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Prepare for the Tesla Rug Pull | Tesla Earnings Preview.

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0:00

yes I will be covering Tesla earnings

0:01

live tomorrow click the description or

0:04

the link in the pin comment down below

0:05

to set your reminder for the live stream

0:08

Tesla stock could absolutely Crash and

0:10

Burn tomorrow and fall

0:12

177% down to its next FIB retracement

0:15

there are two very important things that

0:17

could prevent this from happening in

0:19

this video we are going to discuss

0:21

whether it's time for tomorrow morning

0:22

you to panic cell Tesla or for you to

0:26

evaluate and go hm I know what's going

0:29

on with Tesla and I'm okay with it let's

0:32

do some analysis as well as some price

0:34

projections all in this video okay first

0:37

things first right now Tesla star sits

0:40

at a close of

0:41

$29 our next FIB retracement is$ 175 and

0:45

we literally have no support below us

0:48

for the next 16 to 17% this is a very

0:51

horrible place for a stock to be on a

0:53

technical basis we are in a tactical

0:56

downtrend we could see the wedge pattern

0:59

that's been formed

1:00

here it it's not great we can see we

1:02

have no support from the 100 day the 200

1:05

day we are literally below the

1:07

resistance of the 221 but we're not even

1:09

close to it we're not even trying 221 in

1:12

the trading days leading into earnings

1:15

so we've got issues this is not great

1:18

the floor is wide open for Tesla to

1:21

plummet now what do I expect well what I

1:23

expect

1:25

is two very important metrics to be

1:28

front and center for tomorrow anytime we

1:31

get an annual Q4 report from Tesla we

1:34

get something very impressive known as

1:38

the production and delivery forecast and

1:41

this is going to be critical because

1:42

there are some estimates circulating

1:44

online from people who have

1:46

traditionally been relative Tesla Bulls

1:49

who are suggesting that Tesla might

1:51

announce only a one uh 2.1 rather to 2.2

1:56

million vehicle delivery Target for 2024

2:00

keep in mind what we're looking for at

2:02

minimum is

2:05

2.36 why because that would represent

2:07

about 30% vehicle growth but that would

2:10

still be a disappointment from the good

2:12

old 50% Target that clearly isn't going

2:17

so well anymore so consider the

2:20

standards if we get a number under

2:23

2366 we'll probably have a

2:26

disappointment because we want earnings

2:28

per share growth now just because we

2:31

miss on the Topline forecast of 30%

2:35

growth doesn't mean we can't hit 30%

2:38

growth on earnings per share because we

2:40

could see cost declines come in the

2:42

benefits of stable Supply chains

2:44

although we've got issues in the redc

2:46

shutting down Tesla Berlin right now

2:48

which isn't exactly a nice way to

2:50

reiterate that Supply chains are getting

2:51

better when they're literally getting

2:52

worse given that Tesla's going to be

2:54

shut down for 2 weeks in Berlin that's

2:57

that's not good that's not the direction

2:58

we want to go but anyway yes yes there

3:01

is a way that you can deliver less than

3:04

a 30% increase in vehicle deliveries and

3:07

still get your 30% EPS bump earnings per

3:10

share right that's important pay

3:13

attention to that we want 30% on EPS

3:15

right now the Wall Street consensus for

3:18

the next four years is that Tesla will

3:20

grow its earnings per share by

3:24

31% now why is that so important well

3:27

it's so important because if you look at

3:29

a Tesla PE ratio right now it sits at

3:32

about

3:33

67.6 for this year okay that's that's

3:37

for Q4 income here so it's not a forward

3:40

PE it's the current PE so if we divide

3:42

that by 31 we know that this company is

3:45

trading for a PEG ratio of about

3:49

2.18 which is probably a reasonable

3:53

valuation although you get companies

3:55

like apple that might be trading just

3:57

above 3% you get companies like Costco

3:59

or or not 3% three times on a PEG ratio

4:01

you get companies like Costco that are

4:03

trading above a 4 PE ratio and then you

4:06

have companies like Nas or Alibaba that

4:09

are trading much closer to a onepeg

4:11

usually the closer you are to one the

4:13

better in the case of Tesla what we're

4:16

optimistically hoping for is actually a

4:19

production Target closer to 50% okay

4:23

well take our vehicle uh deliveries from

4:26

last year just over 1.8 multip and Buy

4:30

1.5 to get 50% growth we're at 2.7

4:33

million Vehicles what's going to be

4:36

realistic this is important this guide

