Editing Test update

On 24th January 2024, Tesla announced its fourth quarter results, covering the period ended 31st December 2023.

The key highlight of the results is that the total number of vehicles delivered in the year increased by 38% to 1,808,581.

Assuming that the average selling price of the vehicles is unchanged from the last reported price ($ccc on ccc), then the estimated revenue generated in the year is $ccc. The figure compares to the Stockhub consensus forecast of $ccc, a difference of $ccc in absolute terms and ccc% in relative terms. To reflect the difference, we adjust our standard deviation assumption by ccc. All other assumptions are unchanged.

The adjustment results in a ccc% change to the target price, increasing the price to $ccc (from $ccc). Accordingly, ultimately, the investment remains a 'suitable' one.

== What's the news? ==
On 24th January 2024, Tesla announced its fourth quarter results, covering the period ended 31st December 2023.

The key highlight of the results is that the total number of vehicles delivered in the year increased by 38% to 1,808,581. Other key highlights can be found in the table below. 

No details about the sales price is provided in the announcement.
{| class="wikitable"
|+Summary
!
!
! colspan="2" |Q4 2023
! colspan="2" |FY2023
|-
|
|
|Actual
|Change (%)
|Actual
|Change (%)
|-
| rowspan="3" |Model 3/Y
|Production
|476,777
|
|1,775,159
|
|-
|Deliveries
|461,538
|
|1,739,707
|
|-
|Subject to operating lease accounting
|2%
|
|
|
|-
| rowspan="3" |Other models
|Production
|18,212
|
|70,826
|
|-
|Deliveries
|22,969
|
|68,874
|
|-
|Subject to operating lease accounting
|3%
|
|
|
|-
| rowspan="3" |Total
|Production
|494,989
|
|1,845,985
|35%
|-
|Deliveries
|484,507
|
|1,808,581
|38%
|-
|Subject to operating lease accounting
|2%
|
|
|
|}

== How does the news impact the investment thesis of the company? ==
Assuming that the average selling price of the vehicles is unchanged from the last reported price ($ccc on ccc), then the estimated revenue generated in the quarter is $ccc and in the year is $ccc.

The annual figure compares to the Stockhub consensus forecast of $ccc, a difference of $ccc in absolute terms and cccc% in relative terms. To reflect the difference, we adjust our standard deviation assumption by ccc. All other assumptions are unchanged.

The adjustment results in a ccc% change to the target price, increasing the price to $ccc (from $ccc). Accordingly, ultimately, the investment remains a 'suitable' one.
{| class="wikitable"
|+Forecast change(s)
!Year
! colspan="4" |1
! colspan="4" |2
! colspan="4" |3
! colspan="4" |4
|-
!
! colspan="2" |Forecast
! colspan="2" |Forecast change
! colspan="2" |Forecast
! colspan="2" |Forecast change
! colspan="2" |Forecast
! colspan="2" |Forecast change
! colspan="2" |Forecast
! colspan="2" |Forecast change
|-
!
!New 
!Old 
!Absolute
!Relative 
!New 
!Old 
!Absolute
!Relative 
!New 
!Old 
!Absolute
!Relative 
!New 
!Old 
!Absolute
!Relative 
|-
|Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|-
|Cost of goods sold
|
|
|
|
|
|
|
|
|
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|
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|
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|-
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|-
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|}

{| class="wikitable"
|+Assumption change(s)
!
!New assumption
!Old assumption
!Commentary
!Resulting target price absolute change
!Resulting target price relative change (%)
!Assumption absolute change
!Assumption relative change (%)
|-
| colspan="8" |<div style="text-align: center;">'''Revenue'''</div>
|-
|What's the estimated current size of the total addressable market?
|$2,975,000,000
|$2,975,000,000
|Here, the total addressable market (TAM) is defined as the global automotive market, and based on a number of assumptions, it is estimated that the size of the market as of today (30th May 2022), in terms of revenue, is $2.975 trillion.


