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Tesla the canary in the mine !

  • 21-09-2020 8:06pm
    #1
    Registered Users Posts: 5,894 ✭✭✭ handlemaster


    Is Tesla the poster boy for all that is off with this over priced stock market ? Will we look back at this and laugh at how crazy this stock is priced.. This run will end and this market will pop. The fundamentals and reality will have to arrive in the forefront of the investors decision making and not this dream reality we now have.


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Comments

  • Registered Users Posts: 807 ✭✭✭ Jimbobjoeyman


    By what fundementals do you consider tesla to be overpriced ?

    Very curious on peoples views of this


  • Registered Users Posts: 1,265 ✭✭✭ Jizique


    By what fundementals do you consider tesla to be overpriced ?

    Very curious on peoples views of this

    Well, stripping out money it gets for credits from other automakers (which will decline as rivals build their own EV capacity), they are unprofitable


  • Registered Users Posts: 807 ✭✭✭ Jimbobjoeyman


    Jizique wrote: »
    Well, stripping out money it gets for credits from other automakers (which will decline as rivals build their own EV capacity), they are unprofitable

    According to last years 10k that accounted for 2.4% of revenue and in the 6 months to June 202 it accounted for 7%.

    Well up on last year for sure but given the impact of COVID if you can pad your income statement you may as well.

    I can only see it being an issue if it stays in the 7-10% mark in the future.
    Bigger issue looking at it quickly are the runaway costs with a 4% gross profit margin last year.

    Very difficult equity to price though as al assumptions modelling cashflows are really just a guess as theres nothing comparable.


  • Registered Users Posts: 146 ✭✭ letitroll




    Very difficult equity to price though as al assumptions modelling cashflows are really just a guess as theres nothing comparable.

    "Nothing comparable"........except for the 30+ publicly listed global auto oems.......that move metal just like Tesla does......I've seen nothing that suggests an electric motor inside that same metal shell changes the economics of the business one iota


  • Registered Users Posts: 5,803 ✭✭✭ touts


    Tesla are a multibillion dollar concept trapped in a multi-million dollar company. They are making cars by hand in tents because the automated factories don't have the capacity to match the orders Musk is taking in.

    Eventually one of Google or Apple will buy it. Until then it will be like riding a rollercoaster maintained by a lad who smokes pot. Great highs, Scary lows. And the longer you ride it the looser those nuts and bolts are becoming.


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  • Registered Users Posts: 5,894 ✭✭✭ handlemaster


    By what fundementals do you consider tesla to be overpriced ?

    Very curious on peoples views of this


    The current PE is 1151. Thats 1151... or another way of looking at it is simply this is just not adding up. Way over priced .


  • Registered Users Posts: 807 ✭✭✭ Jimbobjoeyman


    The current PE is 1151. Thats 1151... or another way of looking at it is simply this is just not adding up. Way over priced .

    What are you comparing it to ?
    Just randomly quoting a P/E ratio by itself doesnt necessarily mean anything.

    The underlying growth prospects in comparison to something like ford are considerably higher, granted with a steep discount rates on any future cashflows if there are any. That in itself would warrant a higher P/E but doesnt necessarily make it unjustified.

    Personally, I wouldn't touch it as its as touts said its basically gambling at this stage and driven by a screwed market.
    But I'm not sure its overpriced as thats a matter of opinion and depends on where you think its future growth prospects are.

    New management is definately needed before it can justify anything close to where it is now though.


  • Registered Users Posts: 5,894 ✭✭✭ handlemaster


    What are you comparing it to ?
    Just randomly quoting a P/E ratio by itself doesnt necessarily mean anything.

    The underlying growth prospects in comparison to something like ford are considerably higher, granted with a steep discount rates on any future cashflows if there are any. That in itself would warrant a higher P/E but doesnt necessarily make it unjustified.