4:39

matters Tesla has been relatively

4:41

accurate with how many vehicles they end

4:43

up delivering when they make their

4:45

forecast at the beginning of the year so

4:47

beginning of every year they make their

4:48

forecast and quite frankly they've been

4:51

saying 1.8 1.9 maybe but it'll be a

4:54

stretch all of 2023 and they ended up

4:57

spoton 1.82 okay great so this is a

5:02

metric that delivery production delivery

5:05

and production estimate is going to be

5:07

something the market relies on the

5:08

market looks and says okay if you think

5:10

you're only going to deliver 2.1 million

5:12

Vehicles okay well 2.1 divided by 1.82

5:16

uh-oh that would only be 15.3% growth

5:19

how the hell are you going to grow EPS

5:21

by 30% probably not valuation collapses

5:24

boom stock goes

5:26

175 be a problem do we think it actually

5:29

has the potential of going all the way

5:30

back to its floor at the end of December

5:32

when the world was ending in 2022 at 101

5:36

unlikely something would have to

5:38

substantially collapse at that level

5:40

because quite frankly uh at

5:42

175 you are looking at a company that's

5:46

trading for about

5:48

57 uh times on a PE basis basis divide

5:52

that by uh 30 well then you'd be at

5:54

about a one n Peg under two yeah you

5:57

know okay could it trade there yeah it

6:00

could we don't want to see that

6:02

happening especially if then we

6:04

unfortunately go in and start revising

6:06

down EPS growth targets to say

6:08

20% okay well now you're knocking on the

6:10

door of a three peg at 175 not good so

6:13

like the $175 Target for

6:16

Tesla it's within range but it's all

6:19

going to in my opinion come down to two

6:21

things number one production and

6:22

delivery estimates we're going to talk

6:23

two in just a moment what do I actually

6:26

hope that they announce and what does

6:29

Wall Street expect that they're going to

6:31

announce and what do other people expect

6:33

well my opinion and and this is

6:35

completely my opinion okay so again this

6:39

could be wrong but I think we're going

6:41

to go for a 25 okay where does 25 puts

6:44

us put us well 2.5 divided by 1.82 puts

6:48

us at

6:49

37% that would be great if we could get

6:53

above 24 25 ideally my my target is 25

6:58

we're looking 30 7% Topline can that

7:01

reiterate that 31% 4-year Wall Street

7:04

expectation for EPS growth yes

7:07

absolutely now what is Wall Street

7:09

currently expecting Tesla to actually

7:13

deliver I hate to say it it's not a good

7:16

number wall Street's current expectation

7:20

for

7:20

2024 and I don't love this number at all

7:24

is

7:25

2.87 million Vehicles that's only growth

7:28

of 20

7:30

1% that's bad that would not be good is

7:34

it possible we're going to get a bad

7:35

number like that yes could that number

7:38

even though I know know that's

7:39

expectation you're still going to get

7:41

rewriting okay could that

7:43

number push us to 175 on the stock yes

7:47

now there is sort of a a hedge to this

7:51

and it's the idea that a lot of people

7:53

have seen this estimate and may have

7:55

sold the stock down the last time we had

7:57

a failed breakout we had a failed

7:59

breakout right here at the intersection

8:01

of the downtrend and the 258 FIP the

8:03

failed breakout created this

8:05

approximately 20% draw down on Tesla

8:08

stock really obvious from a technical

8:10

point of view that the trigger to sell

8:13

was there and it makes sense as you're

8:16

going into earnings you tend to get

8:19

selling after earnings you frequently

8:22

also get selling okay look at the

8:24

earnings for Q2 stock straight down

8:26

afterwards we've kind of already done

8:28

that move though so could we have more

8:31

of a Q3 2023 earnings where you go red

8:35

for a few extra days and then you have a

8:37

recovery yeah of course anything can

8:39

happen because people have to cover

8:40

their shorts there are a lot of people

8:42

who sell calls buy puts or short the

8:46

stock who are fundamentally long Tesla

8:50

but they're just bearish earnings so it

8:52

is possible you could get a bad

8:56

report you get some drama for the next

8:58

few days around around the report and

9:00

then slowly once the pain of that Q4

9:03

earnings report is over you move up

9:05

entirely possible uh but this all comes

9:08

down to your Fair Value Estimate for

9:10

Tesla which of course we'll discuss in

9:12

this video as well so the delivery

9:15

estimate and production estimate is

9:17

going to be a big deal I'm a little

9:19

devastated That Wall Street thinks the

9:21