If the TAM is defined as the global energy market, then research suggests that the estimated size of the market is $6.777 trillion.<ref name=":16">https://www.ucl.ac.uk/bartlett/sustainable/sites/bartlett/files/an_exploration_of_energy_cost_ranges_limits_and_adjustment_process.pdf</ref>
|Zero
|Zero
|Zero
|Zero
|-
|What is the estimated company lifespan?
|60 years
|60 years
|Tesla employs around 110,000, making the company a large organisation (more than 10,000 employees), and research shows that the average lifespan of a large corporation is around 50 years.<ref>Stadler, Enduring Success, 3–5.</ref>
|Zero
|Zero
|Zero
|Zero
|-
|What's the estimated annual growth rate of the total addressable market over the lifecycle of the company?
|3%
|3%
|Research shows that the growth rate of the global automotive market (i.e. the total addressable market) is similar to the growth rate of global gross domestic product<ref>http://www.robertpicard.net/files/econgrowthandadvertising.pdf</ref>, which has averaged (medium) around 3% per year in the last 20 years (2001 to 2022)<ref>https://www.macrotrends.net/countries/WLD/world/gdp-growth-rate</ref>.
|Zero
|Zero
|Zero
|Zero
|-
|What's the estimated company peak market share?
|10%
|10%
|The Stockhub users estimate that especially given the leadership of the company, the peak market share of Tesla is around 10%, and, therefore, suggests using the share amount here. As of 31st December 2021, Tesla's current share of the market is estimated at around 1.8%.
|Zero
|Zero
|Zero
|Zero
|-
|Which distribution function do you want to use to estimate company revenue?
|Gaussian
|Gaussian
|Research suggests that the revenue pattern of companies is similar to the pattern produced by the Gaussian distribution function  (i.e. the revenue distribution is bell shaped)<ref>http://escml.umd.edu/Papers/ObsCPMT.pdf</ref>, so the Stockhub users suggest using that function here.
|Zero
|Zero
|Zero
|Zero
|-
|What's the estimated standard deviation of company revenue?
|6 years
|6 years
|Another way of asking this question is this way: within how many years either side of the mean does 68% of revenue occur? Based on Tesla's current revenue amount (i.e. $54 billion) and Tesla's estimated lifespan (i.e. 60 years) and Tesla's estimated current stage of its lifecycle (i.e. growth stage), the Stockhub users suggest using 6 years (i.e. 68% of all sales happen within 6 years either side of the mean year), so that's what's used here.
|Zero
|Zero
|Zero
|Zero
|-
| colspan="8" |'''<div style="text-align: center;">Growth stages</div>'''
|-
|How many main stages of growth is the company expected to go through?
|4 stages
|4 stages
|Research suggests that a company typically goes through four distinct stages of cash flow growth.<ref>Levie J, Lichtenstein BB (2010) A terminal assessment of stages theory: Introducing a dynamic approach to entrepreneurship. Entrepreneurship: Theory & Practice 34(2): 317–350. <nowiki>https://doi.org/10.1111/j.1540-6520.2010.00377.x</nowiki></ref> Research also shows that incorporating those stages into the discounted cash flow model improves the quality of the model and, ultimately, the quality of the value estimation.<ref>Stef Hinfelaar et al.:, 2019.</ref>
In addition, research shows that a key way to determine the stage which a company is in is by examining the cash flow patterns of the company.<ref>Dickinson, 2010.</ref> A summary of the economic links to cash flow patterns can be found in the appendix of this report. The Stockhub users estimate that with Tesla's operating cash flows positive (+), investing cash flows negative (-) and its financing cash flows positive (+), the company is in the second stage of growth (i.e. the 'growth' stage), and, therefore, it has a total of three main stages of growth. Note, to account for one-off events, the three-year average (median) amount was used to calculate the cash flows.

On 7th February 2022, Tesla said it currently expects: to continue to generate net positive operating cash flow as it has done in the last four fiscal years; its capital expenditures to be between $5.00 to $7.00 billion in 2022 and each of the next two fiscal years; and its ability to be self-funding to continue as long as macroeconomic factors support current trends in its sales. Accordingly, based on forward looking statements, it appears that the company is in stage two of the business lifecycle  (i.e. the 'growth' stage), and, therefore, it has a total of three main stages of growth remaining.
|Zero
|Zero
|Zero
|Zero
|-
|What proportion of the company lifecycle is represented by growth stage 1?
|30%
|30%
|Research suggests 30%.<ref name=":6">http://escml.umd.edu/Papers/ObsCPMT.pdf</ref>
|Zero
|Zero
|Zero
|Zero
|-
|What proportion of the company lifecycle is represented by growth stage 2?
|10%
|10%
|Research suggests 10%.<ref name=":6" />
|Zero
|Zero
|Zero
|Zero
|-
|What proportion of the company lifecycle is represented by growth stage 3?
|20%
|20%
|Research suggests 20%.<ref name=":6" />
|Zero
|Zero
|Zero
|Zero
|-
|What proportion of the company lifecycle is represented by growth stage 4?
|40%
|40%
|Research suggests 40%.<ref name=":6" />
|Zero
|Zero
|Zero
|Zero
|-
| colspan="8" |'''<div style="text-align: center;">Growth stage 2</div>'''
|-
|Cost of goods sold as a proportion of revenue (%)
|79%
|79%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7">http://people.stern.nyu.edu/adamodar/pdfiles/papers/younggrowth.pdf</ref>, and the margin for its peers is 79%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Operating expenses as a proportion of revenue (%)
|15%
|15%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the margin for its peers is 15%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Tax rate (%)
|11%
|11%
|Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the rate for its peers is 11%.
|Zero
|Zero
|Zero
|Zero
|-
|Depreciation and amortisation as a proportion of revenue (%)
|7%
|7%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the margin for its peers is 7%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Fixed capital as a proportion of revenue (%)
|10%
|10%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Working capital as a proportion of revenue (%)
|15%
|15%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the amount for its peers is 15%.
|Zero
|Zero
|Zero
|Zero
|-
|Net borrowing ($000)
|Zero
|Zero
|Stockhub suggests that for simplicity, the net borrowing figure is zero.
|Zero
|Zero
|Zero
|Zero
|-
|Interest amount ($000)
|Zero
|Zero
|Stockhub suggests that for simplicity, the interest amount figure is zero.
|Zero
|Zero
|Zero
|Zero
|-
| colspan="8" |'''<div style="text-align: center;">Growth stage 3</div>'''
|-
|Cost of goods sold as a proportion of revenue (%)
|62%
|62%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the margin for its peers is 62%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Operating expenses as a proportion of revenue (%)
|13%
|13%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the margin for its peers is 13%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Tax rate (%)
|14%
|14%
|Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the rate for its peers is 14%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Depreciation and amortisation as a proportion of revenue (%)
|4%
|4%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the amount for its peers is 4%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Fixed capital as a proportion of revenue (%)
|3%
|3%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the amount for its peers is 3%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Working capital as a proportion of revenue (%)
|10%
|10%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Net borrowing ($000)
|Zero
|Zero
|The Stockhub users suggest that for simplicity, the net borrowing figure is zero.
|Zero
|Zero
|Zero
|Zero
|-
|Interest amount ($000)
|Zero
|Zero
|The Stockhub users suggest that for simplicity, the interest amount figure is zero.
|Zero
|Zero
|Zero
|Zero
|-
| colspan="8" |'''<div style="text-align: center;">Growth stage 4</div>'''
|-
|Cost of goods sold as a proportion of revenue (%)
|99%
|99%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the margin for its peers is 99%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Operating expenses as a proportion of revenue (%)
|15%
|15%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the margin for its peers is 15%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Tax rate (%)
|0%
|0%
|Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the rate for its peers is 0%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Depreciation and amortisation as a proportion of revenue (%)
|37%
|37%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 37%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Fixed capital as a proportion of revenue (%)
|1%
|1%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 1%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Working capital as a proportion of revenue (%)
|10%
|10%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|Zero
|Zero
|Zero
|Zero
|-
|Net borrowing ($000)
|Zero
|Zero
|The Stockhub users suggest that for simplicity, the net borrowing figure is zero.
|Zero
|Zero
|Zero
|Zero
|-
|Interest amount ($000)
|Zero
|Zero
|The Stockhub users suggest that for simplicity, the interest amount figure is zero.
|Zero
|Zero
|Zero
|Zero
|}

