debate, why is it so impossible for ANYONE (present company excepted) to take Elon at his word? What if one merely assumes that he is a master manipulator who anticipates all possible responses to his quips, stutters, & “mid-speaks” that are well calculated (like all he does) to produce the result that HE desires? Why wouldn’t he do that, as a matter of course? Given the macro & corporate context, NOW would be the optimal time to crash TSLA with the least risks of the stock fully recovering, by the time of which, the stock will likely be boosted by circumstances to even greater heights? The result of this “plan” are the maximum of his beloved “small investors” to partake AND their subsequent likelihood to buy an EV, thus satisfying Tesla’s primary objective. I.e., Try & be sufficiently humble to second guess your OWN urge to second guess the Master. Aka, hoard cash on the Ups & buy as Dips bottom (NOT $CAing). Re: FSD Licensing. Vehicular automation is highly dependent (for OTA & systems integration) on componentry compatibility which ONLY bespoke EV designs have. That’s why all of VW’s 40k army of (generic) programmers & boasting could never deliver OTA, let alone automated navigation. All Legacies must revamp their designs, which includes forcing their suppliers to comply with dictated specifications or simply going vertical. The first to make that leap (Mercedes, due to fewer models to retrofit & greater supplier dominance?) will be the first up to be positioned to accept FSD licensing.

[@bleezieg]

yea and ACTUAL PROFIT and revenue is up big time yet I lost 5k in one day because MORONS that think Tesla runs on one statistic rather than real MONEY

[@g1984AF]

​@@JS-rg7voboth. Long term automation always cheaper. And design is cheaper as well. Also complete vertical integration

[@Thomas-re9ky]

Tesla’s operating margins are no longer higher than BMW or Mercedes ICE margins FYI. They were both above 10% last quarter while Tesla’s in 9.6% now.

[@xxrngxx5]

Informative vid Brian. Thanks.

[@Jc-nu5lz]

Great content and analysis. It's very helpful. I have been investing in Tesla for over six month. Although the stock price act like a Roller coast but I didn't sell a single share. We have been seeing more and more Tesla on the road, and also heard feedback from friends whom driving Tesla. They just love it. Will continuing holding my position.

[@iali00]

Can you please do an analysis on Apple? How is the $3T valuation justified?

[@estevado]

Great, compact analysis where Brian makes every word and number count. We’re getting a clear picture of Tesla’s capability, execution, financial health and rich valuation. Not betting against Elon with so much cash on hand and huge plans for the company. Well done and thank you, Brian. Can’t wait for the next analysis.

[@gorandamchevski]

How/when do you make the decision to stop while you're ahead?

[@theoand]

On the slide about Opearting Margins shouldn't you show it being at 9.5% like the previous slide rather than around 14%?

[@ConorValue]

Amazing job, Brian!

[@landsbergerandy]

You just earned a new subscriber. Easy to understand presentation.

[@BrianFeroldiYT]

Welcome aboard!

[@r.o7897]

I love it!

[@yuanliu200]

Should the discount rate be 13.1% instead of 10%? 13.1% rate assumes a 3.5% risk free rate, a 6% equity risk premium of stocks vs bonds, and TSLA 1.6x beta

[@FinanceNinja]

My WACC is about there as well. 13.2%.

[@BrianFeroldiYT]

There are lots of ways you can calculate the discount rate. I prefer simplicity.

[@yairandpeninaspolter5550]

So happy you are back 🎉

[@BrianFeroldiYT]

We took a little break, but we’re back!

[@bsmba1347]

nice job. hit all the important points.

[@imdoc7872]

Thank you for this. I will always regret selling all my shares last year 😢

[@johanneshaselgrubler8555]

2:13 I thought FSD sales are included in automotive sales

[@Martinit0]

Yes, FSD is in Automotive Sales, see last 10-K page 35: "... including access to our FSD features, internet connectivity, Supercharger network and over-the-air software updates." and page 37: "Services and other revenue consists of non-warranty after-sales vehicle services and parts, paid Supercharging, sales of used vehicles, retail merchandise and vehicle insurance revenue."

[@timelliott2488]

Great summary Brian

[@BrianFeroldiYT]

Thanks!

[@lorisbiancheri1194]

Need a 35% CAGR of free cash flow for a mere 10% return. This is silly - why expose yourself to such risks?

[@davidbeppler3032]

Because the "return" is fictional. You get no return on Tesla. No dividends. You make money when you sell it. Buy it today, sell it next year, make 10%. Buy it today sell it in 10 years make 3000%. It is just math.

[@Martinit0]

No you are misunderstanding: Tesla can maintain a 10% profit margin WHILE GROWING at 35% CAGR. All other major automakers are either declining or in steady state.

[@lorisbiancheri1194]

@@Martinit0 no I’m not misunderstanding. The DCF model has a required rate of return of 10% and needs 35% CAGR growth to justify the current valuation. This means that as an investor you’d expect to make a 10% yearly return on your investment if the company grows 35% a year

[@RuelMorales]

Amazing analysis. Thank you for what you do.

[@wesleyscoggin2031]

Excellent video! You're a great follow on Twitter. Happy to have found you on KZbin, keep up the great work.

[@BrianFeroldiYT]

Glad you found me here too!

[@edgaroscarlopez465]

Really good Video

[@goleadorvenezolano]

Amazing analysis!

[@BrianFeroldiYT]

Thanks

[@Psycho-Sapiens]

Nice overview 👍

[@israelbalolong4494]

Well said.