growth will only be 20 uh 20.9% that's

9:24

not great other test levels have also

9:27

indicated in that direction not not

9:29

great I'm really looking forward to

9:32

please give us 37% now how can that

9:35

happen well it comes from scaling Berlin

9:37

and gigga Texas okay great but Berlin's

9:41

getting shut down for two

9:44

weeks yes yes and that sucks so if we go

9:49

and look at how many vehicles are being

9:51

delivered at each facility you could

9:53

jump in here you've got an annual

9:55

capacity of 375,000 vehicles 37 5,000

9:59

Vehicles as of the end of last year

10:01

divided by uh 52 to get a weekly figure

10:04

is 7,211 Vehicles times a 2E shutdown

10:08

it's a 14,000 vehicle impact is a 14,000

10:12

vehicle impact for 2 weeks really going

10:14

to make a massive difference no and

10:17

that's why I'm hoping that Wall Street

10:18

is actually a little too bearish on the

10:20

Red Sea drama because the realistic

10:23

Outlook in my opinion is the Red Sea

10:25

drama can go on and Tesla doesn't have

10:27

to continuously get hurt

10:29

why is that because you reroute your

10:32

shipments from China around the coast of

10:34

Africa to get where you got to get to

10:36

Germany okay the issue is you're going

10:38

to have this window where as you start

10:40

rerouting ships the longer way the way

10:43

that takes about 30 to 40% longer

10:45

there'll be this initial lag but once

10:48

you have all your ships on that

10:50

route well yeah you should be able to

10:54

have enough flow of components not to

10:57

continue to have that delay over and

10:58

over and over over again hopefully and

11:00

this is what I'm looking for tomorrow

11:02

Tesla announces that this is expected to

11:03

be a one-time delay that a new shipping

11:07

contract or whatever has been

11:08

established to prevent any Red Sea drama

11:10

from continuously affecting their supply

11:12

chain issues for Berlin if they make

11:15

that announcement the stock should do

11:18

better because it would help their

11:21

ability to estimate a higher production

11:22

number also go up okay now where else do

11:26

we sit where else can we actually get

11:27

growth from well we don't think we're

11:29

going to get growth from 950,000 uh

11:31

Vehicles being produced at Shanghai we

11:33

don't really expect that number to grow

11:35

much uh we don't think we're going to

11:37

get much uh production expansion from

11:40

California which is 650,000 Vehicles

11:44

well that puts you at about 1.6 million

11:46

Vehicles right now right the capacity

11:49

listed here though if I add together 375

11:53

and I'm going to take off the 14,000 in

11:54

a moment and I throw in Texas of let's

11:59

go 250,000 for the non-cyber TRU portion

12:03

if I throw that number those numbers in

12:05

no cybertruck production I'm sitting at

12:08

2.2 million if I go take out that 14,000

12:12

for the supply chain issue I'm at 2.2

12:14

2.2 oneish million Vehicles delivered

12:17

which basically means zero growth

12:20

expectations Beyond what's listed here

12:23

for Berlin Texas and zero for the Cyber

12:27

truck okay so what can we add in all

12:30

right fine let's add some stuff in here

12:32

let's say Texas model y production

12:37

pops 75,000 okay let's throw 75,000 in

12:41

now let's throw in 50,000 for year one

12:46

cybertruck deliveries okay so year one

12:48

cybertruck deliveries we're going to

12:50

throw that in uh at by the way Wall

12:53

Street is expecting 63,000 so I don't

12:55

think I'm terribly off on that 50,000

12:58

let's throw that off

12:59

uh then what we're going to do is we're

13:01

going to bump Berlin we already took off

13:04

the two-e pain and and I know they don't

13:06

have the upper carrot here for for more

13:08

growth but they should be able to get to

13:11

500k next year I'm going to only

13:14

add 100,000 though as opposed to a full

13:18

125,000 so let's add 100K to Berlin

13:21

Maybe I'm Wrong here but that gets us to

13:23

about

13:26

2.43 so that that would require growth

13:30

at Texas

13:33

Berlin and maybe a little bit of growth

13:36

at California and Shanghai to make up

13:38

the difference to actually get to my

13:39

target so my Target's a little

13:43

optimistic okay so let's write this down

13:45

Kevin's optimistic goal uh and again

13:49

this is based on uh which includes we'll

13:52

write a growth at Texas uh

13:56

Berlin and slight growth in California

14:00

and uh Shanghai okay that's just slight

14:03

growth we we don't need too much there

14:05

so what do we get optimistic goal is

14:08

2.5 that's

14:11

37% if we just stick with the numbers we

14:13

