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 (from $ccc). No information on the average selling price of the vehicles has been provided in the announcement.

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).

Accordingly, based on the assumptions provided on the Stockhub 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.

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.

No details about the sales price is provided in the announcement.

Summary

		Q4 2023		FY2023
		Actual	Change (%)	Actual	Change (%)
Model 3/Y	Production	476,777		1,775,159
	Deliveries	461,538		1,739,707
	Subject to operating lease accounting	2%
Other models	Production	18,212		70,826
	Deliveries	22,969		68,874
	Subject to operating lease accounting	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 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 adjustment results in a ccc% change to the target price, increasing the price to $ccc (from $ccc).

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.

Forecast change(s)

Year since company inception	19				20				21				22
Year end date	31/12/2023				31/12/2024				31/12/2025				31/12/2026
	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
Gross profit
Operating profit
Net profit

Assumption change(s)

	New assumption	Old assumption	Commentary	Assumption absolute change	Assumption relative change (%)	Resulting target price absolute change	Resulting target price relative change (%)
Revenue
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

Forecasts

Financials

Year	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16	17	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	31/12/2007	31/12/2008	31/12/2009	31/12/2010	31/12/2011	31/12/2012	31/12/2013	31/12/2014	31/12/2015	31/12/2016	31/12/2017	31/12/2018	31/12/2019	31/12/2020	31/12/2021	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
Income statement
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	$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	$2
Gross profit ($'million)																			$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	$1
Operating profit ($'million)																			$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)	-12	-30	-78	-83	−56	−154	−254	−396	−74	−294	−889	−675	−1,962	−976	−862	721	5,519	12,556	$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	$0
Balance sheet
Total assets ($'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

Risks

ccc

Risk change(s)

	Risk		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

Valuation change(s)

	Valuation		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

Assumption change(s)

Description	New assumption	Old assumption	Commentary	Assumption absolute change	Assumption relative change (%)	Resulting target price absolute change	Resulting target price relative change (%)
Growth stage 2
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%.
Other key inputs
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.