=== Forecasts ===
{| class="wikitable"
|+Financials<ref>Source: Stockhub Limited</ref><ref group="Note" name="Note04" /><ref>Source: Stockhub Limited</ref><ref name="Note04" group="Note" />
|-
!Year 
!'''1''' !!'''2'''!!'''3'''!!'''4'''!!'''5'''
!'''6'''
!'''7'''
!'''8'''
!'''9'''
!'''10'''
!'''11'''
!'''12'''
!'''13'''
!'''14'''
!'''15'''
!'''16'''
!'''17'''
!18
!18
!19
!20
!21
!22
!23
!24
!25
!26
!27
!28
!29
!30
!31
!32
!33
!34
!35
!36
!37
!38
!39
!40
!41
!42
!43
!44
!45
!46
!47
!48
!49
!50
!51
!52
!53
!54
!55
!56
!57
!58
!59
|-
|'''Year end date'''||'''31/12/2005'''||'''31/12/2006<ref name=":12">{{cite web|url=https://www.mercurynews.com/2014/07/14/2006-san-carlos-start-up-tesla-seeks-sexier-electric-car/|title=2006: San Carlos start-up Tesla seeks sexier electric car|date=July 14, 2014}}</ref><ref name="SEC">{{cite web | url=https://www.sec.gov/edgar/browse/?CIK=1318605 | title=Tesla, Inc. TSLA on Nasdaq | publisher=[[U.S. Securities and Exchange Commission]]}}</ref>'''||'''31/12/2007'''||'''31/12/2008'''||'''31/12/2009'''
|'''31/12/2010<ref name="SEC" />'''
|'''31/12/2011<ref name="SEC" />'''
|'''31/12/2012<ref name="SEC" />'''
|'''31/12/2013<ref name="SEC" />'''
|'''31/12/2014<ref name="SEC" />'''
|'''31/12/2015<ref name="SEC" />'''
|'''31/12/2016<ref name="SEC" />'''
|'''31/12/2017<ref name="SEC" />'''
|'''31/12/2018<ref name="SEC" />'''
|'''31/12/2019<ref name="SEC" />'''
|'''31/12/2020<ref name="SEC" />'''
|'''31/12/2021<ref name="SEC" />'''
|'''31/12/2022'''
|'''31/12/2022'''
|'''31/12/2023'''
|'''31/12/2024'''
|'''31/12/2025'''
|'''31/12/2026'''
|'''31/12/2027'''
|'''31/12/2028'''
|'''31/12/2029'''
|'''31/12/2030'''
|'''31/12/2031'''
|'''31/12/2032'''
|'''31/12/2033'''
|'''31/12/2034'''
|'''31/12/2035'''
|'''31/12/2036'''
|'''31/12/2037'''
|'''31/12/2038'''
|'''31/12/2039'''
|'''31/12/2040'''
|'''31/12/2041'''
|'''31/12/2042'''
|'''31/12/2043'''
|'''31/12/2044'''
|'''31/12/2045'''
|'''31/12/2046'''
|'''31/12/2047'''
|'''31/12/2048'''
|'''31/12/2049'''
|'''31/12/2050'''
|'''31/12/2051'''
|'''31/12/2052'''
|'''31/12/2053'''
|'''31/12/2054'''
|'''31/12/2055'''
|'''31/12/2056'''
|'''31/12/2057'''
|'''31/12/2058'''
|'''31/12/2059'''
|'''31/12/2060'''
|'''31/12/2061'''
|'''31/12/2062'''
|'''31/12/2063'''
|-
|
|'''Historic'''
|'''Historic'''
|'''Historic'''
|'''Historic'''
|'''Historic'''
|'''Historic'''
|'''Historic'''
|'''Historic'''
|'''Historic'''
|'''Historic'''
|'''Historic'''
|'''Historic'''
|'''Historic'''
|'''Historic'''
|'''Historic'''
|'''Historic'''
|'''Historic'''
|'''Historic'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|'''Forecast'''
|
|-
| colspan="61" |<div style="text-align: center;">'''Income statement'''</div>
|-
|Revenues ($'million)|| 0||0||0.073||15||112
|117
|204
|413
|2,013
|3,198
|4,046
|7,000
|11,759
|21,461
|24,578
|31,536
|53,823
|81,462
|$78,935
|$112,257
|$154,816
|$207,049
|$268,527
|$337,721
|$411,894
|$487,157
|$558,739
|$621,448
|$670,282
|$701,078
|$711,102
|$699,445
|$667,163
|$617,116
|$553,551
|$481,510
|$406,171
|$332,253
|$263,564
|$202,749
|$151,247
|$109,414
|$76,757
|$52,217
|$34,448
|$22,038
|$13,673
|$8,226
|$4,799
|$2,715
|$1,490
|$793
|$409
|$205
|$99
|$47
|$21
|$9
|$4
|$2
|-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|$23,680
|$33,677
|$46,445
|$62,115
|$80,558
|$101,316
|$185,352
|$219,221
|$251,432
|$279,652
|$301,627
|$315,485
|$319,996
|$314,750
|$300,223
|$277,702
|$249,098
|$216,679
|$182,777
|$149,514
|$118,604
|$91,237
|$68,061
|$49,236
|$34,541
|$23,498
|$15,502
|$9,917
|$6,153
|$3,702
|$2,160
|$1,222
|$670
|$357
|$184
|$92
|$45
|$21
|$10
|$4
|$2
|$1
|-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|$11,840
|$16,839
|$23,222
|$31,057
|$40,279
|$50,658
|$123,568
|$146,147
|$167,622
|$186,434
|$201,085
|$210,323
|$213,331
|$209,834
|$200,149
|$185,135
|$166,065
|$144,453
|$121,851
|$99,676
|$79,069
|$60,825
|$45,374
|$32,824
|$23,027
|$15,665
|$10,335
|$6,612
|$4,102
|$2,468
|$1,440
|$815
|$447
|$238
|$123
|$61
|$30
|$14
|$6
|$3
|$1
|$1
|-
|Net profits ($'million)|| style="color: red;" |-12|| style="color: red;" |-30|| style="color: red;" |-78|| style="color: red;" |-83|| style="color: red;" |−56
| style="color: red;" |−154
| style="color: red;" |−254
| style="color: red;" |−396
| style="color: red;" |−74
| style="color: red;" |−294
| style="color: red;" |−889
| style="color: red;" |−675
| style="color: red;" |−1,962
| style="color: red;" |−976
| style="color: red;" |−862
|721
|5,519
|12,556
|$9,354
|$13,302
|$18,346
|$24,535
|$31,820
|$40,020
|$97,619
|$115,456
|$132,421
|$147,283
|$158,857
|$166,156
|$168,531
|$165,769
|$158,118
|$146,256
|$131,192
|$114,118
|$96,263
|$78,744
|$62,465
|$48,052
|$35,846
|$25,931
|$18,191
|$12,376
|$8,164
|$5,223
|$3,240
|$1,949
|$1,137
|$643
|$353
|$188
|$97
|$48
|$24
|$11
|$5
|$2
|$1
|$0
|-
| colspan="61" |<div style="text-align: center;">'''Balance sheet'''</div>
|-
|Total assets<br />($'million)
|8
|44
|34
|52
|130
|386
|713
|1,114
|2,417
|5,831
|8,068
|22,664
|28,655
|29,740
|34,309
|52,148
|62,131
|82,338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|-
| colspan="61" |<div style="text-align: center;">'''Other'''</div>
|-
|Employees
|NA
|70
|268
|252
|514
|899
|1,417
|2,914
|5,859
|10,161
|13,058
|17,782
|37,543
|48,817
|48,016
|70,757
|99,290
|127,855
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|}

