TESLA STOCK ANALYSIS - Will It Recover Soon? Undervalued Now?

[@TheIntelligentInvestor]

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[@donjohnson4368]

Another gem. More uploads please

[@Legola87]

Hi Vic! The good stuff: decent story-telling, but missed out on the story on Energy segment growth - 4680 battery ramp and decentralized power grids! Improvements needed: 1.) Still using WACC as discount rate? I though you corrected to cost of equity a few videos ago? 2.) Need explanation on the reasoning behind why you use Wall Street (seekingalpha) CAGR growth estimates for TSLA. 3.) Most importantly, need to explain reasoning behind why you extrapolate the future FCF that way - CAGR and number of years, why stop extrapolating at 2028? Why choose 2029 as the year terminal growth rate occurs? 4.) Need observations about important macro indicators. This is the easiest part to do. Can start with: 4.1) Treasury yield curve, 4.2) spread between CME Fed fund futures VS FOMC median Fed fund rate expectations (found in the Summary of Economic Projections and the Fed Dot Plot), 4.3) UoM Consumer Sentiment readings.

[@TheIntelligentInvestor]

Wow, that's a long list. lol. 1) I don't use the traditional WACC. I usually use a discount rate (e.g. 9.0% to 11.50%) that is very close to the cost of the equity. 2) I often use Wall Street consensus revenue forecasts for comparison. I think my CAGR rates are slightly lower than the consensus revenue forecasts. 3) It's nearly impossible to forecast anything longer than 5 years, so I just choose a 5-year period instead of a 10-year period. 4) I totally forgot talking about the storage and energy products/services growing much faster than the EV business. It took me about 30 hours to research and make this video, so it's a lot of work. 5) The video would be too long if I cover everything. I usually focus on the most important catalysts (e.g. next-gen platform, FSD, EV demand, competition with BYD, lower interest rates going forward). 6) Tesla has many projects and other businesses. I'll probably talk about the other things you suggested in future Tesla videos.

[@sarbilandkhan5800]

Would love to hear from you if you still think Tesla is a buy after a brutal last week?

[@TheIntelligentInvestor]

Yeah, thanks for asking. I’m going to make an updated Tesla analysis video within these few weeks. I’ll likely buy the dip.

[@amidi39]

You are great and honest. Thanks.

[@sarochb]

Thank you. Very thorough analysis.

[@TheIntelligentInvestor]

Thanks for watching!

[@jmcr412]

My concern with TESLA is that the valuation indicators are still extremely high comparing to its peers: P/E, MC/FCF etc... It would be nice if you had commented on that. Anyway, good analysis as always ;)

[@uoiuo]

It is all about the growth , this year there will be little growth , but the next gen vehicle is coming and Elon said they will use never seen manufacturing techniques . Model Y refresh is coming and its the best selling car worldwide , cybertruck and semi's and ramping , 4680 aswell although alot slower than expected . Energy buisness is growing fast . I don't think its fair to value Tesla the same as other car manufactuers . Its valued at less than 2x Toyota's . Also P/E , MC / FCF are fine to look at but could be useless if they suddenly announce some huge earnings and forward earnings potential . Nvidia had weak earnings 2022 , had high P/E and look at what the stock did when they set their growth guidance , its all about the growth , Tesla said they are in bettwen growth waves , people are waiting for model Y refresh and many people wait for model 2 because they can't afford cars in high interest rate enviroment .

[@TheIntelligentInvestor]

Good questions. I don't talk about the traditional TTM valuation metrics (e.g. P/E, price-to-FCF) because they are "backward-looking" ratios. These traditional ratios can be very misleading. E.g. Nvidia used to have a much higher P/E than Intel a few years ago while Intel had a very low P/E, but in hindsight Nvidia was much more undervalued while Intel was overvalued. These traditional TTM valuation metrics don't reflect the company's long-term growth and prospects. We have to be forward-looking when we invest, so I mainly use DCF models since they're forward-looking.

[@TheFinancialScout]

Thank you for another great video.

[@TheIntelligentInvestor]

Thx for watching!

[@robertsmith6408]

You have your Xmas tree still up! TSLY is another great div if your a Tesla investor. TSLY pays my mortgage payment each month!

[@uoiuo]

Great analysis , I think Tesla stock right now is very attractive compared to other tech stocks . It has alot of bad news priced in (low 2024 growth , Elon news FUD etc . etc . ) . I think the market is way too optimistic on other tech stocks and way too pessimistic on Tesla . When interest rates start going down and the next gen vehicles comes around i belive the stock will make a huge jump . Elon said they will use some manufacturing techniques that are never seen before for the new gen vehicle , also the model Y refresh is coming . On top of that FSD will be huge if its works out and energy buissness is scaling fast aswell .

[@TheIntelligentInvestor]

Yeah, this happened to Tesla so many times in the past. I think a lot of these negative news about Elon is just market noise. I don't think they affect Tesla over the long term. What's important right now is that rates will eventually come down. I think EV demand will eventually recover. Like you said, Tesla will introduce the next-gen car platform, new manufacturing processes/technologies to reduce cost, FSD V12, insurance, energy and storage products, and eventually AI bots.

[@owendavies8227]

Personally, I think that tesla is worth around $500 billion right now, so I won't be investing any time soon. Honestly, around half of my portfolio is bonds right now since there are so few opportunities. I feel like there's a good chance prices will drop on stocks soon due to the smaller number of opportunities than usual (and to a lesser extent because of the inverted bond yield curve)

[@sethaaron95]

Can you please do an updated video on MA and V

[@TheIntelligentInvestor]

Yeah, probably sometime over the next few months. I made videos about MA and V when they're very undervalued before.

[@austinitel.2972]

Hi, when tesla reaches $1Trillion, what stock price will it be at?

[@vectorgaming5395]

What will be the stock price at when Tesla reaches 1 Trillion?

[@1i1x]

Please Roblox analysis! I've been all-in since the lows and it had strong earnings just now. I would like to know what you think of the earnings and valuation.

[@um31666]

Could you cover Palantir as well?

[@TheIntelligentInvestor]

Thanks for suggesting, I'll probably cover Palantir later on.

[@Nora20273]

Great analysis. However I think china cannot lead the EV just like they produce most smartphones but still can’t beat iPhone. Unless in the future EV and smartphone becomes products like TV

[@TheIntelligentInvestor]

Yeah. I think it'll be more like Tesla vs everyone else in the future (similar to iPhone vs all the Android smartphones from different OEMs). As far as I know, only Tesla and BYD are making profits consistently from selling EVs because they have achieved very large economies of scales, while almost all the rest EV makers (Chinese and Western car makers) are losing a lot of money for each EV they sell because their cost per EV is much higher.

[@austinitel.2972]

i hope it goes up if not i will really cry🥲

[@TheIntelligentInvestor]

What happened? You bought options?

[@austinitel.2972]

@@TheIntelligentInvestor I asked my elderly parents to invest lol, now they have a huge unrealized loss. Once tesla goes back to 250/270 range, we are exiting tesla for good.