Crown

I haven’t looked at the Range Rover Sport but I will see if the other half is interested. I really like smaller cars hence the R8 and my winter drive my Macan S but my other half would like to have a bigger car than the Macan/GLC/Q5

AJ:

I haven’t looked at the Range Rover Sport but I will see if the other half is interested. I really like smaller cars hence the R8 and my winter drive my Macan S but my other half would like to have a bigger car than the Macan/GLC/Q5

 

The RR Sport is perfect for her. I've owned the Cayenne and driven the Macan. They can't hold a candle to the RRS unless you're interested in performance driving a SUV. Off road performance is about the same.

Stress is man made.

Boxster Coupe GTS:

If it turns out to be correct that Tesla growth is running out of steam ( e.g. Elon Musk has indicated that 2019 Q1 will be below 2018 Q4 and they will need some luck to make a "tiny" profit  ) then here is a "back-of-the-envelope" valuation based on FY2018 results applied to the valuation multiple of a benchmark growth company that has also been running out of steam...

• LTM EBITDA ~ $1.6bn
• EV / EBITDA multiple ~ 9.60x (based on prevailing AAPL multiple)
• Implied Enterprise Value ~ $15.36bn
• Existing Net Debt ~ $8.28bn
• Implied Equity Value ~ $7.08bn
• Outstanding Shares ~ 171,733,000
• Implied Share Price ~ $41.23 per share

...so a downside risk of 87% below the current $312 share price! 

Cleverly completely ignoring the Model Y and future roadmap for cars or solar. All of Tesla valuation is justified by the future expectations of EBITDA. Plus using the low multiple of a mature company vs the multiple of a growth stock (Amazon multiple is 70). What you posted is exactly what a biased short seller would post. And don’t get me wrong, Tesla stock is priced for perfection and I would not buy it at these levels, but what you just did is disingenuous.

Amazon is a internet company, Tesla is a CAR company.

Big difference.

Plus, Tesla's growth opportunity is limited, actually all priced in plus more already in the current stock price.

Tesla currently have a virtual monopoly of the EV market, but that does't last long. Major car manufacturers are coming I with their EV offering so Tesla only stands to lose market share, not gaining. They have a limited growth potential, especially when they decided to go into the lower profit mainstream car market instead of staying at the high margin niche market.

AJ:

I haven’t looked at the Range Rover Sport but I will see if the other half is interested. I really like smaller cars hence the R8 and my winter drive my Macan S but my other half would like to have a bigger car than the Macan/GLC/Q5

 

They have now some very nice lease offers for the RR Sport in Germany... 

RC (Germany) - Rennteam Editor Audi R8 V10 Plus (2016), Mercedes E63 S AMG Edition 1 (2018), Mercedes C63 S AMG Cab (2019), Range Rover Evoque Si4 Black Edition (2019)

SciFrog:

Boxster Coupe GTS:

If it turns out to be correct that Tesla growth is running out of steam ( e.g. Elon Musk has indicated that 2019 Q1 will be below 2018 Q4 and they will need some luck to make a "tiny" profit  ) then here is a "back-of-the-envelope" valuation based on FY2018 results applied to the valuation multiple of a benchmark growth company that has also been running out of steam...

• LTM EBITDA ~ $1.6bn
• EV / EBITDA multiple ~ 9.60x (based on prevailing AAPL multiple)
• Implied Enterprise Value ~ $15.36bn
• Existing Net Debt ~ $8.28bn
• Implied Equity Value ~ $7.08bn
• Outstanding Shares ~ 171,733,000
• Implied Share Price ~ $41.23 per share

...so a downside risk of 87% below the current $312 share price! 

Cleverly completely ignoring the Model Y and future roadmap for cars or solar. All of Tesla valuation is justified by the future expectations of EBITDA. Plus using the low multiple of a mature company vs the multiple of a growth stock (Amazon multiple is 70). What you posted is exactly what a biased short seller would post. And don’t get me wrong, Tesla stock is priced for perfection and I would not buy it at these levels, but what you just did is disingenuous.

Not sure where you are getting the 70x multiple for AMZN when it was never above 50x in the past fifteen years and currently trades for 29x.  As Nick posted above, TSLA is not a tech company, it merely is an automaker and the 9.6x multiple is roughly the average for that particular industry.  F, however, trades at 12x.  However, one would never try to stop anyone from acquiring TSLA since it is, according your statements, "priced to perfection."  Others doubt that and hence the reason why TSLA trades in a very liquid market.  

