Stock (Symbol) |
Tesla (TSLA) |
Stock Price |
$255 |
Sector |
| Technology |
Data is as of |
| March 23, 2017 |
Expected to Report |
| May 2 – 8 |
Company Description |
 Tesla Motors, Inc. is a United States-based company, which designs, develops, manufactures and sells electric vehicles, electric vehicle powertrain components and stationary energy storage systems. TSLA sells and produces a vehicle under the name Model S, which is a fully electric, four-door, five-adult passenger sedan. In addition to developing its own vehicles, it develops, sells, and services full electric powertrain systems and components to other automobile manufacturers. It also produces and sells stationary energy storage products for use in homes, commercial sites and utilities. It sells its vehicles through its own sales and service network. The Company also offers the Model X electric car, Supercharger charging stations and Powerwall, a home battery. Source: Thomson Financial |
Sharek’s Take |
 Tesla (TSLA) is gearing up to start production of its Model 3 within three months, with deliveries anticipated by the end of 2017. By the end of 2018 Tesla’s CEO Elon Musk believes the company will be producing 500,000 cars per year. Tesla has delivered 3000 vehicles in 2012, 22,000 in 2013, 35,000 in 2014, 50,000 cars in 2015, and 84,000 last year. Getting to half-a-million is a monumental task, but the company has been revolutionizing the car industry the past five years, and seems to be up to the challenge. Tesla’s flagship is the Tesla S, which went from prototype to production in 2012 and within three years owned one-qtr of the U.S. Large Luxury Vehicle market. In 2015 the company rolled out the Tesla Model X, an all-wheel drive SUV with falcon wing doors, seating for 7, and is ridiculously fast. After the Model 3, the next venture will be the Tesla Y compact SUV, followed by a minibus for public transportation. Tesla will revolutionize the world as we know it. Within the next few years 20%-25% of Americans could be driving Tesla cars with Solar City roof panels charging the cars at night and providing power to the home. Billionaire fund manager Ron Baron feels investors could make 30 to 50 times their money in 15 years. But in the meantime the stock has been rangebound for three years, and my guess is the stock could breakout once the Model 3s begin shipping. Analysts have TSLA’s 2020 profit estimates at $12.65, and a 45 P/E on that would mean a $569 stock and perhaps a double in three years. But this is just a guestimate as we really don’t have any idea how much the company can make. |
One Year Chart |
 A few qtrs ago TSLA was expected to be making profits by now. And it did make a profit 2QtrsAgo. Then LastQtr the company reported a loss as revenues grew 31%. Both qtrly and 2017 profit estimates fell, but 2018’s went up a bit. 2018 profit estimates have been on a roller coaster the last 4 qtrs, traveling from $6.91 to $5.62, $1.34 and now $2.48 the last 4 qtrs. The Est. LTG is 35% is great but I think perhaps the company can do better. |
Fair Value |
 Tesla stock is hard to get a Fair Value on because the company is spending to grow. But I do think the stock should break out and run higher once the Model 3s are being shipped. Thus I placed a Fair Value of 140x earnings on the stock for now, just to get to the $347 Fair Value for next year. This Fair Value P/E is just high for the time being, I anticipate ratcheting it down if or when profits start to roll in. |
Bottom Line |
 Tesla is one of the greatest investment opportunities of our lifetime, but for now the stock is stuck in a trading range between $180 and $280. Once we start getting news of Model 3 shipments I feel TSLA will break out and head higher, but shipments aren’t anticipated until the 4th qtr of this year. For now TSLA ranks 6th in the Growth Portfolio and Aggressive Growth Portfolio Power Rankings. I feel investors should use this time to accumulate shares. |
Power Rankings |
Growth Stock Portfolio
6 of 31Aggressive Growth Portfolio 6 of 16Conservative Stock Portfolio N/A |