just calculated which would be 2.43 243

14:16

divided by

14:18

1.82 we'd be about 33% growth I'd be

14:21

okay with that as well so let's write

14:25

that down as the optimistic goal 2 4 33

14:29

to 25 we'll write that okay Wall Street

14:34

is sitting at

14:35

2.1 which is not great again we already

14:38

know two 2.87 to be exact uh and then I

14:42

would probably say Kevin's realistic

14:45

Kevin's realistic estimate is probably

14:47

in that 23 to 2.4 range if I was Elon

14:50

I'd probably be leaning 23 to

14:53

24 and so we're going to be off 50%

14:56

compound at anual growth because we

14:57

don't have the next gig of Factory up

14:59

right unless for some reason we could

15:01

scale cybertruck more and actually

15:03

rather than just writing in 63,000 or

15:04

50k scale that up to 125 who knows

15:08

cybertruck may maybe could be a game

15:11

changer but this is also going to be

15:13

tough because remember what Elon told us

15:15

don't rely on the Cyber truck to

15:17

positively contribute to margin for a

15:19

while in other words it's going to be a

15:20

loss leader oh at least until they get

15:22

to scale so you can kind of see the

15:26

optimistic estimates are a little hard

15:30

to

15:31

support uh it's tough it's tough right

15:33

now so you're probably in this range

15:35

right here again 21 22 not great 23 24

15:41

acceptable because it could support that

15:43

30% EPS growth okay what's the next

15:46

thing that matters well I mean this is

15:48

already obvious I mean of course we know

15:51

talk about version 12 FSD is going to

15:53

matter of course we know that talk about

15:56

Robotics and how Elon thinks it's going

15:58

to be the the most valuable company in

15:59

the world like of course those things

16:00

are going to have slight impacts of

16:03

course talk about dojo and and all the

16:06

other ancillary aspects of Tesla are

16:08

going to

16:10

contribute to people's emotions but are

16:13

they actually going to contribute to the

16:14

stock price no not in my opinion not now

16:18

production delivery numbers expectations

16:21

where the growth comes from like

16:23

physical hard growth large growth that's

16:27

what we need

16:29

uh okay so before I talk about the

16:31

second item something else that uh which

16:34

obviously Red Sea is built into that and

16:35

then something else before we talk about

16:37

the second item that'll move the stock

16:39

uh is elon's commentary about wanting

16:41

25% of the stock to actually continue

16:44

developing AI uh he needs to walk that

16:47

back like hardcore and I think he will

16:50

seeing Elon on his uh apologist tour for

16:55

uh the impression that people have that

16:56

he's an anti-semite which I want to be

16:58

clear I don't think he is but he's kind

16:59

of on this tour of going to you know

17:01

Israel then he goes to aitz and Poland

17:03

he's with Ben Shapiro you like it's kind

17:06

of doing the the Jewish

17:09

tour makes me think that he's very aware

17:13

of people's perception of of what his uh

17:17

standing is right he's very aware of

17:19

what people like and don't like about

17:21

him it might be why he's seems sometimes

17:23

to be relatively depressed because he

17:25

pays too much attention as to what other

17:27

people are saying about him but probably

17:29

to some extent also a good thing because

17:31

I think you're going to get an Elon that

17:32

comes into this earnings call tomorrow

17:33

that says hey look you know we we were

17:36

talking about this uncomfortability I

17:38

want to be clear I'm not threatening to

17:41

take away the AI uh from from Tesla

17:44

which is obviously a reason people are

17:46

invested in the stock you know the

17:47

potential for FSD the potential for

17:49

Optimus and all of that take rates for

17:51

FSD full stelf driving is amazing okay

17:54

I'm on version 11 I'm not on 12 yet and

17:56

it'll probably be a year before I ever

17:57

get 12 but it's okay like it's already

18:00

so freaking good does it need to be you

18:03

know driverless I mean it kind of

18:05

already feels like it is driverless but

18:07

you know you're there supervising I I

18:09

don't really think that's a big deal I

18:10

do think they should change the

18:12

structure in terms of how you sign up

18:13

for it you know 200 bucks a month or

18:15

$300 a month 100 of that goes to

18:17

principal to pay off like actually

18:19

having FSD for your car or they should

18:20

just lower the price of it quite frankly

18:23

they could also just like include it I

18:26

uh I know sometimes people hear that

18:28

it's like wait that's got to hurt margin

