Company Overview
Tesla, Inc. (TSLA)
Tesla, Inc. designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems. The company operates in two segments, Automotive; and Energy Generation and Storage. The Automotive segment offers electric vehicles, as well as sells automotive regulatory credits; and non-warranty after-sales vehicle, used vehicles, body shop and parts, supercharging, retail merchandise, and vehicle insurance services.
| Industry: | Auto Manufacturers |
|---|---|
| Sector: | Consumer Cyclical |
| Employees: | 125,665 |
| Website: | www.tesla.com |
Key Metrics
| Current Price: | $278.39 |
|---|---|
| Market Cap: | $895.45 billion |
| P/E Ratio: | 136.47 |
| 52-Week High: | $488.54 |
| 52-Week Low: | $138.80 |
| Annualized Volatility: | 59.85% |
Financial Analysis
Revenue & Earnings Trends
Margins & Profitability
Income Statement Highlights (Billions USD)
| Year | Revenue | Gross Profit | Net Income | Gross Margin | Net Margin |
|---|---|---|---|---|---|
| 2024 | $97.69 | $17.45 | $7.13 | 17.86% | 7.30% |
| 2023 | $96.77 | $17.66 | $15.00 | 18.25% | 15.50% |
| 2022 | $81.46 | $20.85 | $12.58 | 25.60% | 15.45% |
| 2021 | $53.82 | $13.61 | $5.52 | 25.28% | 10.26% |
Balance Sheet (Billions USD)
| Item | 2024 |
|---|---|
| Total Assets | $122.07 |
| Total Liabilities | $48.39 |
| Cash and Equivalents | $16.14 |
| Long-term Debt | $5.54 |
Cash Flow (Billions USD)
| Item | 2024 |
|---|---|
| Operating Cash Flow | $14.92 |
| Capital Expenditure | -$11.34 |
| Free Cash Flow | $3.58 |
Key Financial Ratios (2024)
Technical Analysis
Technical Indicators
Moving Averages & Price Action
Technical Outlook
Moving Averages
Bearish - Price is below both 50-day and 200-day MAs
Golden Cross
Bullish - In effect (50-day MA above 200-day MA)
RSI
Neutral - At 49.60, neither overbought nor oversold
MACD
Bullish Momentum Building - MACD above signal line but below zero
Support/Resistance
Neutral - Price between support ($217.02) and resistance ($367.34)
Overall Technical Bias: Moderate Bearish
Bullish Signals: 2 | Bearish Signals: 4
Technical indicators suggest downward pressure in the near term, though some positive divergences are forming. Watch for potential reversal signals if price approaches support level.
Competitive Analysis
Tesla vs Electric Vehicle Competitors
Comparative Metrics
| Company | Market Cap ($B) | Revenue ($B) | Gross Margin (%) | P/E Ratio |
|---|---|---|---|---|
| Tesla (TSLA) | 895.45 | 97.69 | 17.86 | 136.47 |
| Ford Motor (F) | 40.63 | 184.99 | 8.38 | 7.02 |
| General Motors (GM) | 51.20 | 187.44 | 12.49 | 8.08 |
| Rivian (RIVN) | 13.78 | 4.97 | N/A | N/A |
| NIO (NIO) | 9.40 | 55.62 | 5.49 | N/A |
| Lucid (LCID) | 7.49 | 0.81 | N/A | N/A |
Competitive Position Analysis
- Market Dominance: Tesla holds the largest market cap among EV manufacturers, over 17x larger than its closest pure EV competitor (Rivian).
- Revenue Growth: Tesla's revenue is substantially larger than pure EV competitors but still trails traditional automakers like Ford and GM.
- Profitability Edge: Tesla maintains higher gross margins (17.86%) than traditional automakers and other EV manufacturers, demonstrating better unit economics.
- Valuation Premium: Tesla trades at a significant P/E premium (136.47) compared to traditional automakers (7-8x), reflecting market expectations for continued growth and technology leadership.
- Scale Advantage: Tesla's production volume and global footprint provide advantages in supply chain management and economies of scale compared to newer EV entrants.
Valuation Analysis
Discounted Cash Flow Valuation
Key DCF Assumptions
Free Cash Flow Projections (Billions)
Note: The extremely high intrinsic value is driven by projecting recent growth rates forward. This highlights the sensitivity of DCF models to input assumptions and the need for conservative estimates when valuing high-growth companies.
Multiple-Based Valuation
While Tesla trades at substantial premiums to traditional automakers, comparing it to pure-play EV manufacturers and technology companies provides additional context:
- P/E Ratio: At 136.5x, Tesla trades at a premium to the S&P 500 average (24x) but below many high-growth technology companies.
- P/S Ratio: Tesla's 9.2x price-to-sales is high for an automaker but modest for a technology company with high gross margins.