    Personally, I wouldn't touch it as its as touts said its basically gambling at this stage and driven by a screwed market.
    But I'm not sure its overpriced as thats a matter of opinion and depends on where you think its future growth prospects are.

    New management is definately needed before it can justify anything close to where it is now though.[/QUOTE

    Growth prospects. So your saying the price is whatnit is because they might achieve some imaginary fig in the future. The stock is so off the charts its crazy. Why buy today what you expect to happen in 10 years time. I have no issue with buying a stock when the valuation can clearly be seen in the near horizon. But as you say this is gambling based on just smoke and mirrors. There's a lot FOMO here.


  • Registered Users Posts: 807 ✭✭✭ Jimbobjoeyman


    What are you comparing it to ?
    Just randomly quoting a P/E ratio by itself doesnt necessarily mean anything.

    The underlying growth prospects in comparison to something like ford are considerably higher, granted with a steep discount rates on any future cashflows if there are any. That in itself would warrant a higher P/E but doesnt necessarily make it unjustified.

    Personally, I wouldn't touch it as its as touts said its basically gambling at this stage and driven by a screwed market.
    But I'm not sure its overpriced as thats a matter of opinion and depends on where you think its future growth prospects are.

    New management is definately needed before it can justify anything close to where it is now though.[/QUOTE

    Growth prospects. So your saying the price is whatnit is because they might achieve some imaginary fig in the future. The stock is so off the charts its crazy. Why buy today what you expect to happen in 10 years time. I have no issue with buying a stock when the valuation can clearly be seen in the near horizon. But as you say this is gambling based on just smoke and mirrors. There's a lot FOMO here.


    Completely agree, theres a fair share of gambling going on here.
    But price is exactly what youve described above.

    Price is a function of expected future cash flows discounted to present value. Not past or present.
    High growth prospects - high price.

    I agree its gone out of control as regards tesla with people jumping on the bandwagon.

    The issue with pricing tesla is that nobody knows what its cashflows are going to be in the future and this is what I'm saying. I wouldn't even attempt to try price it but at the same time I wouldn't outright say its overvalued just because it looks that way.


  • Banned (with Prison Access) Posts: 186 ✭✭ Kickstart1.3


    Tesla are simply years ahead of any other car maker in terms of EV technology. If anything they are constantly under selling their performance figures. The company is vibrant and forward thinking. You can get sacked from Tesla if you do not innovate!!
    The company culture is fantastic, changes can happen and are implemented at light speed. Compared to the likes of Ford which is a nightmare of layers of management, tiers of Bureaucracy and an old stale workforce. Any employee that was any good left them years ago.
    VW is a bit better but they too suffer from Bureaucracy and inertia to some extent.

    Don't bet against the Musk


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  • Registered Users Posts: 17,706 ✭✭✭✭ Cyrus


    Tesla are simply years ahead of any other car maker in terms of EV technology. If anything they are constantly under selling their performance figures. The company is vibrant and forward thinking. You can get sacked from Tesla if you do not innovate!!
    The company culture is fantastic, changes can happen and are implemented at light speed. Compared to the likes of Ford which is a nightmare of layers of management, tiers of Bureaucracy and an old stale workforce. Any employee that was any good left them years ago.
    VW is a bit better but they too suffer from Bureaucracy and inertia to some extent.

    Don't bet against the Musk

    they were years ahead, the gap is getting smaller.

    VWs ID3 is the start of it.


  • Banned (with Prison Access) Posts: 186 ✭✭ Kickstart1.3


    Cyrus wrote: »
    they were years ahead, the gap is getting smaller.

    VWs ID3 is the start of it.

    Really? if anything the gap has grown over the last 12 months

    VW were on the right track but they suffer from bureaucracy. Point being Herbert Diess the man who had the foresight to try and move VW in the direction of EV was booted out.