18:30

it all gets built into the end price but

18:33

anyway so

18:35

um look I think elon's going to

18:37

substantially walk back the AI drama and

18:40

that's going to be a positive for the

18:41

stock that is still outside the two main

18:43

things again main thing number one

18:45

production which includes Red Sea drama

18:47

main thing number two we're going to

18:48

talk about in a moment but the AI thing

18:50

he will walk it back just like he's

18:52

doing the sort of Jewish tour right now

18:54

I think he's going to do the tour of

18:57

expressing how important it is not to

19:00

let somebody evil take over artificial

19:02

intelligence because Elon of course told

19:03

us that he's not evil so of course we

19:05

should trust him uh and then you also

19:09

want

19:10

to see him reiterate that like I'm not

19:13

here to dump the stock or or whatever

19:15

like those things would be useful okay

19:19

now the second thing this is like really

19:22

obvious we already know this yeah it's

19:25

the MW because this is the year

19:26

companies are going to take it in the

19:28

mark

19:28

margin now uh the expectations for

19:31

margin mind you are are out we are

19:34

looking at uh Automotive gross margin

19:38

expectations for Q4 o and I want you to

19:41

see also or I'll tell you uh how they're

19:44

expected to evolve over the next few

19:46

years it's actually kind of an

19:47

interesting number to look at but

19:49

Automotive gross margin for

19:51

Q4 the current estimates are that we're

19:54

going to be at about

19:57

18.9 so we'll see what happens with that

20:00

uh I think we were yeah we were at

20:03

18.7 before that and the growth of

20:06

margin as rates probably start trending

20:09

down over the next few years or if we

20:11

enter a recession rapidly get cut uh

20:14

margin will probably move with interest

20:18

rates in fact you could kind of see the

20:20

lag of interest rates right here see the

20:23

first circle at the top left there that

20:26

indicates when the Federal Reserve began

20:28

raising rates and then the right Circle

20:30

shows you a year later when Tesla's

20:33

operating margin started getting whacked

20:35

this is different from vehicle gross

20:37

margin it's just a chart that Tesla has

20:39

here on operating margin uh and so even

20:42

once we start cutting rates we'll

20:43

probably have a lag of about a year

20:46

before margin really starts boosting but

20:48

the stock usually starts pricing pricing

20:50

in a margin gain 18 months beforehand so

20:53

hopefully we start pricing in that

20:56

margin gain now Mar markets uh well

20:59

after earnings that is because it's such

21:00

a Negative Catalyst people have so much

21:02

uncertainty over what's going to happen

21:03

tomorrow when you look at Automotive

21:05

gross margin you're looking at uh 18.9

21:08

expected for q1 19.3 Q2 19.9 Q4 or sorry

21:14

Q3 uh it gets up to 20.2 Q4 and as I

21:18

keep going it basically it looks like

21:20

Wall Street is pricing in margin growth

21:23

of somewhere around 30 basis points

21:27

every

21:28

so in other words it's just going to

21:30

take years for them to climb this margin

21:32

back in fact margin caps out in

21:36

20126 at

21:38

24% on wall Street's estimates that is

21:41

going to be very very important I am

21:43

worried that obviously we're going to

21:45

get some kind of margin Miss for Q4 I

21:48

want the bottom to be behind us here you

21:50

can actually see the Gap gross margin

21:52

which is calculated slightly differently

21:54

from what uh the um Wall Street

21:56

estimates are but what you can see see

21:58

is the lowest gross margin we had right

22:00

here was in the last quarter see this

22:02

consistent decline 25 2381 193 18.2 19

22:07

point or 17.9 just give me something

22:09

with a one and the eight in the front

22:11

that's it a one and eight please show us

22:14

the bottom is in uh I don't know if

22:17

we're going to get it but however much

22:19

that

22:21

misses we'll see anyway uh those are the

22:24

two biggest aspects now how does this

22:27

affect value ation for Tesla okay look

22:30

this is a part people care about right

22:31

it's like when is this freaking company

22:33

actually going to go up again it's been

22:35

3 years of this stupid stock trading

22:37

sideways now that's either a gift that

22:39

you've been given three years to go shop

22:42

for this freaking stock and buy the dip

22:44

or we're all idiots that's entirely

22:47

possible too in fact any reality is

22:50

always

22:51

possible it's just a matter of what's

22:53

probable so what do we have okay by the

