Hello everyone welcome your website today I am going to discuss about “ Fundamental analysis of tesla Inc stock “. In this time many people want to invest in stock market and particular stock of that company. By this article I discussed about fundamentals of tesla Inc stock. So stay with us
About tesla Inc company
Tesla is an electric car manufacturer company. The founder of this company is Martin Eberhard. There is one thought that Elon musk is the primary founder of this company but Elon musk who was funded or invest in this company. He invested 90 crore in tesla motors. It was founded in 2003. It’s headquarter is in Palo Alto, California (U.S.). The present CEO of this company is Elon musk.
Tesla motors achieves best safety rating of any car ever tested. While the other car manufacturing companies spend a lot of money on advertising. Tesla advertising spending is 0. Tesla doesn’t spend any money advertising it’s cars. Selleing cars is the main source of revenue for tesla. Most of the revenue earned by tesla is from car sales But it not the only source of revenue. So what other sources of revenue does tesla have? Its source of rvenue can be divide into 3 main categories –
- Automotive – that include car sales.
- Energy Business – the energy business of tesla.
- Servicing – servicing the cars is also a source of revenue for the company.
Growth catalyst of tesla
Tesla’s most important long term growth catalyst is ramping up productions for model3, model y and the upcoming cybertruck. Model 3 and model Y are the main products that are driving tesla’s revenue growth. As of now, the demand for tesla model 3 and model y exceeds the supply.For example, if you want to buy a model 3 you will likely need to wait for at least 3 to 6 months for vehicle delivery. Chip shortage is the biggest reason that is causing tesla to delay its vehicle deliveries.
Tesla is delaying cybertruck’s release to at least 2023 became the cybertruck has many new technologies that will need more time for tesla to work through and because elon musk wants to bring down cybertruck’s average cost per vehicle to make it affordable. Tesla may eventually release its 25,000 dollar car after releasing the cybertruck. However elon musk said his company is not working on the 25,000 dollar car yet.
Tesla will also release the semitruck and tesla roadster. I belive all these new vehicles, Especially the cybertruck, will become large growth drivers for tesla later on because of the enormous demand for tesla electric vehicles. However, I expect their releases will be delayed because of the current chip shortage. There are two other important catagories I want to talk about here. The first is tesla’s full self driving (FSD) service which lead to robotaxi service. Elon musk said this in recent earnings call : “ so over time, we think full self- driving will become the most important source of profitability for tesla “ and I think we are completely confident at this point it will be achived. And my personal guess is that we’ll achieve full self – driving this year, with data safety level significantly greater than the present. So you know, the cars in the fleet essentially become self – driving by a software update.
Risk in tesla inc stock
- Chip Shortage : tesla is biggest risk in the short term is chip shortage. As of now, all the car manufacturer, including tesla are greatly impacted by supply chainissues, esoacially chip shortages. Elon musk said this : “In 2022, supplu chain will continue to be the fundamental limiter of output across all factories. So the chip shortage, while better than last year, is still an issue.” Management expects that tesla will achieve above 50 % vehicle delivery growth over 2021. This means we can expect tesla will deliver above 1.4 million vehicles in 2022. However, if the globel chip shortage continues throughout 2022 and 2003, it will limit tesla’s annual vehicle delivery growth. Elon musk said this about tesla’s potential growth if there are no supply chain issues and no chip shortage. He said if we’re simply able to respond to demand, it might grow by like 200% or 300% or something, you know , as opposed to sort of 50% or something.”
- Delaying New Product releases – Tesla’s 2nd biggest risk is delaying new product releases such as the cybertruck and the 25,000 dollar electric vehicle. Tesla is delaying Cybertruck release to 2023 or later it still needs time to work through the new technologies in the cybertruck and because elon musk wants to make sure the cybertruck is affordable for the mass consumers. Tesla is not working on the 25,000 dollars car yet because the company needs to focus all its resources to increase the productions for model 3 and model Y in fermont factory, shanghai factory and tesla’s upcoming company texas and berlin factories. Tesla’s production is still contrined by chip shortage. Management said this in the recent earnings call : “ The fundamental focus of tesla this year is scaling output.
- Increasing competition – As of now, most traditional carmakers, such as GM, BMW, Volkwagen, Porsche, Daimler and Ford, have started making their own EVs.
Tesla stock valuation
We use this intrinsic value calculator to calculate the stock’s fair intrinsic value, So we will know whether the stock is overvalued, fairly valued or undervalued. If we forecast Tesla’s free cash flow to the present day. Tesla’s Intrinsic value should be around 916 $ billion for the entire company or 912$ / share.
Will I buy tesla stock
Yes, you can buy more tesla shares if it becomes undervalued because I like tesla’s competitive advantage and because Tesla will continue to dominate in the automous driving and EV market for many years but once again it’s totally dependent on your condition but nothing is stable in stock market . Invest your money after calculating the risk reward ratio . Don’t invest your needy money in stocks and invest for long term.
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