- EV/EBITDA: At approximately 55x, Tesla trades at a premium to both automotive and technology sector averages.
Sensitivity Analysis
Intrinsic Value Per Share at Different Discount and Terminal Growth Rates
| Discount Rate | Terminal Growth Rate: 2.0% | Terminal Growth Rate: 3.0% | Terminal Growth Rate: 4.0% |
|---|---|---|---|
| 8.0% | $30,600.05 | $35,504.93 | $42,862.26 |
| 9.0% | $26,212.99 | $29,589.67 | $34,317.01 |
| 10.0% | $22,926.31 | $25,367.98 | $28,623.53 |
| 11.0% | $20,373.09 | $22,204.65 | $24,559.51 |
| 12.0% | $18,333.16 | $19,746.77 | $21,513.79 |
Important Note: The DCF model results in extremely high valuations due to the projected growth rates and the company's relatively low current free cash flow compared to its potential. This demonstrates both the promise and the risk in Tesla's valuation - small changes in assumptions lead to large valuation differences.
While these DCF values suggest significant undervaluation, investors should consider:
- The high uncertainty in future cash flow projections
- Execution risks in scaling production and maintaining margins
- Competitive pressures in the EV market
- The need for multiple valuation approaches when analyzing high-growth companies
SWOT Analysis
Strengths
- Market leader in electric vehicles with strong brand recognition
- Vertical integration from battery production to vehicle manufacturing
- Technological innovation in EV, battery, and autonomous driving
- Strong global manufacturing footprint (US, China, Germany)
- Diversified product portfolio (vehicles, energy storage, solar)
- Supercharger network provides competitive advantage
- Significant data collection from vehicle fleet for AI/FSD development
- Charismatic leadership with strong vision
- Strong cash position allowing for continued investment
Weaknesses
- High valuation multiples compared to traditional automakers
- Production challenges and quality control issues
- Intense competition in the growing EV market
- Dependency on regulatory credits for profitability in past years
- Limited vehicle model range compared to established automakers
- Management focus concerns with CEO's involvement in multiple companies
- Vehicle price reductions impacting margins
- Delays in promised products (Cybertruck, Roadster, Semi)
- Governance concerns and limited board independence
Opportunities
- Growing global EV market with supportive government policies
- Expansion into energy generation and storage markets
- Further international market penetration (particularly developing markets)
- Advancement of Full Self-Driving (FSD) technology and robotaxis
- Expansion of product line (Cybertruck, Semi, compact vehicles)
- Battery technology improvements reducing costs
- AI and robotics ventures (Optimus robot)
- Potential recurring revenue from software subscriptions
- Charging network monetization
Threats
- Intensifying competition from traditional automakers and EV startups
- Potential economic downturns affecting premium vehicle sales
- Supply chain disruptions and raw material price increases
- Regulatory challenges in various markets
- Potential reduction or elimination of EV incentives
- Technology disruptions from new competitors
- Safety and regulatory scrutiny of autonomous driving technology
- Cybersecurity risks with increasing vehicle connectivity
- Potential for internal leadership challenges
Investment Recommendations
Market Sentiment
Recommendations by Investor Type
Growth Investors
Profile: Focus on capital appreciation, higher risk tolerance, longer time horizon
Rationale: Long-term growth story intact, but valuation presents near-term risks
Strategy: Dollar-cost average or buy on significant dips (10%+ corrections)
Value Investors
Profile: Focus on intrinsic value, margin of safety, lower risk tolerance
Rationale: Current valuation metrics (P/E, P/S, P/FCF) significantly exceed value investment criteria
Alternative: Consider established automakers with EV transition plans and lower valuations
Income Investors
Profile: Focus on dividends and income generation
Rationale: Tesla does not pay dividends and is unlikely to in the foreseeable future
Alternative: Consider utilities with renewable energy exposure or dividend-paying auto manufacturers
Momentum/Tactical Traders
Profile: Focus on price trends, technical signals, and shorter time horizons
Rationale: Negative price momentum and potential technical resistance
Strategy: Consider tactical shorts or put options with strict risk controls
ESG Investors
Profile: Focus on environmental, social, and governance factors
Rationale: Strong environmental impact through EV and clean energy; governance concerns
Considerations: Balance positive environmental impact vs. governance and social concerns
Overall Investment Conclusion
Rationale: Tesla remains an innovation leader with significant growth potential, but the current valuation demands caution
Time Horizon: Long-term (5+ years) investment required to justify current valuation
Key Monitoring Points:
- Gross margin trends and pricing strategy
- Full Self-Driving (FSD) technology progress
- Production ramp of new models (Cybertruck, Semi)
- Energy business growth and profitability
- Competition intensity and market share trends