22:57

end of 20

22:59

2026 this is important by the end of

23:03

2026 what do we think these vehicles are

23:06

going to sell for and how many vehicles

23:09

are we actually going to sell well my

23:13

estimate

23:14

unfortunately is high relative to what

23:17

Wall Street thinks Wall Street thinks

23:19

we're only going to get to about 3.1

23:21

million Vehicles so we're going to run

23:24

this both ways we're going to run it

23:25

with my estimate of 38 which is actually

23:27

what Wall Street thingss will happen in

23:30

2027 uh but we'll compare that to uh to

23:35

you know 3 one in uh in 2026 in just a

23:39

moment but what we're looking for is

23:42

what do we

23:44

think these vehicles are going to sell

23:46

for and what do we think we're going to

23:49

get uh uh in terms of an average selling

23:52

price well Wall Street right now

23:54

actually holds Tesla's average selling

23:56

price at roughly 4 4,000 you can see I'm

23:59

running it at 42,000 so we'll do both

24:02

analyses okay we'll come back to this

24:04

and we're going to change it to 31 with

24:06

44k we'll do that in just a moment but

24:09

let's do some analysis here remember

24:11

what we're going to do on purpose here

24:13

is while we're giving 2% to leases some

24:16

service Revenue 10% to energy I am

24:19

purposely doing zero for insurance semis

24:23

full self-driving Tesla robot third

24:25

party FSD and anything else okay I'm not

24:30

I'm literally not even giving FSD

24:32

Revenue here I'm going to just

24:34

underwrite this as a damn car company

24:37

like a Toyota okay that's what we're

24:39

going to do we're just going to

24:40

underwrite it as Toyota okay if we then

24:44

take the

24:45

2026 margin estimate and we'll take that

24:48

margin estimate from Wall Street of

24:53

22% okay that's be 80 uh sorry 78%

24:58

expense there we go 22% margin we'll do

25:01

that now and we're going to move down to

25:04

what we think the stock price might be

25:07

we would end up getting to a 324 stock

25:10

price however if we end up changing

25:14

margin to let's say sticking at 18% for

25:17

a while so we'll go 82 over here we get

25:20

to a stock price of about 250 okay I

25:23

want to be very clear about what that

25:24

means this means in 2026 the stock

25:28

basically just goes back to where it was

25:30

2 weeks ago as only a car

25:34

company with kind of crappy margins in

25:38

my opinion like your worst case scenario

25:41

is basically where it is now is that

25:43

it's just flat over the next two or

25:45

three years I I see that as the worst

25:48

case scenario now obviously we can go in

25:50

here we can adjust to uh Wall Street

25:52

numbers uh this uh this will really hurt

25:56

if you go to 4 4K but you drop these

25:59

deliveries to

26:00

31 and let's go with their margin so

26:03

we'll go with their margin you get to

26:05

about 276 notice how really her with

26:08

their numbers doesn't actually really

26:11

change the floor in my opinion for the

26:13

stock it's still like a $250 to $300

26:16

stock how did we figure that with a 1.6

26:20

PEG ratio on 30% EPS growth that is what

26:23

Wall Street is expecting okay this is

26:26

literally wall stre expectation now 30%

26:29

EPS growth totally reasonable for it to

26:31

sell for 1.6 times

26:33

Peg totally reasonable with their

26:36

numbers with uh their margin to sit uh

26:41

with with $45 $4,000 in average selling

26:43

price 3.1 million Vehicles reasonable to

26:45

sit at 276 that's crappy though right

26:48

nobody's really investing in this

26:49

company for that I'm not running an

26:51

actively managed ETF that has a massive

26:54

allocation to Tesla for that okay that's

26:58

because this is like like ignore that

27:00

this says bull here because I've

27:01

manipulated so far it's just stripping

27:03

everything Tesla out of Tesla

27:05

underwriting it like a car company with

27:07

EPS growing at 30% that's it well that's

27:10

actually not that bad because we know

27:12

Tesla is way freaking more than that

27:15

okay so now let's put some like Bull

27:18

hats on okay so we put some Bull hats on

27:21

and I don't mean no BS either I mean

27:23

some enthusiasm here okay so let's say

27:27

we can actually get margin up another 2%

27:30

something you're going to notice is 1%

27:31

margin usually operates or moves you by

27:36

about

27:37

$20 per um uh in the stock price so

27:41

every 1% margin Improvement they get on

27:43

their gross margin it's about $20 in

27:45

stock price that's why margin matters so

27:47

much but anyway let's get to uh you know

27:51

what call it call it even 2027 okay

