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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

#181

Post by notJim »

ethbro wrote: post #152
Reedx wrote: post #120

Earlier quoted context omitted.

That's a good point, though this may still happen between superchargers and Telsa apps/games - which could leverage your historical driving data.

> Telsa apps/games This is the only thing that remotely justifies their current valuation. If you expect them to crush it in China + monetize their install base via creating an app platform for 3rd party apps + get to self-driving. People forget that EVs are going to likely be on the road a lot longer than ICEVs, due to lower wear-and-tear. Past battery capacity degradation, there isn't much to break.

> People forget that EVs are going to likely be on the road a lot longer than ICEVs, due to lower wear-and-tear. Past battery capacity degradation, there isn't much to break.

People always say this, but I'm a bit skeptical. I own a 13 year-old Toyota with 200k+ miles on it, and the things that break are more like suspension parts, wheel bearings, etc. I think drivetrains are pretty reliable at this point.

Re: Tesla races past $100B in market valuation

#182

Post by riantogo »

UncleMeat wrote: post #98
himinlomax wrote: post #28

Earlier quoted context omitted.

I can see one good reason: the rest of the auto industry is playing catch up with Tesla. Nobody else afaik is even able to do over the air updates (reliable updates, that is). They have a charging network, the competition basically doesn't and can't seem to get their act together, and that's not even really a technological issue.

Charging network doesn’t matter. You can charge an ev at home. The number of times you need to charge elsewhere is far far far lower than it is for internal combustion cars. If evs are truly the future then homes and apartments will have charging.

Charging network matters. Else EVs will never be a consideration as a primary car. Ask any Tesla owner and they will tell you (even though usage is occasional).

Re: Tesla races past $100B in market valuation

#183

Post by _ea1k »

xedeon wrote: post #138
WBrad wrote: post #95

Earlier quoted context omitted.

Elon has received billions from the US government across his companies. It'd be a slap in the face to the entire US population for Tesla to have a 100% proprietary charging network when we helped get the company going.

You mean the $451.8M Department of Energy loan they used to buy the old NUMMI Toyata plant? Yeah.... They paid that off nine years early with interest. Try again. https://www.tesla.com/blog/tesla-repays-department-energy-lo... Meanwhile, why don't we talk about the GM bailout money? If you can cite a source for the "billions" you mentioned, that would be great to read, since I must've missed that one.

I'm pretty sure that Tesla managed to get at least 400,000 cars sold in the US before fully phasing out of the tax credit. That's between 1.5 billion and 2.5 billion, depending upon how you estimate it.

EDIT: Also, this amounts to fewer than 50,000 cars in revenue. Sales restrictions in various states have probably cost them more in sales than they gained in tax benefits.

Re: Tesla races past $100B in market valuation

#184

Post by zamfi »

bryanlarsen wrote: post #148
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…

A $100B market cap for a fast growing company with $25B in annual sales is on the cheap side, if anything. The real question is why is VWAGY valued so poorly? A $100B market cap for a company with $240B in annual sales means the market is quite pessimistic about VW.

Revenue isn't earnings.

A $100B market cap for a fast-growing company with ~$0 profit is definitely not "on the cheap side".

But I agree that a $100B market cap for a company with ~$13B in profit is quite pessimistic. VW's future is cloudy.

Re: Tesla races past $100B in market valuation

#185

Post by nabla9 »

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 Tesla's revenue and profit margin equal Toyota 10 years from now, I can't see it being worth $100B today. Permanently higher product margins and no viable competition?

Re: Tesla races past $100B in market valuation

#186

Post by jasonlingx »

UncleMeat wrote: post #88
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…

I really don’t like the “well if you feel strongly why don’t you short” argument. I think it is insane that Tesla is worth so much. But shorting stocks is not part of the asset allocation that meets my long term goals and needs. I can certainly believe something without wanting to bet on it.

The thing is the market only cares about the opinion of those who put their money where their mouth is.

Re: Tesla races past $100B in market valuation

#187

Post by TekMol »

davidivadavid wrote: post #161
TekMol wrote: post #109

Earlier quoted context omitted.

It is not specific to Tesla. https://en.wikipedia.org/wiki/Present_value If we assume a 3% inflation rate, 2030s earnings need to be discounted by 34%. 2040s earnings by 56%. And 2040s earnings by 71%. As you can see, even 2040 earnings still have a substantial impact on today's value.

Erm, I know what present value is. The discount rate for Tesla is not 3%, unless you think it's a risk-free asset (it's not).

   unless you think it's a risk-free asset
And unless your risk aversion is zero. Which more or less holds true for me. (Aka, playing a game of coin tossing where head wins a dollar and tail loses a dollar does not make me uncomfortable).

Otherwise it depends on:

1) Your risk aversion

2) The percentage of your portfolio you intend to invest into Tesla

3) How correlated your portfolio is to Tesla

If you only invest a sufficiently small amount (compared to your overall portfolio) into something, then the overall risk of your portfolio will go down. No matter how volatile that something is. So in that case, there also is no need to discount future earnings except for expected inflation.

Re: Tesla races past $100B in market valuation

#190

Post by mlyle »

rjkennedy98 wrote: post #62
sombremesa wrote: post #49

Earlier quoted context omitted.

> 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…

> why not take out a short position? To quote John Maynard Keynes, “The market can stay irrational longer than you can stay solvent"

Yup. And the cost of time on Tesla options right now is insane. $590 puts for April cost ~$66.
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