No one has mentioned it until now, but Volkswagen is planning on licensing its new MEB component set platform to other automakers, starting with Ford.  This represents an interesting opportunity for the smaller automakers to quickly move to an established, and less capital-intensive EV program, and allows for Volkswagen to quickly move down the learning curve to reduce that platform's costs.  Volkswagen has already demonstrated the flexibility of its platforms with the MQB and MLB sets.  

I am not a native English speaker but « priced for perfection » and « priced to perfection » mean two very different things.

AMZN current trailing 12M P/E is 86.25 and forward 12M P/E is 60.79... AAPL P/E is 14.1

SciFrog:

I am not a native English speaker but « priced for perfection » and « priced to perfection » mean two very different things.

AMZN current trailing 12M P/E is 86.25 and forward 12M P/E is 60.79... AAPL P/E is 14.1

Ad you are absolutely correct.

Pried TO perfection means Tesla is a perfect take over target for their balance sheet, growth and potential.

Priced FOR perfection means Tesla is currently priced to running on hopes and dreams without substance.

All of the VW charging stations that they are spending billions on are going to run off of Tesla Battery packs. 

https://jalopnik.com/volkswagens-charging-infrastructure-will-use-tesla-powe-1832335969

Past-President, Porsche Club of America - Upper Canada Region

Mithras:

All of the VW charging stations that they are spending billions on are going to run off of Tesla Battery packs. 

https://jalopnik.com/volkswagens-charging-infrastructure-will-use-tesla-powe-1832335969

There are plans for building a massively sized battery production facility in Germany...  Not only for the VW Group.

RC (Germany) - Rennteam Editor Audi R8 V10 Plus (2016), Mercedes E63 S AMG Edition 1 (2018), Mercedes C63 S AMG Cab (2019), Range Rover Evoque Si4 Black Edition (2019)

Tesla acquires ultracapacitor and battery manufacturer for over $200 million

SciFrog:

I am not a native English speaker but « priced for perfection » and « priced to perfection » mean two very different things.

AMZN current trailing 12M P/E is 86.25 and forward 12M P/E is 60.79... AAPL P/E is 14.1

The valuation method provided was Enterprise Value divided by Earnings Before Interest, Tax, Deprecation and Amortization not Price divided by Earnings.   The former is a standard valuation approach in the corporate finance and it is a proxy for discounted cash flow.  The latter encapsulated too many variables, unknowns, and ambiguities to use in valuations; however, it is a legacy approach from the 1960s, that some will occasionally use. 

Mithras:

All of the VW charging stations that they are spending billions on are going to run off of Tesla Battery packs. 

https://jalopnik.com/volkswagens-charging-infrastructure-will-use-tesla-powe-1832335969

So what?  The charging infrastructure needs energy storage buffers and Tesla builds a satisfactory product for that function at a competitive price.  The article also erroneously states that Electrify America is a Volkswagen subsidiary; it is not.   While it is initially funded by Volkswagen as part of the company’s settlement for violating the U.S. federal government Clean Air Act  and California Air Resource Board regulations, it functions as a separate entity.  Purchasing outside the network reenforces that Independence.

CGX car nut:

SciFrog:

I am not a native English speaker but « priced for perfection » and « priced to perfection » mean two very different things.

AMZN current trailing 12M P/E is 86.25 and forward 12M P/E is 60.79... AAPL P/E is 14.1

The valuation method provided was Enterprise Value divided by Earnings Before Interest, Tax, Deprecation and Amortization not Price divided by Earnings.   The former is a standard valuation approach in the corporate finance and it is a proxy for discounted cash flow.  The latter encapsulated too many variables, unknowns, and ambiguities to use in valuations; however, it is a legacy approach from the 1960s, that some will occasionally use. 

Do you even read the posts before replying? You don’t, that’s probably why your answers come out as some of the most condescendant recent posts here...

P/E and the multiple you pointed out are two different things, I wrote P/E next to my numbers no? Did I wrote your AAPL multiple was incorrect?

But anyway the method and inputs you used is completely moronic in the case of Tesla for 2 reasons:
1) using a mature company Lille AAPL to value a growing company like TSLA is silly
2) using LTM EBITDA (Last 12 Months) to value TSLA today when it just ramped up mass production of a mass market vehicle makes no sense.