27:54

let's go 2027 let's just be patient with

27:57

with it change it all to 2027 and we'll

28:00

leave it at 44k we'll go 3.8 honestly

28:03

I'm going to go slightly above that I'm

28:05

going to go 42 we're going to go 42

28:08

because why not it's a great number

28:09

actually no realistically I think it

28:11

should do more than 42 but Wall Street

28:14

thinks 38 I'm going to go 42 okay 42 by

28:16

the end of 2027 but now what we're going

28:19

to do is we're actually going to start

28:20

making some freaking money again from

28:22

FSD what are we going to do I want to

28:24

see

28:25

$4,000 of Revenue per vehicle how do we

28:29

do that it's really actually simple math

28:31

all you're doing is going to throw in

28:33

revenue of basically 10% of the

28:36

vehicle's price okay so multiply that

28:39

all right uh okay here average selling

28:42

price 44,000 right put the times logo in

28:45

there we go 4,400 bucks great now we

28:47

have to multiply this by how many

28:50

vehicles are delivered 4.2 million great

28:53

that could add you know just a small $18

28:55

billion uh to this company again okay

28:58

fantastic so we just added $18 billion

29:00

what are our expenses on FSD I threw

29:03

some you know refunds and credits and

29:05

whatever nominal 2% big deal basically

29:09

you're taking it down to about 4K per

29:11

vehicle as opposed to 4,400 bucks

29:14

honestly that's probably what it's worth

29:16

that's honestly probably what they

29:18

should be selling it for but and I did

29:22

this on person on purpose to see if you

29:24

would catch it do we actually think the

29:26

take rate is going to be

29:29

100% no the take rate's not going to be

29:33

100% so if the take rate's not 100% and

29:36

the take rate is actually

29:39

25% at

29:41

$4,000 we're going to drop this to 2.5

29:45

darn only gives us another 4.6 billies

29:48

that's okay though take our expenses out

29:50

what is that due to the stock $426 stock

29:54

okay FSD

29:56

4K at at a 25% take rate or 4,400 bucks

30:00

bumps the stock almost

30:03

$100 see how sensitive this stock is

30:06

going to be to actually realizing

30:09

revenue from things that matter what do

30:12

you think is going to happen to the

30:13

stock when they sell their first order

30:16

of Optimus

30:18

robots yeah okay you just saw what a

30:21

measly 25% take rate on FSD at four

30:25

grand does with $44,000 it's insane the

30:28

multiples are what are going to lead to

30:31

Euphoria for Tesla the problem is right

30:33

now nobody prices in any of the other

30:36

crap at Tesla the semis the FSD the

30:39

Tesla B the AI Cloud computer whatever

30:42

all of that the the market the street

30:45

gives no value to and I bet you every

30:48

single person watching this is like bro

30:51

those are the only Reasons I'm in this

30:53

stock because otherwise I wouldn't own a

30:55

stupid car company I

30:58

know so point is like this this is how

31:03

the stock gets Juiced okay you pump the

31:06

margin that's at 22% by the way I think

31:09

honestly if we can get back to 25%

31:11

margin let's drop this to uh 25% gross

31:14

margin would be the expense would be

31:16

about 75% so that should give us another

31:19

60 bucks right there on the stock yeah

31:20

492 that was that was about

31:23

$60 uh so uh now what else do we have is

31:27

there anything else to really be bullish

31:29

on over the next three uh well actually

31:32

it's more like four years well all of 24

31:34

all of 25 all of 26 all of 27 that's

31:37

four years four years between now and

31:39

four years I mean rates are going to be

31:41

like zero again right so that's why I

31:43

think you can prop margin up uh FSD

31:45

maybe the take rate honestly is 50% at

31:49

$4,000 I really think they got to drop

31:51

the price anyway move this to uh 5%

31:55

Watch What Happens look at that $542

31:59

stock okay I'm going to leave that at

32:01

two and a half just because I think

32:02

that's more realistic so again that's a

32:04

25% take create at $4,400 uh and uh and

32:07

realistically you start selling this

32:09

this Tesla bot um it it you're you're

32:13

basically potentially doubling the

32:16

productive value of Tesla so really it's

32:20

kind of like going in here and selling

32:23

more cars at a high margin the Tesla

32:27

bought I mean depending on what it could

32:29

do I think most companies would gladly

32:32

pay $25 to $50,000 for this so it almost

32:35

be like selling another car except it's

32:36

a little robot

32:38

right and now what okay well you

32:41

basically just go in here and you start

32:44

