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Tesla races past $100B in market valuation

reuters.com

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Re: Tesla races past $100B in market valuation

#261

Post by sailingparrot »

nabla9 wrote: post #185

All I see is verbal narratives that don't justify the price. Just saying that Tesla is good company, grows fast, has advantage, is not enough. Everything can be overvalued. Narratives without numbers are just as valid for $100B valuation as they are for $500B or $1 Trillion. Has any Tesla investor done the investor math justifying the price compared against SP500 Index Fund for 6% total return for example. Even if Te…

> Has any Tesla investor done the investor math justifying the price compared agaomst SP500 Index Fund for 6% total return for example.

Come on, no one does this for any stock. No stock has a value exactly in-line with math would tell you. Stocks like Amazon have been completely overvalued (as compared to what math tells you) for close to 20 years. If you haven't yet learned that stock markets are based more around hype and emotions than math, don't invest.

Re: Tesla races past $100B in market valuation

#262

Post by londons_explore »

TomVDB wrote: post #117
nicoburns wrote: post #89

Earlier quoted context omitted.

Do most apple hardware users use those apps? I'd imagine at least as many if not more use google photos + whatsapp or facebook messenger.

WhatsApp is pretty popular, but Google Photos? The vast majority of people take a picture with the standard camera app and never look at the pictures again. You don’t need a non-native app for that.

Iphone doesn't let you search photos really - try searching for "photos of me skiing" or "igloo picture" and you'll soon find google photos is way ahead.

Re: Tesla races past $100B in market valuation

#263

Post by mediaman »

trhway wrote: post #196
mediaman wrote: post #163

Earlier quoted context omitted.

ARR is not a synonym for "revenue." Tesla's total revenue was $6.3bn for the last reported quarter, an annual run rate of $25.2bn. That's all sales, nearly all of which are sales of new vehicles. Sales of durable new vehicles does not fit the definition of "annual recurring revenue" by any stretch of the imagination. ARR is valued highly because it implies steady revenue from each customer. Less the churn rate, it ma…

"annualized run rate" is useful for growing companies and has nothing to do with "recurring". Why would you use "recurring" in the context of Tesla?!

ARR most commonly refers to recurring revenues, especially in the context of premium valuation multiples on revenue. Annual run rate is usually used for small businesses trying to extrapolate out a monthly revenue number. For quarterly publicly traded 10Q numbers, most analysts just say "annualized". But, that's all semantics.

Also, 10x sales is out of line for big tech companies. Most are more like 5-7x. True, a little higher than Tesla's 4x, but their economics are very dissimilar. Apple, which is typically trotted out as a "manufacturer", actually offloads all the lower margin manufacturing to other companies, and their margins show it.

Re: Tesla races past $100B in market valuation

#264

Post by whack »

sombremesa wrote: post #49
reilly3000 wrote: post #17

Earlier quoted context omitted.

With each car they get a lifetime of service revenue, mostly without competition. They expand their network effect, their supercharger footprint, and their technology lead as they maintain momentum. Cybertruck is poised to be a giant success, reaching into new markets outside of traditional EV buyers and into rural and suburban light trucks, the highest margin section of auto sales. Finally, its prominence attracts u…

> Perhaps it’s still overvalued beyond all of those factors. If you feel strongly about that, why not take out a short position? The issue with that is that GP is arguing that this stock's investors continue to behave irrationally. There is no reason to believe they are going to suddenly behave rationally. Thus, a short position is inadvisable. If you are a value investor, the right thing to do is to just not invest…

If you're investing with a 5 year time horizon, sure. If you're investing with a 20-30 year time horizon, and you're convinced that Tesla is overvalued, you should absolutely short it. Whatever "reality distortion" you are suspecting, is not going to last for 20 years. Eventually, when the promised profits and growth fail to materialize, the stock price will drop back down to its fundamentals and you will make a killing (if you're right)

Every time this discussion happens, people trot out the quote about markets staying irrational longer than you staying solvent. This quote is only ever relevant if you're leveraged, or if you're at risk of someone else forcing you to exit your short position. If you're an individual investor with a 20 year time horizon, shorting a stock with less than 5% of your portfolio, you don't have to worry about either. You absolutely can stay solvent longer than the market can stay irrational.

The real reason people don't go shorting TSLA nearly as much as you would think, is because Tesla's future isn't nearly close to a foregone conclusion. It's a lot more fun to make bold predictions with absolute confidence when you don't have anything to lose.

Re: Tesla races past $100B in market valuation

#265

Post by spydum »

Quarrelsome wrote: post #218
spydum wrote: post #76

Earlier quoted context omitted.

In what way? Sign updates, validate signature, and only apply when car is off and at home charging. Maybe some POST/rollback logic even possible. It's not much different than going to a dealer to get ECU flashed.

In the way that it suddenly becomes technically plausible to make a certain % of vehicles turn into oncoming traffic on a Monday morning. OR Make every car on a particular road at a particular time, hit full speed and hit a particular target. Cars are like crap missiles so making them potentially exploitable is a bit risky.

But even non OTA cars with lane assist and such have this same threat vector. If attacker compromise the vehicle code supply chain to introduce such a thing, whether it got loaded via OTA update or flashed by dealer when I took it in for service makes no major difference. If anything, it's more likely that OTA updates mean they can remediate REAL bugs that save lives across a vast majority of cars in record time (vs recalls and in person flashing).

