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Latest revision as of 09:48, 24 March 2024

Tesla, Inc. is a company that's on a mission to accelerate the world's transition to sustainable energy.

The chief executive officer of Tesla, Inc. is Elon Musk.

The chief executive officer of Apple Inc. is Q265852.

The chief executive officer of Microsoft Corporation is Satya Nadella.

The chief executive officer of Meta Platforms, Inc. is Q36215.

The chief executive officer of 滙豐控股有限公司, HSBC Holdings plc, HSBC Holdings plc is Stuart Gulliver.

The chief executive officer of Shell plc is Q15650949.

The chief executive officer of Alphabet Inc. is Sundar Pichai.

Assumption change(s)
	New assumption	Old assumption	Commentary	Resulting target price absolute change	Resulting target price relative change (%)	Assumption absolute change	Assumption relative change (%)
Revenue
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.^[1]	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.^[2]	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^[3], which has averaged (medium) around 3% per year in the last 20 years (2001 to 2022)^[4].	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)^[5], 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
Growth stages
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.^[6] 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.^[7] 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.^[8] 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%.^[9]	Zero	Zero	Zero	Zero
What proportion of the company lifecycle is represented by growth stage 2?	10%	10%	Research suggests 10%.^[9]	Zero	Zero	Zero	Zero
What proportion of the company lifecycle is represented by growth stage 3?	20%	20%	Research suggests 20%.^[9]	Zero	Zero	Zero	Zero
What proportion of the company lifecycle is represented by growth stage 4?	40%	40%	Research suggests 40%.^[9]	Zero	Zero	Zero	Zero
Growth stage 2
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)^[10], 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)^[10], 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)^[10], 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)^[10], 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)^[10], 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)^[10], 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
Growth stage 3
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)^[10], 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)^[10], 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)^[10], 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)^[10], 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)^[10], 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)^[10], 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
Growth stage 4
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)^[10], 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)^[10], 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)^[10], 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)^[10], 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)^[10], 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)^[10], 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

Forecast change(s)
Year	1				2				3				4
	Forecast		Forecast change		Forecast		Forecast change		Forecast		Forecast change		Forecast		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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Douglas Noël Adams

53,823,000,000 United States dollar

↑ https://www.ucl.ac.uk/bartlett/sustainable/sites/bartlett/files/an_exploration_of_energy_cost_ranges_limits_and_adjustment_process.pdf
↑ Stadler, Enduring Success, 3–5.
↑ http://www.robertpicard.net/files/econgrowthandadvertising.pdf
↑ https://www.macrotrends.net/countries/WLD/world/gdp-growth-rate
↑ http://escml.umd.edu/Papers/ObsCPMT.pdf
↑ Levie J, Lichtenstein BB (2010) A terminal assessment of stages theory: Introducing a dynamic approach to entrepreneurship. Entrepreneurship: Theory & Practice 34(2): 317–350. https://doi.org/10.1111/j.1540-6520.2010.00377.x
↑ Stef Hinfelaar et al.:, 2019.
↑ Dickinson, 2010.
↑ ^9.0 ^9.1 ^9.2 ^9.3 http://escml.umd.edu/Papers/ObsCPMT.pdf
↑ ^10.00 ^10.01 ^10.02 ^10.03 ^10.04 ^10.05 ^10.06 ^10.07 ^10.08 ^10.09 ^10.10 ^10.11 ^10.12 ^10.13 ^10.14 ^10.15 ^10.16 ^10.17 http://people.stern.nyu.edu/adamodar/pdfiles/papers/younggrowth.pdf

[:16-1] ttps://www.ucl.ac.uk/bartlett/sustainable/sites/bartlett/files/an_exploration_of_energy_cost_ranges_limits_and_adjustment_process.pdf

[2] Stadler, Enduring Success, 3–5.

[3] ttp://www.robertpicard.net/files/econgrowthandadvertising.pdf

[4] ttps://www.macrotrends.net/countries/WLD/world/gdp-growth-rate

[5] ttp://escml.umd.edu/Papers/ObsCPMT.pdf

[6] Levie J, Lichtenstein BB (2010) A terminal assessment of stages theory: Introducing a dynamic approach to entrepreneurship. Entrepreneurship: Theory & Practice 34(2): 317–350. https://doi.org/10.1111/j.1540-6520.2010.00377.x

[7] Stef Hinfelaar et al.:, 2019.

[8] Dickinson, 2010.

[:6-9] 9.0 ^9.1 ^9.2 ^9.3 http://escml.umd.edu/Papers/ObsCPMT.pdf

[:7-10] 10.00 ^10.01 ^10.02 ^10.03 ^10.04 ^10.05 ^10.06 ^10.07 ^10.08 ^10.09 ^10.10 ^10.11 ^10.12 ^10.13 ^10.14 ^10.15 ^10.16 ^10.17 http://people.stern.nyu.edu/adamodar/pdfiles/papers/younggrowth.pdf

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	{{#statements:official name\|from=Q478214}} is a company that's on a mission {{#statements:mission\|from=Q478214}}.		{{#statements:official name\|from=Q478214}} is a company that's on a mission {{#statements:mission\|from=Q478214}}.