pricing that in what does that look like

32:45

if we doubled the number of vehicles SL

32:48

Bots assuming the same margin for robots

32:51

as as uh Vehicles well pop it up to 8.4

32:54

2027 that's Bots and and robots at a 25%

32:59

margin $1,000

33:02

stock so that's pricing in Bots okay so

33:06

you can see how you can manipulate this

33:08

I like to consider all of that the icing

33:10

on the cake so I personally don't really

33:13

like thinking about numbers like that I

33:15

guess it's entertaining because your

33:17

rate of return over four years would be

33:19

45% per year if you invest today at you

33:23

know $210 actually be about 47% per year

33:27

every single year compounded for the

33:28

next four years if you

33:29

invested uh and and this ended up

33:32

happening okay again we don't know but

33:35

once those Bots start selling the

33:37

Market's going to have to start pricing

33:38

that in and discounting that and in my

33:41

opinion it's not

33:43

down so I think you're kind of at like

33:47

one of the worst places for Tesla right

33:49

now people are very bearish on this

33:51

company from a fundamental point of view

33:54

this is like a bottoming process for

33:55

this company is it really going to

33:57

matter what they say in terms of

33:59

production deliveries whether it's 21 or

34:01

22 or 23 is it really going to matter if

34:03

the margin is 17 and a half or 18 and a

34:05

half

34:06

tomorrow over the next four years no

34:09

it's not going to matter is it going to

34:12

matter for the stock price movement over

34:14

the next few weeks yeah and nobody wants

34:16

to get margin called I I get

34:20

it

34:22

but nothing in my point of view uh and

34:27

this is just my personal point of view

34:28

it's certainly not Financial advice

34:30

nothing in my point of view says

34:31

flip-flop everything in my point of view

34:34

actually says we're on the right path

34:36

because if we go into a recession rates

34:38

cut guess who keeps buying stuff

34:41

homeowners and white collar

34:43

professionals with or bluecar

34:45

professionals who who make a lot of

34:46

money okay people with $120,000 plus

34:50

jobs okay those are the people buying

34:52

Teslas solar panels for their homes

34:54

inverters for their homes they're buying

34:56

real estate you're going to see a

34:57

massive wealth Gap so in a weird way

35:00

does a potentially uh you know rapid set

35:03

of rate Cuts via recession potentially

35:04

help a company like Tesla yes see Tesla

35:08

in my opinion is recession resilient

35:11

however it is not interest rate

35:12

resilient but recession means interest

35:15

rates plummet that's a big difference

35:17

I've always said I think Tesla's

35:18

recession resistant but we've just been

35:21

getting destroyed by rates not

35:25

recession so uh so my

35:28

positioning it sounds boring but it

35:30

continues to be the same Tesla and face

35:33

then we get our chips our nvidias amds

35:36

tsms Intel as the value chip

35:40

play and we move from there that's my

35:43

point of view I'm sticking with it hope

35:45

you appreciate this Insight I love you

35:47

all I wish you all the best of luck why

35:50

not advertise these things that you told

35:51

us here I feel like nobody else knows

35:53

about this we'll we'll try a little

35:54

advertising and see how it goes

35:56

congratulations man you have done so

35:57

much people love you people look up to

35:59

you Kevin PA there financial analyst and

36:01

YouTuber meet Kevin always great to get

36:03

your

36:04

take even though I'm a licensed

36:06

financial adviser real estate broker and

36:08

becoming a stock broker this video is

36:09

neither personalized Financial advice

36:11

nor real estate advice for you it is not

36:13

tax legal or otherwise personalized

36:15

advice tailored to you this video

36:16

provides generalized perspective

36:18

information and commentary any

36:19

thirdparty content I show should not be

36:21

deemed endorsed by me this video is not

36:23

and shall never be deemed reasonably

36:24

sufficient information for the purpose

36:26

of evaluating a security or investment

36:27

decision any links or promoted products

36:29

are either paid affiliations or products

36:31

or Services which we may benefit from I

36:33

personally operate and actively managed

36:35

ETF and hold long positions in various

36:37

Securities potentially including those

36:39

mentioned in this video however I have

36:41

no relationship to any issuers other

36:43

than house act nor am I presently acting

36:45

as a market

36:51

maker

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