Tesla is up 145 this year alone but it's down 332 3.32 9.11 never forget today alone now it's been all over the board we had a low back in January 6th of this year of 101. that was 52-week low all-time high November 4th 2021 a little under two years ago of 414 dollars now this is a company then the last two years have seen sales go from 41.86 billion to 94 billion dollars and yet the stock is down why or valuation maybe now in this video guys I'm gonna go over Tesla Tesla stock we're gonna go over some high level metrics we're gonna go over some news articles we're going to go over some Bull and Bear cases from our community members we're asking our community members to give their Bull and Bear cases so we can see what they're saying and share it with you guys we're going to go over some analyst estimates and of course two major parts of our software the eight pillars and the stock analyzer tool and the stock analyzer tool will be the one we use to make assumptions about the future and tell us what price to pay based on those assumptions now whether you're a beginning your investor or a very more advanced investor I always say this there is something for you in this video no matter where you are in the Spectrum and as you see in this video the information becomes more and more important and much more valuable so stick with me the entire time we're going to go over these things analyst estimates so let's check out Tesla right now so Tesla is still a car company okay it's a car company 850 billion dollar market cap one thing I always talk about price of sales ratio of nine that means for every dollar of Revenue they have you got to pay nine dollars for it the average car company is 0.5 to 1. now of course a lot of people out there are saying Paul it's not a car company guys I believe last time I checked 87 of its Revenue came from cars but one of the big pieces of news that they recently used to to upgrade Tesla over at Morgan Stanley or someplace was their super computer okay great they very well could become a software business but until then looks like a duck cracks like a duck walks like a duck must be a duck guys its Revenue comes from cars they just sold their 5 millionth car it's cars tell me how much of this 94 billion is revenue it's cars it's a car company even if they make software for their cars unless you show me how they're selling that software to other users out there as an extra with high high gross margins and that software is overtaking their car Revenue it's a car company that's it the other day it's a car company so it's currently selling for 70 times earnings and 180 times its last five years earnings it's price to free cash flow is even worse 138 times last year's free cash flow and 240 times it's five years free cash flow all right five year return on message to Capital eight point seven percent typically card companies are very low this means this is the return they get they get for the money they invest in the business so the goal would be if they can add more money to that invest more money in the business they can really boost up their profit here's one positive the last year was 13.9 percent but guys look at this gross profit margin 21.5 do you know what software companies have 50 to 80 gross margin does this look like a software company to you guys stop telling yourself something just to make you feel better it's not a software software company it is a car company these are good margins for car companies but it's a car company and last quarter saw a drop in this gross margin to 18.4 percent so let's go take a look at some of the um comments in our community for Tesla so I'm gonna go pull up the Tesla chat boom oh boy there's a lot oh boy there's a lot bear it's a car company and still overvalued but who cares stocks only go up bro thank you Dan for saying that I like that one I gotta like that comment all right um buying volume was quite High the last couple days yeah it's been surging um full everything money has done 69 videos on it bear it's Jeremy Paul's best friend's biggest position Jeremy from Financial education that's funny all right bull case bull case Elon bare case everything else okay guys let's go find some uh real ones uh so Roger wrote when to look at their latest 10K the four latest filings was selling shares three of them in September I'm out so he's saying they're issuing more shares he doesn't like dilution I don't blame you Roger to me that's the company saying geez we are really overpriced let's just keep giving shares out to people we can get cash that way instead of taking on debt Wicked Willie our in-house analysts full cases Tesla Model y and three were the two best-selling EVS in the world year to date awesome oh yeah this is the one Morgan Stanley estimates the new Dojo supercomputer could add as much as 600 billion a Tesla market cap SEC and EV growth expected to grow in a keger 21.7 through 2030 that's going to very much help Tesla says the leader in EVS but don't get me wrong other companies are still making EVS I have an EV that's not Tesla and I love it is Tesla market leader yes absolutely and I think that's going to be the case for a while well at what price is that reasonable okay some bear cases byd also holds five to ten best selling EVS here a date and was number one in year-to-date registered vehicles and price Wars are forcing Tesla to make significant price cuts of like 100 correct a car you could have bought that you get to buy for 105 000 last year is now 75 000 that's not small guys that's a big bear case okay let's see what else we got yep Frank the Tank you're 100 right Tesla superchargers seem to be the standard for public charging he's a hundred percent correct how does that lead to more money we'll see but that is true um Petro oh whole case American Auto's on strike that's going to help Tesla the longer and longer that UAW strike goes more and more it's going to hurt the regular Auto industry and probably