=== Risks ===
ccc

{| class="wikitable"
|+Risk change(s)
|-
!
! colspan="2" |Risk
! colspan="2" |Risk change
|-
!
!New 
!Old 
!Absolute
!Relative 
|-
|Beta
|2.12
|2.12
|Zero
|Zero
|-
|Adjusted beta
|2.12
|2.12
|Zero
|Zero
|-
|Recommendation
|Suitable
|Suitable
|Suitable
|Suitable
|}

=== Valuation ===
ccc

{| class="wikitable"
|+Valuation change(s)
|-
!
! colspan="2" |Valuation
! colspan="2" |Valuation change
|-
!
!New 
!Old 
!Absolute
!Relative 
|-
|Five-year expected return
|(24)%
|(24)%
|Zero
|Zero
|-
|Annualised expected return
|(4)%
|(4)%
|Zero
|Zero
|-
|Recommendation
|Unsuitable
|Unsuitable
|No change
|No change
|}


{| class="wikitable"
|+ Assumption change(s)
!Description 
!New assumption
!Old assumption
!Commentary
!Resulting target price absolute change
!Resulting target price relative change (%)
!Assumption absolute change
!Assumption relative change (%)
|-
| Which valuation model do you want to use?
|Discounted cash flow 
|Discounted cash flow
| There are two main approaches to estimate the value of an investment: 
# By calculating the present value of the investment's expected future cash flows (i.e. discounted cash flow valuation); and
#By comparing the investment to other similar investments (i.e. relative valuation).

Research suggests that in terms of estimating the expected return of an investment over a period of 12-months or more, the approach that is more accurate is the discounted cash flow approach<ref name=":5">Demirakos et al., 2010; Gleason et al., 2013</ref>, so that's the approach that he Stockhub users suggest to use here; nevertheless, for completeness purposes, separately, the valuation of the company is also estimated using the using the relative valuation approach (the valuation based on the relative approach can be found in the appendix of this report).  