Clearly you know a thing or two about finance, maybe you can fool the masses in your social circle, but please stop trying to make your point over the internet by throwing technical jargon at people laced with fake inputs. You are better than that.

You don’t like Tesla? Fine, opinions are very divided and some here try to make the case for each side. But fact is the company is still alive today and making tons of cars among other things. You think the stock price is too high? Again, it is priced FOR perfection, so if they don’t execute perfectly, then it is too high. I left RT a month and a half and nothing has changed, still the same dishonest rants trying to shoot down one of the most game changing company of the last decade because of some still unclear personal interest...

It is not worth getting so worked up about it SciFrog, there is never going to be agreement over something like Tesla, and nobody is going to convince anybody else no matter how much is argued, it is just one of those topics.

⇒ Carlos - Porsche 991 Carrera GTS

Not trying to convince anybody, just explaining how disingenuous is what was posted under the appearance of technical jargon...

All the while, Tesla keeps surfing on their coolness wave:

https://apple.news/A4MBY0573Sh2xrz1oM2Peow

Again, if I was a luxury auto maker selling in the US today, I would be VERY worried, not for their existence of course, but for their margins. Tesla does not even have leather in their top car and people just say: “cool, why not, I don’t care anymore anyway”.

Perhaps you should review the above postings before responding.  I have taken the liberty of pasting an image of one of  your posts above.

The Apple valuation example was posted by Boxster Coupe GTS, not me.  You responded with the Amazon multiple of 70 when Boxster Coupe GTs clearly defined his Apple EV/EBITDA multiple of 9.60x as that multiple being an erroneous comparable for Tesla.  Since you stated a multiple of 70 for Amazon, when the subject multiple pertained to EV/EBITDA multiples, it does not take much leap of logic to consider what your wrote as a EV/EBITDA multiple, not a P/E multiple-which, consequently never appears anywhere in any of posting until just recently.  

I did respond to your post on that topic by agreeing with Boxster Coupe GTS' post and further elaborating on Ford as having the higher EV multiple than Apple and how that really didn't change Tesla's valuation greatly.  It remains my opinion that Tesla is overvalued in the marketplace and has an unsustainable business model.  It is your prerogative to disagree with my assessment and that is what I stated in a previous post. 

SciFrog:

Boxster Coupe GTS:

If it turns out to be correct that Tesla growth is running out of steam ( e.g. Elon Musk has indicated that 2019 Q1 will be below 2018 Q4 and they will need some luck to make a "tiny" profit  ) then here is a "back-of-the-envelope" valuation based on FY2018 results applied to the valuation multiple of a benchmark growth company that has also been running out of steam...

• LTM EBITDA ~ $1.6bn
• EV / EBITDA multiple ~ 9.60x (based on prevailing AAPL multiple)
• Implied Enterprise Value ~ $15.36bn
• Existing Net Debt ~ $8.28bn
• Implied Equity Value ~ $7.08bn
• Outstanding Shares ~ 171,733,000
• Implied Share Price ~ $41.23 per share

...so a downside risk of 87% below the current $312 share price! 

Cleverly completely ignoring the Model Y and future roadmap for cars or solar. All of Tesla valuation is justified by the future expectations of EBITDA. Plus using the low multiple of a mature company vs the multiple of a growth stock (Amazon multiple is 70). What you posted is exactly what a biased short seller would post. And don’t get me wrong, Tesla stock is priced for perfection and I would not buy it at these levels, but what you just did is disingenuous.

 

I quoted the wrong post, sorry... everything else stays the same...

No worries, different opinions are what makes a market! You are welcome to provide your own valuation! 

As you may well know, the public equity and debt markets have rather differing views of TSLA... 

It will be an interesting year for TSLA and the global automotive industry... 

As said before, I have no view on the future price of TSLA nor do I have any direct vested interest in it, nor do I think that 99% of the analysts out there have any clue as of to how value Tesla today.

I'm in the capital markets industry and before my current job was a Thompson Reuters/Starmine #1 ranked analyst (in a different sector). It is amazing the discussions that happen with analysts (on both the buy side and sell side) looking at Tesla. There is a very good argument hat many make that Tesla is a technology company and not a car company. Some even take it a step further and say that Tesla should be valued as an App not a device and certainly not a fossil-like car company. I don't totally agree with either of those arguments but the stock price certainly shows that there is enough instiutional investors that do. 

