Key Pointers for Tesla
Car Sales and Revenue
Tesla’s car sales in the US are on a declining trend, with sales dropping month after month. Between April and June 2024, the company managed to sell around 20,000 vehicles per month, a significant reduction of more than 50% compared to earlier months. This sharp decline in sales has had a considerable impact, as USA car sales account for 40% of Tesla’s total revenue. RED FLAG
In China, Tesla is facing increasing competition from BYD, a more affordable alternative, which is putting additional pressure on Tesla’s market share. RED FLAG
To stay competitive, Tesla has been offering discounts and reducing prices, a strategy that, while potentially boosting sales volume, could negatively impact revenue growth. RED FLAG
Tesla’s energy storage business is showing strong growth, nearly doubling in size in Q2 2024 compared to the same quarter in 2023. However, this segment currently represents only 12% of Tesla’s total revenue. There is a high probability that it could become a major revenue driver for the company in the future. GREEN FLAG
Growth Drivers
The overall increase in electric vehicle (EV) sales remains a significant opportunity, although it is accompanied by rising competition. GREEN FLAG
Tesla is also making heavy investments in artificial intelligence (AI) for its autonomous driving technology, particularly in Robo-taxis. If successfully implemented, this could trigger substantial revenue growth in the future. GREEN FLAG
Tesla is working on expanding its presence in international markets. GREEN FLAG
Further developing its energy storage business, which holds considerable potential for long-term growth. GREEN FLAG
Financial Matrics
Tesla’s gross profit margin is currently 18%.
Operating expenses are at 12%, but if one-time restructuring costs are eliminated, they are approximately 9%.
Tesla’s net income margin is 2%, which would rise to around 6% without the one-time restructuring costs.
The price-to-revenue ratio is 7x.
The price-to-profit ratio is 95x, further suggesting the current price is overvalued. RED FLAG
TESLA Stock Prediction 2025,2030,2035
***All revenue, Net income and market cap are in Millions***| Year | Revenue | Net Income | EPS | Stock Price($) |
|---|---|---|---|---|
| 2024 | 105,706 | 7,769 | 2.44 | 73 |
| 2025 | 126,847 | 9,323 | 2.92 | 88 |
| 2026 | 152,217 | 11,188 | 3.51 | 105 |
| 2027 | 182,660 | 13,426 | 4.21 | 126 |
| 2028 | 219,192 | 16,111 | 5.05 | 152 |
| 2029 | 263,030 | 19,333 | 6.06 | 182 |
| 2030 | 315,636 | 23,199 | 7.27 | 218 |
| 2031 | 378,764 | 27,839 | 8.73 | 262 |
| 2032 | 454,516 | 33,407 | 10.47 | 314 |
| 2033 | 545,420 | 40,088 | 12.57 | 377 |
| 2034 | 654,504 | 48,106 | 15.08 | 452 |
| 2035 | 785,404 | 57,727 | 18.10 | 543 |
Conclusion
While Tesla continues to show strong potential in its energy storage business and future growth drivers, its current financial metrics and valuation ratios suggest that the stock is overvalued at present levels.
With the price-to-revenue and price-to-profit ratios indicating an inflated valuation, it may be prudent to wait for a market dip before entering.
A price below $125 would present a more favorable entry point, aligning better with the underlying fundamentals and offering a greater margin of safety for investors.
