undefined | Better HN

0 pointshighwaylights3y ago0 comments

Even if that reasoning were true, the valuation for Tesla doesn’t make much sense, given they’re not remotely close to a self-driving car in the way that the average customer would understand it.

They’re not delayed by a few years. The problem is intractable, unless you can limit the journey to a controlled scope.

I drive over multiple pathways and grassy lanes a week that aren’t mapped and have no markings. A self-driving car can’t arbitrarily account for something like that any time soon.

Waymo is able to operate a limited route in Phoenix because they restrict to best-case routes.

0 comments

6 comments · 1 top-level

jliptzin3y ago· 5 in thread

FSD is a very small component of Tesla' current stock price. Some dumbasses are certainly buying Tesla because they think FSD is right around the corner, but dumbasses tend to not have a lot of money.

For any Tesla price estimate, you've got to pick a number, how many million vehicles the company will ship in say 2025.

Then pick an Average Selling Price, profit margin, and P/E multiple.

Divide by 3 billion to get the price per share of your estimate.

Considering Tesla is on track to deliver 1.8M vehicles this year and the delivery growth trajectory it's been on, 4M is a good target goal for 2025, $45k ASP, 10% profit margin, 30 P/E . . . from that I get $180, so today's price is fair as a base case for 2025.

$400 was a nice top in 2022 and I think we'll see it before 2025 as Tesla Energy starts contributing to the bottom line, each $1B of profit from energy is worth $10 on the share price (30 P/E, 3B shares).

If you think $180 for Tesla is way too high you have to account for that in the model...either 2025 deliveries will be a lot less than 4 million, or 10% profit margin will come way down, or P/E will come way down below 30 (it's currently 51).

https://www.reddit.com/r/teslainvestorsclub/comments/13obftu...

blake13y ago

This is not the way I would do stock valuation. PE is the ratio of future earnings will all its growth to current earnings, discounted. In the future, some of that growth will be in the past, and the PE will be expected to come down. This being Tesla, you could imagine some new fancy product, and not value it strictly as a car company.

Edit: I see that you actually addressed the PE roll down. Missed that on the first read.

ohgodplsno3y ago

>dumbasses tend to not have a lot of money.

If wealth made people smart or gave them taste, we'd know. Dumbasses do tend to have a lot of cash, that's why they can happen to be dumbasses repeatedly.

jliptzin3y ago

Some dumbasses do, most don’t.

badpun3y ago

> Considering Tesla is on track to deliver 1.8M vehicles this year and the delivery growth trajectory it's been on, 4M is a good target goal for 2025, $45k ASP, 10% profit margin, 30 P/E . . . from that I get $180, so today's price is fair as a base case for 2025.

That's a lot of assumptions. Why not wait 3 years till all those projections materialize, and buy it then for $180 (if the price is still there)? Currently, if you buy at $180, you're discounting all the uncertainty and risk included in your calculations. Not to mention, even if you're right, the stock will be worth $180 in 3 years from now, which means your money will be idling for 3 years if you buy now.

highwaylightsOP3y ago

This. It’s being priced as if the best possible case has already happened and can be taken for granted with 100% certainty, which if that’s the case, still means you’d be better somewhere else for the interim.

1 more reply

j / k navigate · click thread line to collapse