Tesla has never paid cash dividends, and on 7th February 2022, it said that it currently does not anticipate paying any cash dividends in the foreseeable future. Accordingly, the Stockhub users suggest using the free cash flow valuation method (rather than the dividend discount model). 
|
|
|
|
|-
|Which financial forecasts to use?
| Stockhub
|Stockhub
|The only available long-term forecasts (i.e. >15 years) are the ones that are supplied by the Stockhub users (the forecasts can be found in the financials section of this report), so the Stockhub users suggest using those.
|
|
|
|
|-
| colspan="4" |'''<div style="text-align: center;">Growth stage 2</div>''' 
|
|
|
|
|-
|Discount rate (%)
| 15%
|15%
|There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity is by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital.
|
|
|
|
|-
|Probability of success (%)
| 90%
|90%
| Research suggests that a suitable rate for a company in this growth stage (i.e. stage 2) is 90%.
|
|
|
|
|-
| colspan="4" |'''<div style="text-align: center;">Growth stage 3</div>''' 
|
|
|
|
|-
|Discount rate (%)
| 10%
|10%
|There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity is by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital.
|
|
|
|
|-
|Probability of success (%)
|100%
|100%
|Research suggests that a suitable rate for a company in this growth stage (i.e. stage 3) is 100%.
|
|
|
|
|-
| colspan="4" |'''<div style="text-align: center;">Growth stage 4</div>''' 
|
|
|
|
|-
|Discount rate (%)
| 10%
|10%
|There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity is by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital.
|
|
|
|
|-
|Probability of success (%)
| 100%
|100%
|Research suggests that a suitable rate for a company in this growth stage (i.e. stage 4) is 100%.
|
|
|
|
|-
| colspan="4" |'''<div style="text-align: center;">Other key inputs</div>'''
|
|
|
|
|-
|What's the current value of the company?
|$950.54 billion
|$950.54 billion
|As at 5th June 2022, the current value of the Tesla company is $950.54 billion.
|
|
|
|
|-
|Which time period do you want to use to estimate the expected return?
| Between now and five years time
|Between now and five years time
|Research suggests that following a market crash, the average amount of time it takes for the price of a stock market to return to its pre-crash level (i.e. the recovery period) is at least three years.<ref>https://www.newyorkfed.org/mediabrary/media/medialibrary/media/research/staff_reports/research_papers/9809.pdf</ref> Accordingly, Stockhub suggests that to account for general market cyclicity, it's best to estimate the expected return of the company between now and five years time.
|
|
|
|
|}