[@Crunch_dGH]

No worries! Re: Tesla Capacity Expansion. And with Autobidder, match prices to demand for keeping their rapidly expanding factories humming at optimum levels (while keeping suppliers happy). Nice to have 8.5x BYD’s margins (the only other net cash flow EV) to “play” with! Meanwhile, Re: Earnings Call. Crash the price, so more can buy, to soon afford an EV. MISSION ACCOMPLISHED! As for the earnings debate, why is it so impossible for ANYONE (present company excepted) to take Elon at his word? What if one merely assumes that he is a master manipulator who anticipates all possible responses to his quips, stutters, & “mid-speaks” that are well calculated (like all he does) to produce the result that HE desires? Why wouldn’t he do that, as a matter of course? Given the macro & corporate context, NOW would be the optimal time to crash TSLA with the least risks of the stock fully recovering, by the time of which, the stock will likely be boosted by circumstances to even greater heights? The result of this “plan” are the maximum of his beloved “small investors” to partake AND their subsequent likelihood to buy an EV, thus satisfying Tesla’s primary objective. I.e., Try & be sufficiently humble to second guess your OWN urge to second guess the Master. Aka, hoard cash on the Ups & buy as Dips bottom (NOT $CAing). Re: FSD Licensing. Vehicular automation is highly dependent (for OTA & systems integration) on componentry compatibility which ONLY bespoke EV designs have. That’s why all of VW’s 40k army of (generic) programmers & boasting could never deliver OTA, let alone automated navigation. All Legacies must revamp their designs, which includes forcing their suppliers to comply with dictated specifications or simply going vertical. The first to make that leap (Mercedes, due to fewer models to retrofit & greater supplier dominance?) will be the first up to be positioned to accept FSD licensing.

[@polomarkos]

What exactly is storage deployed at the operational summary?

[@BrianFeroldiYT]

Megapack -- grid level battery charging

[@paulcosta8930]

Great presentation! Thank you!🤑🤑

[@BrianFeroldiYT]

Glad you liked it!

[@pithaksmanratanastien3493]

Thank you 🙏

[@BrianFeroldiYT]

You’re welcome 😊

[@the_starlinkway7821]

Also licensing the FSD software BEFORE tesla is able to sell all their Teslas, it would actually canibalize Tesla sales. So I think it’s too early to sel FSD before all your factories are at 100% capacity.

[@SoltariTrooper]

Agreed. May be partial limited licensing with conditions attached. Not full licensing to competitors yet.

[@davidbeppler3032]

If Tesla licensed out FSD today... how many years until Ford could get Tesla FSD working in a vehicle sold to consumers? 2030? 2035?

[@nguyenngoctoan]

Wrong, they would make more margin than selling cars

[@Martinit0]

Licensing would ALWAYS be with conditions attached and subject to termination. I imagine: only subscription-based, no perpetual license. No operation as (commercial) robotaxi for non-Tesla vehicles, i.e. end customers may only use for private purposes. Also remember that licensing terms and pricing can change. Tesla not happy -> increase FSD license price or terminate the license (as last resort). The bigger issue I see is in managing quality of operations and associated (potential) brand damage to Tesla should any of those third-party vehicles get in too many accidents.

[@commuterbranchline8132]

In the long term, Tesla has become CHOAM, the world just hasn’t realised it yet. Is Elon talking on the call having the effect of cooling the stock down a little? He did say he wasn’t going to be on calls unless there was something really really import!? Elon doesn’t play the Wall St Analysts games and if they don’t get what they need they act a certain way. Elon knows this, but he doesn’t care about quarterly reports or their opinions as the company fundamentals are very strong.

[@masculineleadership]

What does CHOAM mean?

[@Martinit0]

@@masculineleadership Chief Holder Of All Monopoly

[@g1984AF]

I love the company. But I do think the stock price is too high

[@gerritjanboeve]

What do you think is going to happen to the balance sheet once tesla sales decline? Competition is only increasing, Cybertruck is gonna cost serious margin and then there's Elon's erratic behaviour. There is a reason Tesla is the most shorted stock around.

[@sssandhu78]

Price to Sales of 12. A car company that is selling like an expensive software company. This company needs perfect execution to get your money back.

[@Martinit0]

That's like arguing "Look, to 10x the share in a decade you need perfect execution - what if it only 5x in ten years?"

[@adrianb4638]

👍🏼

[@litestuffllc7249]

all you optimists - the poor earnings per share dropping Pe to 80; has shaken a lot of EV investors. Roth Capital partners based on actual current financials valued Tesla stock at $85. Of course optimists say what about AI, what about FSD; what bout Cybertruck; aren't they going to make this all fly high? Maybe but you can't eat maybes.

[@UziGameGP]

Roth capital XD they dont even have sell rating. Absolute clown

[@rogerstarkey5390]

$85 is the "maybe"

[@user-fb8jb5yi6g]

I'm optistic about the move to sustainable energy. Every country on the planet is going full tilt towards renewable. That's what I'm optimistic about. Storage will eventually over take the auto income.

[@HM-hu4hu]

Roth Capital has been wrong about Tesla for what, more than a decade? And they evidently can't do math.

[@michaelholmes8848]

🤡

[@swphilosophy3040]

🤦‍♂️🤦‍♂️🤦‍♂️

[@davidbeppler3032]

Tesla Valuation is going up again?! SELL! SELL! SELL!