Re: Tesla races past $100B in market valuation

#266

Post by ctdonath »

SilasX wrote: post #221
shyn3 wrote: post #111

Earlier quoted context omitted.

Everyone seems to miss the biggest reason why Tesla has won and the other companies won't be able to catch them. The dealer network. The Nissan Leaf came out and was way ahead of everyone but nobody bought it because they couldn't find it. The dealers would hide the car in the back and avoid showing it to you. There was no incentive for them to get you in a Nissan Leaf because they would make profits, negligible ones…

Is ... that really true? That (traditional) car dealers discourage purchase of low-maintenance cars? As you note, that seems like a dangerous case of misaligned incentives between the manufacturer/driver vs dealer.

Most ICE dealers have a high-dollar repair shop as part of the facility. Yes, the incentives do not work out in the buyer's favor: complex high-maintenance parts ensure the cars don't last all that long without pricy repairs, and parts obsolescence assures cars aren't maintained much past 200K miles[0].

In contrast, Tesla's low-maintenance high-mileage design means Tesla need not worry much about parts & repair at all, and focus on simply selling new cars. People will get rid of cars not so much because of repair issues, but because they're bored of it after 1-2 decades.

[0] - I'm now suffering from inability to find a replacement computer for my SUV. Car is mostly fine, but extreme limited availability of even used components means it has been in the shop for over a month, and may have to be sold for parts for want of one.

Re: Tesla races past $100B in market valuation

#267

Post by londons_explore »

drunner wrote: post #253
nerdkid93 wrote: post #2

I for the life of me cannot figure out what could possibly justify this valuation for Tesla. Sure, their cars are pretty great, they have a ravid fanbase, and they have a pretty entertaining CEO who excels at driving interest in the company. They would need to execute perfectly and deliver more cars to customers than Volkswagen in a few years to justify such a valuation right now, and I just don't see that happening…

To me, its the next big bubble out there. We had dotcom, we had subprime mortgage, next we have the VC bubble. Tesla has had 5 profitable quarters in 10 years. Uber loses billions of dollars a quarter. Chalk it up to R&D or whatever you want, but this is only sustainable because of this giant bull run. When the money starts to dry up, these companies are going to implode.

When half the nations market cap and everyone's pension funds are wrapped up in it, it won't be allowed to implode.

Instead, the government will give emergency cash injections so all the investors don't loose much. Instead all holders of US currency and taxpayers will pay for it via more government debt and inflation.

Re: Tesla races past $100B in market valuation

#268

Post by aynyc »

philosopher1234 wrote: post #149
aynyc wrote: post #40

I don't know how to value a stock, but after riding in my friend's Tesla a few times on road trips. I seriously doubt I'll buy a ICE car ever again unless for specific purposes (mini-van). I know 10 people who owns Tesla, the 6 or so friends I've spoken about it feel the same way as I do. If this keeps up, I think Tesla's stock price is under valued.

I appreciate that you liked the experience, but since I have not had that experience, would you mind explaining what it is that made you feel so strongly about the car?

It's really difficult to describe. The feeling of driving it is like the first time I rode my motorcycle on the highway. It was fear and excitement. The acceleration is unbelievable. It also has great visibility, much better than a lot of other sedans. With a family, I'm the designated driver, the car is incredibly quite. I can have a normal conversation with my daughter without her shouting. The list goes on. I honestly didn't think I would like the Tesla. But now my next car will be Tesla or a van.

* The Tesla I rode in is the Model 3. My current car is a Subaru Outback.

Re: Tesla races past $100B in market valuation

#269

Post by SpicyLemonZest »

onlyrealcuzzo wrote: post #141
SpicyLemonZest wrote: post #107

Earlier quoted context omitted.

Where'd you get that number from? The sources I can find say Apple's gross margin is a bit under 40%. (Tesla's by comparison hovers around 20%.)

Most of Apple's profits -- as of a few years ago -- came from iPhone sales. I'm pretty sure this is still true. In ~2015, the iPhone had a 63% margin. It looks like the company as a whole averages a ~40% gross margin [1]. Tesla's appears to be closer to ~15%, with many highly negative quarters [2]. Of course, net income to revenue is probably more important to look at in this case. Apple's is consistently above ~20%.…

I don’t follow. Why must people think that Tesla will be worth 10 times its current value? The pro-Tesla argument I’ve typically seen is that they’ve already demonstrated they’re better than other manufacturers and it’s just a matter of cleaning up their production pipeline. Have you seen anyone in particular argue that Tesla will be valued at $1T in 2030?

Re: Tesla races past $100B in market valuation

#270

Post by aynyc »

njarboe wrote: post #165
aynyc wrote: post #40

I don't know how to value a stock, but after riding in my friend's Tesla a few times on road trips. I seriously doubt I'll buy a ICE car ever again unless for specific purposes (mini-van). I know 10 people who owns Tesla, the 6 or so friends I've spoken about it feel the same way as I do. If this keeps up, I think Tesla's stock price is under valued.

The Model-X is really like a mini-van. High price, but similar functionality. Seats five adults + two kids. Maybe Tesla will drop the price over time. I think Elon Musk built it as the car he would want to take his family around in. He later said he regretted building that model as it took too long to develop and set back introducing the model three by a year or two.

Don't the kids seats face backwards?
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