== References and notes ==
<references />
@@ Line 1: / Line 1: @@
-On 24th January 2024, Tesla announced its fourth quarter results, covering the period ended 31st December 2023. The key highlight of the results is that the total number of vehicles delivered in the year increased by 38% to 1,808,581 (from $ccc). No information on the average selling price of the vehicles has been provided in the announcement.
+On 24th January 2024, Tesla announced its fourth quarter results, covering the period ended 31st December 2023.
-Assuming that the average selling price of the vehicles is unchanged from the last reported price ($ccc on ccc), then the estimated revenue generated in the year is $ccc. The figure compares to the Stockhub consensus forecast of $ccc, a difference of $ccc in absolute terms and ccc% in relative terms. To reflect the difference, we adjust our company revenue standard deviation assumption by ccc years to ccc years (from ccc years). All other assumptions are unchanged. The adjustment results in a ccc% change to the target price, increasing the price to $ccc (from $ccc).
+The key highlight of the results is that the total number of vehicles delivered in the year increased by 38% to 1,808,581.
-Accordingly, based on the assumptions provided on the Stockhub platform, the investment remains a 'suitable' one for you if, among other criteria, your required:
+Assuming that the average selling price of the vehicles is unchanged from the last reported price ($ccc on ccc), then the estimated revenue generated in the year is $ccc. The figure compares to the Stockhub consensus forecast of $ccc, a difference of $ccc in absolute terms and ccc% in relative terms. To reflect the difference, we adjust our standard deviation assumption by ccc. All other assumptions are unchanged.
-* Return level is 39% per year or less in absolute terms;
+The adjustment results in a ccc% change to the target price, increasing the price to $ccc (from $ccc). Accordingly, ultimately, the investment remains a 'suitable' one.
-* Risk level is 42% or more above the market risk level;
-* Time horizon is five years or longer; and/or
-* Objective is to help accelerate the world's transition to sustainable energy.
 == What's the news? ==
 On 24th January 2024, Tesla announced its fourth quarter results, covering the period ended 31st December 2023.
-The key highlight of the results is that the total number of vehicles delivered in the year increased by 38% to 1,808,581 (from $ccc). Other key highlights can be found in the table below.
+The key highlight of the results is that the total number of vehicles delivered in the year increased by 38% to 1,808,581. Other key highlights can be found in the table below.
 No details about the sales price is provided in the announcement.
@@ Line 91: / Line 88: @@
 Assuming that the average selling price of the vehicles is unchanged from the last reported price ($ccc on ccc), then the estimated revenue generated in the quarter is $ccc and in the year is $ccc.
-The annual figure compares to the Stockhub consensus forecast of $ccc, a difference of $ccc in absolute terms and ccc% in relative terms. The figure also compares to the company's revenue amount in the previous year of $ccc, a difference of $ccc in absolute terms and ccc% in relative terms. To reflect the difference, we adjust our company revenue standard deviation assumption by ccc years to ccc years (from ccc years). All other assumptions are unchanged.
+The annual figure compares to the Stockhub consensus forecast of $ccc, a difference of $ccc in absolute terms and cccc% in relative terms. To reflect the difference, we adjust our standard deviation assumption by ccc. All other assumptions are unchanged.
-The adjustment results in a ccc% change to the target price, increasing the price to $ccc (from $ccc).
+The adjustment results in a ccc% change to the target price, increasing the price to $ccc (from $ccc). Accordingly, ultimately, the investment remains a 'suitable' one.
-Accordingly, based on the assumptions provided on the Stockkhub platform, the investment remains a 'suitable' one for you if, among other criteria, your required:
-* Return level is 39% per year or less in absolute terms;
-* Risk level is 42% or more above the market risk level;
-* Time horizon is five years or longer; and/or
-* Objective is to help accelerate the world's transition to sustainable energy.
 {| class="wikitable"
 |+Forecast change(s)
-!Year since company inception
+!Year
-! colspan="4" |19
+! colspan="4" |1
-! colspan="4" |20
+! colspan="4" |2
-! colspan="4" |21
+! colspan="4" |3
-! colspan="4" |22
+! colspan="4" |4
-|-
-!Year end date
-! colspan="4" |'''31/12/2023'''
-! colspan="4" |'''31/12/2024'''
-! colspan="4" |'''31/12/2025'''
-! colspan="4" |'''31/12/2026'''
 |-
 !
@@ Line 178: / Line 163: @@
 |
 |-
-|Gross profit
+|
 |
 |
@@ Line 196: / Line 181: @@
 |
 |-
-|Operating profit
+|
 |
 |
@@ Line 214: / Line 199: @@
 |
 |-
-|Net profit
+|
 |
 |
@@ Line 239: / Line 224: @@
 !Old assumption
 !Commentary
+!Resulting target price absolute change
+!Resulting target price relative change (%)
 !Assumption absolute change
 !Assumption relative change (%)
-!Resulting target price absolute change
-!Resulting target price relative change (%)
 |-
 | colspan="8" |<div style="text-align: center;">'''Revenue'''</div>
+|-
+|What's the estimated current size of the total addressable market?
+|$2,975,000,000
+|$2,975,000,000
+|Here, the total addressable market (TAM) is defined as the global automotive market, and based on a number of assumptions, it is estimated that the size of the market as of today (30th May 2022), in terms of revenue, is $2.975 trillion.
+If the TAM is defined as the global energy market, then research suggests that the estimated size of the market is $6.777 trillion.<ref name=":16">https://www.ucl.ac.uk/bartlett/sustainable/sites/bartlett/files/an_exploration_of_energy_cost_ranges_limits_and_adjustment_process.pdf</ref>
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|What is the estimated company lifespan?
+|60 years
+|60 years
+|Tesla employs around 110,000, making the company a large organisation (more than 10,000 employees), and research shows that the average lifespan of a large corporation is around 50 years.<ref>Stadler, Enduring Success, 3–5.</ref>
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|What's the estimated annual growth rate of the total addressable market over the lifecycle of the company?
+|3%
+|3%
+|Research shows that the growth rate of the global automotive market (i.e. the total addressable market) is similar to the growth rate of global gross domestic product<ref>http://www.robertpicard.net/files/econgrowthandadvertising.pdf</ref>, which has averaged (medium) around 3% per year in the last 20 years (2001 to 2022)<ref>https://www.macrotrends.net/countries/WLD/world/gdp-growth-rate</ref>.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|What's the estimated company peak market share?
+|10%
+|10%