I do know that speaking with Elon Musk (something I think few people on this board can also claim) and those around him Tesla is being built for ten years from now not today. While there is worry (and I think a certain myopathy) around near term they really think that the future for the COMPANY (not just the cars) is very bright. 

Past-President, Porsche Club of America - Upper Canada Region

Valid points, Mithras, however, the tech component of Tesla is a significantly smaller cost center than what is required for the envelope of that technology, the automobile.  Global automakers are moving toward EVs, not because of Tesla, but because of looming onerous environmental regulations severely curtailing carbon emissions.  China and the EU is leading on that front with the State of California being a close third in the race to reduce carbon emissions from transportation.  In part, Volkswagen, accelerated the move to EV following the diesel emission debacle and the company has sought out a rapid, extensive, and costly pivot toward EVs.  In reality, EVs represents another energy source for the prime mover than any disruptive technology.  That point is the crux of support for or against Tesla.

CGX car nut:

Valid points, Mithras, however, the tech component of Tesla is a significantly smaller cost center than what is required for the envelope of that technology, the automobile.  Global automakers are moving toward EVs, not because of Tesla, but because of looming onerous environmental regulations severely curtailing carbon emissions.  China and the EU is leading on that front with the State of California being a close third in the race to reduce carbon emissions from transportation.  In part, Volkswagen, accelerated the move to EV following the diesel emission debacle and the company has sought out a rapid, extensive, and costly pivot toward EVs.  In reality, EVs represents another energy source for the prime mover than any disruptive technology.  That point is the crux of support for or against Tesla.

And this has nothing to do with the fact that Tesla was/is the #1 selling car in the luxury segment in the most advanced automobile market in the world, riiigghhtt.

Luxury segment? Those who bought a Tesla and think they bought a luxury car because of the pricetag they charged them are going to feel very silly and stupid all of a sudden when they stop next to a Taycan at a stoplight side by side 

⇒ Carlos - Porsche 991 Carrera GTS

They won’t when the Tesla will accelerate and easily smoke the Porsche 

SciFrog:

They won’t when the Tesla will accelerate and easily smoke the Porsche 

Yeah, until the first corner comes  ... but actually they will look even more silly and petty trying to do stoplight straight line races against the Porsche who will likely just ignore him 

⇒ Carlos - Porsche 991 Carrera GTS

Tesla drops Model 3 prices by over $1,000 today... getting closer to $35k... Second price drop since the beginning of the year.

The Nay sayers will say Model 3 demand is collapsing, the rest will say lower production costs allows for a cheaper price... Pick your side...

"Tesla cuts Model 3 price for second time this year" (Bloomberg)

(6 February 2019)

Earlier this month, Tesla cut U.S. prices for all its vehicles to offset lower green tax credits, and fell short on quarterly deliveries of its mass-market Model 3 sedan.

SAN FRANCISCO — Tesla Inc. is cutting the price of its Model 3 sedan for the second time this year, citing the end of a customer-referral program that was a more costly incentive than the company realized.

All versions of the Model 3 will cost $1,100 less, lowering the starting price of the car to $42,900. The move follows a $2,000 price cut on all Teslas announced in early January to partially offset the reduction in the U.S. federal tax credit its vehicles were eligible for.

CEO Elon Musk put an end to Tesla's referral program at the beginning of this month. The company, which doesn't do traditional advertising, gave new customers months of free access to its supercharger network if they were referred by a friend. Top referrers have won prizes as valuable as a next-generation Roadster sports car.

Musk announced to employees last month that Tesla would reduce headcount by about 7 percent, citing the challenges the company faces making its vehicles affordable without compromising profitability.

"I want to be a broken record about this: It's cost, cost, cost, cost," the CEO said during Tesla's earnings call last week. "Getting those costs down — variable costs and fixed costs — is what allows us to lower the price and be financially sustainable and achieve our mission of environmental sustainability. We have to be absolute zealots about this, there's no question."

LInk:  https://www.autonews.com/retail/tesla-cuts-model-3-price-second-time-year

SciFrog:

They won’t when the Tesla will accelerate and easily smoke the Porsche 

That also depends how many stop lights have passed already. The Tesla could as well just go into limp mode after repeated use you know. 

Tesla is lucky to have very supportive shareholders who allow them to grab market share (ie lower price) vs trying to make a quick buck. At these elevated prices, Tesla stock is a long term play. You believe or you don’t. And they cut work force 7% and no one says anything. In France, everyone would strike and block the factory and the cost to reduce the work force would be really high.