help Tesla I agree with them 100 percent uh Tesla energy has a lot of room to grow that could very well be true there's solar panels Etc uh cyber truck production is very close Okay Tesla insurance and Robo taxis will be cash cows okay potentially I think Robo taxis is a big part of Kathy Woods theory on Tesla all right um let's see what else we got yeah they're going to have self-driving at the end of the year right Roger makes that joke because I think elon's been saying that for quite a few years uh let's see what else we got um so Dan says they've been promising stuff for the past three years and to me it's just blah blah okay very very fair enough uh let's see what else we got here oh wow big stuff my God value investing fanatic huge Market sharing car and EV a large moat I say I don't know if it's a large I think it could be a large moat value investing fnatic I don't think it's necessarily a large moat yet it could be a decent mode the car industry in general is very hard to have a mode in I'd argue Ferrari is one of the few carnistries remote um attractive car for the for the buy for the general public you're 100 correct long runway for sustainability good stuff bear case they have to sell more cars than have sold each year by all car companies combined to justify the current valuation listen to that right there because I think he's spot on to justify today's valuation we'll get into that shortly they have to sell more cars and all of their car companies combined I don't know if that's exactly true but they basically have to be the number one car manufacturer to do it I don't know if it's all car companies combined that's a big number um they prefer financing for shareholders rather than debt that means issuing shares yeah so value investing fanatic I'm just giving it to you these are great comments I'm gonna give you a shirt uh we can put the shirts up for the video somebody put the shirts up email us value investing fanatic tag me or tag somebody Nick in the chat or email help at everythingmoney and put the request in for what shirt you want so thanks very much so guys great comments still more to go oh this is funny in the seam I only got on Twitter to follow you but Twitter keeps asking me to follow Elon here's what I did with that and he blocked Elon that's funny that's really funny oh my gosh all right so that's a lot of stuff from our community members on um Tesla Bull and Bear cases so I like that a lot let's see what and let's see what the eight pillars look like oh boy four checks four X's hmm this one bothers me immensely this does this bothers me this does not bother me this bothers me Love This Love This Love This Love This so really there are three things that bother me here issuing a lot of shares and valuation remember guys you could have a great something it doesn't mean you should pay whatever price for it that's what's happening with a lot of companies lately but the Market's been going up and up and up so people feel like oh it works but eventually it doesn't work anymore Tesla hit an all-time high of 414. I'm gonna go on a limb I've said this in other videos I think we're gonna wake up 10 years from now and it would not have surpassed that 4 14. I think it'll be lower than that 414 price I don't know where it's going to end up but I've seen that happen so many times in history when super hype companies take decades sometimes to rebound even Microsoft a company that's at amazing highs it took 15 years before it hit all-time high after its 2000 2001 High 15 years 15 years that could be the case here with Tesla so what are analysts saying about Tesla well let's see expected to make 3.49 a share this year going to 766 so over doubling in the next four years that's big growth guys that's awesome revenue of 101 billion expected this year going to 230 in the next four years huge major growth potential but these guys are biased the Market's hyped about Tesla so they've got to have the hype with it look at this the lowest estimate for Revenue growth is 151. in four years that would be 50 higher than today not as big a growth but the highest estimates 382. Jesus guys it's all over the board so our last question what price to pay for the company that's why we have stock analyzer tool but before I get into that guys really exciting news so you're the type of person watching this video and if you've watched other videos of ours it shows you clearly have an interest in investing in finance this is exactly why we built this community and the software attached to it was for people like you one of our most active users in our community of thousands of users wrote me an email and said that he thought we were missing out on a lot of great community members like him he bought the software only after we did the seven dollars for seven days intro he said listen I wasn't going to pay 30 or 40 bucks a month unless I really found the value in it once he tried the seven dollars for seven days he goes I was hooked and I knew that 30 or 40 bucks was a steal he went one step further he said to me Paul give it away for free full access seven days I feel get a lot more users who are going to realize the value of it I was like okay not bad we're growing fine but of course I want to see more growth here and I want to see bigger growth in the community so that's what we're doing now guys seven days fully free all the tools here everything in fact guys I'm so serious about fully free we programmed it where you can't even give us money until your free trial is up in order to buy the software I want you to try it out for free I want to make sure it's right for you sign up all you have to do is give an email you don't have to give a credit card number nothing you don't give any of that until the very end of the free trial get in get engaged use the software talk in the community I guarantee you'll have immense value for it and my guarantee is if you don't like it fine by me but go for it