+|The Stockhub users estimate that especially given the leadership of the company, the peak market share of Tesla is around 10%, and, therefore, suggests using the share amount here. As of 31st December 2021, Tesla's current share of the market is estimated at around 1.8%.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Which distribution function do you want to use to estimate company revenue?
+|Gaussian
+|Gaussian
+|Research suggests that the revenue pattern of companies is similar to the pattern produced by the Gaussian distribution function  (i.e. the revenue distribution is bell shaped)<ref>http://escml.umd.edu/Papers/ObsCPMT.pdf</ref>, so the Stockhub users suggest using that function here.
+|Zero
+|Zero
+|Zero
+|Zero
 |-
 |What's the estimated standard deviation of company revenue?
@@ Line 250: / Line 283: @@
 |6 years
 |Another way of asking this question is this way: within how many years either side of the mean does 68% of revenue occur? Based on Tesla's current revenue amount (i.e. $54 billion) and Tesla's estimated lifespan (i.e. 60 years) and Tesla's estimated current stage of its lifecycle (i.e. growth stage), the Stockhub users suggest using 6 years (i.e. 68% of all sales happen within 6 years either side of the mean year), so that's what's used here.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+| colspan="8" |'''<div style="text-align: center;">Growth stages</div>'''
+|-
+|How many main stages of growth is the company expected to go through?
+|4 stages
+|4 stages
+|Research suggests that a company typically goes through four distinct stages of cash flow growth.<ref>Levie J, Lichtenstein BB (2010) A terminal assessment of stages theory: Introducing a dynamic approach to entrepreneurship. Entrepreneurship: Theory & Practice 34(2): 317–350. <nowiki>https://doi.org/10.1111/j.1540-6520.2010.00377.x</nowiki></ref> Research also shows that incorporating those stages into the discounted cash flow model improves the quality of the model and, ultimately, the quality of the value estimation.<ref>Stef Hinfelaar et al.:, 2019.</ref>
+In addition, research shows that a key way to determine the stage which a company is in is by examining the cash flow patterns of the company.<ref>Dickinson, 2010.</ref> A summary of the economic links to cash flow patterns can be found in the appendix of this report. The Stockhub users estimate that with Tesla's operating cash flows positive (+), investing cash flows negative (-) and its financing cash flows positive (+), the company is in the second stage of growth (i.e. the 'growth' stage), and, therefore, it has a total of three main stages of growth. Note, to account for one-off events, the three-year average (median) amount was used to calculate the cash flows.
+On 7th February 2022, Tesla said it currently expects: to continue to generate net positive operating cash flow as it has done in the last four fiscal years; its capital expenditures to be between $5.00 to $7.00 billion in 2022 and each of the next two fiscal years; and its ability to be self-funding to continue as long as macroeconomic factors support current trends in its sales. Accordingly, based on forward looking statements, it appears that the company is in stage two of the business lifecycle  (i.e. the 'growth' stage), and, therefore, it has a total of three main stages of growth remaining.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|What proportion of the company lifecycle is represented by growth stage 1?
+|30%
+|30%
+|Research suggests 30%.<ref name=":6">http://escml.umd.edu/Papers/ObsCPMT.pdf</ref>
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|What proportion of the company lifecycle is represented by growth stage 2?
+|10%
+|10%
+|Research suggests 10%.<ref name=":6" />
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|What proportion of the company lifecycle is represented by growth stage 3?
+|20%
+|20%
+|Research suggests 20%.<ref name=":6" />
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|What proportion of the company lifecycle is represented by growth stage 4?
+|40%
+|40%
+|Research suggests 40%.<ref name=":6" />
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+| colspan="8" |'''<div style="text-align: center;">Growth stage 2</div>'''
+|-
+|Cost of goods sold as a proportion of revenue (%)
+|79%
+|79%
+|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7">http://people.stern.nyu.edu/adamodar/pdfiles/papers/younggrowth.pdf</ref>, and the margin for its peers is 79%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Operating expenses as a proportion of revenue (%)
+|15%
+|15%
+|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the margin for its peers is 15%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Tax rate (%)
+|11%
+|11%
+|Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the rate for its peers is 11%.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Depreciation and amortisation as a proportion of revenue (%)
+|7%
+|7%
+|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the margin for its peers is 7%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Fixed capital as a proportion of revenue (%)
+|10%
+|10%
+|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Working capital as a proportion of revenue (%)
+|15%
+|15%
+|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the amount for its peers is 15%.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Net borrowing ($000)
+|Zero
+|Zero
+|Stockhub suggests that for simplicity, the net borrowing figure is zero.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Interest amount ($000)
+|Zero
+|Zero
+|Stockhub suggests that for simplicity, the interest amount figure is zero.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+| colspan="8" |'''<div style="text-align: center;">Growth stage 3</div>'''
+|-
+|Cost of goods sold as a proportion of revenue (%)
+|62%
+|62%
+|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the margin for its peers is 62%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Operating expenses as a proportion of revenue (%)
+|13%
+|13%
+|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the margin for its peers is 13%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Tax rate (%)
+|14%
+|14%
+|Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the rate for its peers is 14%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Depreciation and amortisation as a proportion of revenue (%)
+|4%
+|4%
+|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the amount for its peers is 4%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Fixed capital as a proportion of revenue (%)
+|3%
+|3%
+|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the amount for its peers is 3%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Working capital as a proportion of revenue (%)
+|10%
+|10%
+|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Net borrowing ($000)
+|Zero
+|Zero
+|The Stockhub users suggest that for simplicity, the net borrowing figure is zero.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Interest amount ($000)
