Tesla Motors Inc (TSLA) Irrational Exuberance In The Electric …

26 Апр 2014 | Author: | Комментарии к записи Tesla Motors Inc (TSLA) Irrational Exuberance In The Electric … отключены
Tesla Motors Electric Cars

Irrational Exuberance In The Electric Car

Last week’s spike in Motors (TSLA ) was a market consistent with a short-term and demand imbalance in the stock. calls and the race to exit positions in Tesla created a number of buyers relative to sending the stock irrationally As a result, the stock has become from its intrinsic value, a that should correct this week as cooler prevail.

Industry comps below) show that to come close to justifying its valuation, Tesla must near perfect execution the next two years in a favorable environment. Currently Tesla at $433,000 per car they sell, the fact that they make

$15,000 per car in gross margin. if they ramp production 5x to cars by 2015, they still be trading at $91,000 per car sell (compared to the current median of $22,000). Assuming reaches an industry median 9% margins (something that has other car companies many of learning), in two years the company still be trading at 11x EBITDA.

The is currently trading at 4.7x projected sales vs. an industry of .9x. These valuations be justified if the company had a scalable platform with 70-80% margins, but not on a 17% gross margin company.

(click to enlarge)

on price range, size, and the closest equivalents to Tesla’s product, the Model S, are the BMW 7 Series and the Panamera. Last year, the BMW 7 sold 60,000 units and the Panamera sold around units. This was largely through an extensive dealer something Tesla lacks Tesla currently can only

20,000 units a year current capacity. Increased will likely require an secondary offering to fund since the company is not generating cash and only has

200mm in on the balance sheet (of which

are customer deposits). Finally, it is to keep in mind the simple that because of its range the Model S cannot be a primary but will always be a second or vehicle for a multi-car household. even if you consider an optimistic of 100,000 units per year, valuation is still off the charts.

It is also important to understand competitive positioning. Currently the production is a mere rounding to any other major car company. the hype, Tesla did not invent the car and does not even have a market share within the Toyota (TM ), Honda (HMC ), Motors (GM ) and Ford (F ) have millions of electric and hybrid While Tesla has opened up a new the luxury/performance electric car, to it as the industry leader or sole in electric cars is a stretch.

It take a patent expert to do the but if you compare Tesla’s $200mm a in RD to any of the major auto manufacturers’ dollar research investments it is Tesla has no real advantage As has been observed in many the incumbent players have let spend hundreds of millions on a of concept and will likely in to compete with far superior and cross platform knowledge.

In the short term Tesla settle back to the low $60s its 10 and 20 day moving averages:

(click to

Over the longer term, are the catalysts that could shift the stock price:


Company announces in sales/backlog

Tesla announces a new cheaper car model

Company sales agreement with car dealer network

Tesla Motors Electric Cars

Short capitulation/squeeze higher


Ford, GM, Toyota, or major car company launches a product

Quality issues with the Model S, in particular of battery life would damage the brand

Initial boom fades, they been pushing for buyers to orders forward

Energy signals phase out of electric tax credits which will vehicle costs to consumers by

Analyst downgrades or large fund comments on fundamentals

launches a secondary offering at a price and dilutes ownership

stock sales, which been low up to this point

For the the author has test driven the S.

Disclosure: I am short TSLA. I this article myself, and it my own opinions. I am not receiving compensation for it than from Seeking I have no business relationship any company whose stock is in this article. (More. )

Tesla Motors Electric Cars
Tesla Motors Electric Cars
Tesla Motors Electric Cars
Tesla Motors Electric Cars


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