I think you'll absolutely love it it'll change the way you look at investing just like it did this guy so again no credit card seven days for free so let's pull up my history on Tesla and see what I I did it back on August 21st so about a month ago here are my assumptions I did a 10-year analysis and my Revenue growth assumptions to start were 12 18 and 24 so just to take it a step further let's see what that takes to revenue so at 12 a year for 10 years and 100 million dollars in Revenue today it takes it to 310 billion dollars in Revenue in 10 years okay seems reasonable now 24 percent for 10 years takes it to 860 billion dollars in Revenue in 10 years a lot higher let's say 860 billion I'm going to go do this divided by and let's say in 10 years they're selling 10 15 million cars which is a lot of cars a lot of new cars at 57 000 per car and you've seen their price decrease and remember if you have 15 million cars let's put it this way let's look at a company like largest car manufacturer by units Toyota sold 10 and a half million units back in 2022. 10 and a half million units what was their revenue on US 20 those 10 and a half million units so we'll go to their income statement we'll go to annual 2022 200 12 billion so 212 billion and I'll explain this and I'm done the average price was 20 000 238. if I take their revenue divided by the number of units 20 000 238 to still telling ten and a half now it's 10 years from now let's say this Grows by four percent a year 1.04 to the power of 10 times 20 400 30 196. so for Tesla to get 900 billion in revenue on 15 million car units that's an average of 57 000. you might say to me well Paul there's other there's other Revenue you're right but Toyota currently does 20 20 000 a year it would go to 30 000 with three and a half percent four percent increase per year in the cars of the car it's gonna be my whole point about saying this it's gonna be tough that's all I'm trying to save from this doesn't mean it's not gonna happen but you've got to keep that in perspective when you make your assumptions about the future for these car Visa companies is it even realistic but I'm okay with that I'll put it as my high number now profit margin profit margin's getting better 6.4 percent of the last 10 years 9.3 percent less Five Thirteen percent last year but it's a car company I did five eight and twelve percent now I'm gonna go a little bit different I'm gonna call it 5 10 and 15 percent free cash flow I'm gonna do the exact same thing now you might say well Paul they did three okay great but guys it's still a card company and making 15 a car company is very very difficult as an example let me pull up Toyota Toyota's bottom line profit margin is 7.7 Honda 4.9 uh Volkswagen actually let's just go forward Motor Company 2.5 Ferrari they've got the highest profit margin about 19 and a half percent so this would take Tesla to almost the level of Ferrari on the high end keep that in mind now for PE what's not the PE today what's the PE it'll sell for in 10 years now if you're like meet Kevin who is I know how to put this politely a and he thinks that just because something was at a 200 PE making it 70 makes it a discount no start at 15. that's the market average go up for moat roic and growth potential and go down for the opposite but it's at the end of 10 years after they've already grown a ton more so the next 10 years you see are gonna be gangbuster growth apart from being a high moat your growth is already done it becomes the number one car manufacturer in the world based on these numbers essentially right not these numbers but these two yeah okay so where is it now where is it gonna be then I put 18 21 and 24 which is still a premium for a car company all right now for desired annual return you can get nine or ten percent from investing in a low-cost ETF and following the market over long periods of time so what return do you want to buy an individual company the more risks and the higher you make your assumptions you need a higher desired return so I put 11 14 and 17. I actually want to increase it just a little bit 12 and a half and 17. because guys 18 Revenue growth it can be hard yeah you're gonna look at this and say well Paulie did 50 yeah but they were a lot smaller could this still happen absolutely but remember investing is about making decisions it's basically betting and we're the where's the betting in your favor if the market was pricing Tesla like it wasn't going to grow at all I'd be all in favor of probably buying I'd be like oh my God the Market's pricing this like it's not going to grow for 10 years absolutely it's going to grow remember a good thing can be a bad investment at the wrong price that's the difference between investors and speculators investors know that there's a price that's too high to pay speculators just hear the story and as our friend Professor Oswald says a story without numbers is just a fairy tale so combine the story and the numbers the story on Tesla is phenomenal the question is can the numbers justify it so guys remember I'm hit the analyze button just stay with me one or two minutes longer but you get access to all of this with our with our trial the link below everythingmoney.com sign up seven days for free full access I hit the analyze button the stock is currently at 265. I have a low price ready for this one of 37 a high price of 223 and a middle price of 105. guys even the highest of assumptions still not justified and that assumes all this assumes they don't issue any more shares they issue more shares you're being diluted even further this price is going to go down and down and down so guys I'm waiting on Tesla I don't know where I'm gonna wait for it but probably until it falls to really stupid low levels where I can make an assessment because it's still the car business and it's still difficult thank you very much for your time guys I'll see in the community when you say hi take care [Music]