  • Registered Users Posts: 17,706 ✭✭✭✭ Cyrus


    Really? if anything the gap has grown over the last 12 months

    VW were on the right track but they suffer from bureaucracy. Point being Herbert Diess the man who had the foresight to try and move VW in the direction of EV was booted out.

    in what way has it grown? there are tonnes of options now to buy EV's

    Audi, mercedes & jaguar all now have alternatives to the model x for example.


  • Banned (with Prison Access) Posts: 186 ✭✭ Kickstart1.3


    The model X is old tech now. Look at the specs for the model Y. The Battery tech alone is far superior. It can fast charge to 75 miles of range in under 5 minutes. No other manufacturer is within an asses mile of this.


  • Registered Users Posts: 17,706 ✭✭✭✭ Cyrus


    The model X is old tech now. Look at the specs for the model Y. The Battery tech alone is far superior. It can fast charge to 75 miles of range in under 5 minutes. No other manufacturer is within an asses mile of this.

    Tesla model 3 and Y have high headline charging speeds but they drop quickly as the SOC increases, both the audi e-tron and porsche taycan have similar high charging speeds but they also maintain higher speeds as the SOC increases.


  • Banned (with Prison Access) Posts: 186 ✭✭ Kickstart1.3


    No they are a long way off. The e-tron has a fast charge option to 80% takes 30 minutes on a very small battery so they are doing a bit of a trevor milton with their words.
    Plus just look at the price of them!!


  • Registered Users Posts: 17,706 ✭✭✭✭ Cyrus


    No they are a long way off. The e-tron has a fast charge option to 80% takes 30 minutes on a very small battery so they are doing a bit of a trevor milton with their words.
    Plus just look at the price of them!!

    E-tron battery is 83.5kw v the 72.5kw of the model Y (Usable). The taycan is the fastest charging ev at the moment.


  • Registered Users Posts: 17,706 ✭✭✭✭ Cyrus


    No they are a long way off. The e-tron has a fast charge option to 80% takes 30 minutes on a very small battery so they are doing a bit of a trevor milton with their words.
    Plus just look at the price of them!!

    take a look at the actual charging performance

    https://www.youtube.com/watch?v=UHLpVyJJ3g4

    https://www.youtube.com/watch?v=5FWlFdLwV94

    55 min to charge a model 3


  • Registered Users Posts: 1,201 ✭✭✭ Man with broke phone


    He announced a million mile battery today I think. His cars and trucks batteries will last a million miles. Not per charge but per battery replacement. This is good because it was an issue with EVs being so expensive but needing expensove battery replacements I think.

    Im sure somebody will buy them out sooner or later. The technology is what keeps the share price up not the actual day to day profit. I do think he is very fashionable at the moment which usually means its too late to buy in and probably time to cash in.


  • Registered Users Posts: 15,822 ✭✭✭✭ Mantis Toboggan


    Only EV's I ever see are Hyundai's, Kia's and Nissan.
    Covid will move EV's out a few years.


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  • Registered Users Posts: 5,894 ✭✭✭ handlemaster


    He announced a million mile battery today I think. His cars and trucks batteries will last a million miles. Not per charge but per battery replacement. This is good because it was an issue with EVs being so expensive but needing expensove battery replacements I think.

    Im sure somebody will buy them out sooner or later. The technology is what keeps the share price up not the actual day to day profit. I do think he is very fashionable at the moment which usually means its too late to buy in and probably time to cash in.


    People keep saying the tech..But other manufacturers will catch up now they are focused on EV and are profitable and can generate their R&D from their cash flow. Also Germany and France have teamed up on this. The fact that their.tech might be better the general public dont give a rats ass about that. Its price comfort , KPC and speed of charging that will win out. Yes I know tech plays into this. Tesla has lots of tech such as self driving.. when are you going to use that ? Nissan leaf is also very popular EV in Europe and at a more affordable level


  • Registered Users Posts: 1,853 ✭✭✭ Atlas_IRL


    The others are years behind Tesla and its all here https://www.tesla.com/en_IE/blog/master-plan-part-deux


  • Registered Users Posts: 2,987 ✭✭✭ haphaphap


    The model X is old tech now. Look at the specs for the model Y. The Battery tech alone is far superior. It can fast charge to 75 miles of range in under 5 minutes. No other manufacturer is within an asses mile of this.
    Their battery tech is no better than what the Chinese are currently willing to sell to anyone and the ID3 motor efficiency has surprised TeslaBjorn.