+|Zero
+|Zero
+|The Stockhub users suggest that for simplicity, the interest amount figure is zero.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+| colspan="8" |'''<div style="text-align: center;">Growth stage 4</div>'''
+|-
+|Cost of goods sold as a proportion of revenue (%)
+|99%
+|99%
+|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the margin for its peers is 99%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Operating expenses as a proportion of revenue (%)
+|15%
+|15%
+|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the margin for its peers is 15%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Tax rate (%)
+|0%
+|0%
+|Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the rate for its peers is 0%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Depreciation and amortisation as a proportion of revenue (%)
+|37%
+|37%
+|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 37%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Fixed capital as a proportion of revenue (%)
+|1%
+|1%
+|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 1%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Working capital as a proportion of revenue (%)
+|10%
+|10%
+|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Net borrowing ($000)
+|Zero
+|Zero
+|The Stockhub users suggest that for simplicity, the net borrowing figure is zero.
+|Zero
+|Zero
+|Zero
+|Zero
+|-
+|Interest amount ($000)
+|Zero
+|Zero
+|The Stockhub users suggest that for simplicity, the interest amount figure is zero.
 |Zero
 |Zero
@@ Line 274: / Line 579: @@
 !'''16'''
 !'''17'''
+!18
 !18
 !19
@@ Line 330: / Line 636: @@
 |'''31/12/2020<ref name="SEC" />'''
 |'''31/12/2021<ref name="SEC" />'''
+|'''31/12/2022'''
 |'''31/12/2022'''
 |'''31/12/2023'''
@@ Line 392: / Line 699: @@
 |'''Historic'''
 |'''Historic'''
+|'''Forecast'''
 |'''Forecast'''
 |'''Forecast'''
@@ Line 434: / Line 742: @@
 |
 |-
-| colspan="60" |<div style="text-align: center;">'''Income statement'''</div>
+| colspan="61" |<div style="text-align: center;">'''Income statement'''</div>
 |-
 |Revenues ($'million)|| 0||0||0.073||15||112
@@ Line 450: / Line 758: @@
 |53,823
 |81,462
+|$78,935
 |$112,257
 |$154,816
@@ Line 492: / Line 801: @@
 |$2
 |-
-|Gross profit ($'million)
 |
 |
@@ Line 511: / Line 819: @@
 |
 |
+|
+|$23,680
 |$33,677
 |$46,445
@@ Line 553: / Line 863: @@
 |$1
 |-
-|Operating profit ($'million)
 |
 |
@@ Line 572: / Line 881: @@
 |
 |
+|
+|$11,840
 |$16,839
 |$23,222
@@ Line 628: / Line 939: @@
 |5,519
 |12,556
+|$9,354
 |$13,302
 |$18,346
@@ Line 670: / Line 982: @@
 |$0
 |-
-| colspan="60" |<div style="text-align: center;">'''Balance sheet'''</div>
+| colspan="61" |<div style="text-align: center;">'''Balance sheet'''</div>
 |-
 |Total assets<br />($'million)
@@ Line 691: / Line 1,003: @@
 |62,131
 |82,338
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|
+|-
+| colspan="61" |<div style="text-align: center;">'''Other'''</div>
+|-
+|Employees
+|NA
+|70
+|268
+|252
+|514
+|899
+|1,417
+|2,914
+|5,859
+|10,161
+|13,058
+|17,782
+|37,543
+|48,817
+|48,016
+|70,757
+|99,290
+|127,855
+|
 |
 |
@@ Line 811: / Line 1,188: @@
 !Old assumption
 !Commentary
+!Resulting target price absolute change
+!Resulting target price relative change (%)
 !Assumption absolute change
 !Assumption relative change (%)
-!Resulting target price absolute change
-!Resulting target price relative change (%)
 |-
-| colspan="8" |'''<div style="text-align: center;">Growth stage 2</div>'''
+| Which valuation model do you want to use?
+|Discounted cash flow
+|Discounted cash flow
+| There are two main approaches to estimate the value of an investment:
+# By calculating the present value of the investment's expected future cash flows (i.e. discounted cash flow valuation); and
+#By comparing the investment to other similar investments (i.e. relative valuation).
+Research suggests that in terms of estimating the expected return of an investment over a period of 12-months or more, the approach that is more accurate is the discounted cash flow approach<ref name=":5">Demirakos et al., 2010; Gleason et al., 2013</ref>, so that's the approach that he Stockhub users suggest to use here; nevertheless, for completeness purposes, separately, the valuation of the company is also estimated using the using the relative valuation approach (the valuation based on the relative approach can be found in the appendix of this report).
+Tesla has never paid cash dividends, and on 7th February 2022, it said that it currently does not anticipate paying any cash dividends in the foreseeable future. Accordingly, the Stockhub users suggest using the free cash flow valuation method (rather than the dividend discount model).
+|
+|
+|
+|
+|-
+|Which financial forecasts to use?
+| Stockhub
+|Stockhub
+|The only available long-term forecasts (i.e. >15 years) are the ones that are supplied by the Stockhub users (the forecasts can be found in the financials section of this report), so the Stockhub users suggest using those.
+|
+|
+|
+|
+|-
+| colspan="4" |'''<div style="text-align: center;">Growth stage 2</div>'''
+|
+|
+|
+|
 |-
 |Discount rate (%)
@@ Line 836: / Line 1,241: @@
 |
 |-
-| colspan="8" |'''<div style="text-align: center;">Other key inputs</div>'''
+| colspan="4" |'''<div style="text-align: center;">Growth stage 3</div>'''
+|
+|
+|
+|
+|-
+|Discount rate (%)
+| 10%
+|10%
+|There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity is by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital.
+|
+|
+|
+|
+|-
+|Probability of success (%)
+|100%
+|100%
+|Research suggests that a suitable rate for a company in this growth stage (i.e. stage 3) is 100%.
+|
+|
+|
+|
+|-
+| colspan="4" |'''<div style="text-align: center;">Growth stage 4</div>'''
+|
+|
+|
+|
+|-
+|Discount rate (%)
+| 10%
+|10%
+|There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity is by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital.
+|
+|
+|
+|
+|-
+|Probability of success (%)
+| 100%
+|100%
+|Research suggests that a suitable rate for a company in this growth stage (i.e. stage 4) is 100%.
+|
+|
+|
+|
+|-
+| colspan="4" |'''<div style="text-align: center;">Other key inputs</div>'''
+|
+|
+|
+|
 |-
 |What's the current value of the company?
@@ Line 842: / Line 1,299: @@
 |$950.54 billion
 |As at 5th June 2022, the current value of the Tesla company is $950.54 billion.
+|
+|
+|
+|
+|-
+|Which time period do you want to use to estimate the expected return?
+| Between now and five years time
+|Between now and five years time
+|Research suggests that following a market crash, the average amount of time it takes for the price of a stock market to return to its pre-crash level (i.e. the recovery period) is at least three years.<ref>https://www.newyorkfed.org/mediabrary/media/medialibrary/media/research/staff_reports/research_papers/9809.pdf</ref> Accordingly, Stockhub suggests that to account for general market cyclicity, it's best to estimate the expected return of the company between now and five years time.
 |
 |