  • Registered Users Posts: 1,265 ✭✭✭ Jizique


    According to last years 10k that accounted for 2.4% of revenue and in the 6 months to June 202 it accounted for 7%.

    Well up on last year for sure but given the impact of COVID if you can pad your income statement you may as well.

    I can only see it being an issue if it stays in the 7-10% mark in the future.
    Bigger issue looking at it quickly are the runaway costs with a 4% gross profit margin last year.

    Very difficult equity to price though as al assumptions modelling cashflows are really just a guess as theres nothing comparable.

    Sure, small part of revenue but 100% drop through to profit so a much bigger part of that, regularly over 100%


  • Registered Users Posts: 146 ✭✭ letitroll


    “Eventually every car company will have high range electric cars. All companies will have autonomy eventually. But not all companies will be as good at manufacturing as Tesla”

    ~Elon Musk - Battery Day 2020

    You heard it from the guru himself yesterday at Battery Day. Tesla bulls have justified its crazy share prices for years on the believe that Tesla has some intractable monopoly on long range EV's / batteries & Tesla will be the only auto OEM to 'solve' autonomy. Elon dropped some truth on you all. They wont - so why the share price so high again?

    The manufacturing comment is hilarious given the widely reported production quality on Tesla vehicles to date (panel gaps, bumpers coming of in the rain, tape holding together parts). The one area even Tesla bulls admit they have problems with is reaching even Korean level manufacturing standard never mind Japanese / German.


  • Registered Users Posts: 2,987 ✭✭✭ haphaphap


    He also explained that Tesla is barely profitable despite the high share price.
    He is not going to be on the hook if the share price collapses. He is not saying these innovations will justify the share price. They will just make the cars profitable on a unit basis and allow him to ramp production more quickly.

    The Chinese in the last year are ramping up production of EV batteries with low precious metal content and very decent energy density. Investors may not see this but he can.

    He is also making it clear that there is practically no market for vehicle to grid.

    He also said that the batteries he is planning will not be energy dense enough for Aviation use. Cars and Light trucks is where it is at for Tesla.

    He isn't making huge claims for domestic battery storage either because he knows the innovations with regard to energy density and materials don't matter in applications where the batteries can afford to be heavy and that will be a domestic white good in the future.

    I'm surprised he is able to stay so realistic about what the Company can achieve with so many sycophants whooping and hollering in his ear 24 hours a day.

    I see Tesla and for example Amazon as well run innovative companies but I just can't jump on the train because they are priced beyond realistic valuations.


  • Registered Users Posts: 5,894 ✭✭✭ handlemaster


    the market when it opens will show a big drop for Tesla. Investors weren't impressed with battery day.


  • Registered Users Posts: 17,706 ✭✭✭✭ Cyrus


    i like tesla, but they are wildy overvalued, as the earlier poster illustrated there are a lot of misconceptions about how far ahead (or not) they are of the game, and once the german giants get moving they will take control.

    id be surprised if they exist as an independent entity in a decades time.


  • Registered Users Posts: 2,987 ✭✭✭ haphaphap


    the market when it opens will show a big drop for Tesla. Investors weren't impressed with battery day.
    The only thing that would have satisfied would have been the magic catchphrase "solid state".


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  • Registered Users Posts: 1,265 ✭✭✭ Jizique


    Really? if anything the gap has grown over the last 12 months

    VW were on the right track but they suffer from bureaucracy. Point being Herbert Diess the man who had the foresight to try and move VW in the direction of EV was booted out.

    The Herbert Diess who is CEO of VW Group? That Herbert Diess?


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