**Critical** Game Changer for Tesla Stock [Must Watch]

holy smokes we got a lot of color from

Elon Musk last week from the Tesla

earnings call earnings report and quite

frankly what we saw in the stock

movement I don't think anybody can argue

that movement was insane in fact

historically it was insane the largest

move ever in the last 10 years for Tesla

stock in just one day up 22

percent really incredible and when you

look at the numbers the numbers were

rightfully so incredible but in this

video we're going to go into detail

we're not only going to talk briefly

about what we heard from the actual

earnings and earnings calls and some of

the numbers but we're actually going to

dive into the valuation of the company

we're going to talk about what is a fair

price for the company today in 2026 in

2027 is it fair to include robotaxi or

not and what do the numbers look like if

we do include Robo taxi let's do that as

well as speculate on what are these

lower cost vehicles that are going to be

introduced in

2025 let's talk about all that in this

video but first did you know and this is

just a fun fact and it's about Tesla did

you know that in 2014 Tesla introduced

convertible bonds that paid just a

quarter of a percent per year in

interest people might ask themselves who

the heck would in invest in a

convertible bond that just paid a

quarter of a percent of Interest like

why even pay interest at all it's

because convertible bonds are actually

really amazing they give you the

opportunity to participate in an upside

with yield and you get preference in

Liquidation in fact take a look at this

Forbes article here that shows you in

2021 when this article was written these

convertible bonds converted to shares

worth

800% more

than what people invested in those

convertible bonds for so it really goes

to show that these long run bets on

Tesla they do tend to pay off so

congratulations to the people who made a

lot of money on those convertible bonds

and hopefully that continues for the

long-term future for Tesla if you

haven't heard yet though I did take

inspiration from Elon Musk and exactly

this right here we created convertible

bonds over at hous hack that's my

startup if you haven't heard of them yet

go to househ hack.com you can learn all

about them it's a 5% convertible bond

which means you get paid 5% not one

quarter of a percent you get 100% of the

stock upside with downside protection

and you get paid interest on a monthly

basis it's pretty awesome go check it

out over at house hack.com we're also

running at a Q4 annualized profit which

means everything we raise goes into what

we do best wedge deal real estate and

yes while we're no car company I think

we're a killer real estate company and

yes we use AI in our work as well you've

all seen my wedge finder and it's

awesome with that let's hit some of the

numbers okay adjusted epsb 20% this is

remarkable Tesla's not generally known

for beating and then beating by this

magnitude amazing the adjusted earnings

per share were great uh 72 cents versus

60 cents remember adjusted usually adds

back in things like stock based

compensation but still 72 cents versus

60 it's a 20% beat amazing and margins

honestly fantastic excluding credits the

market was expecting a

14.9% uh Automotive gross margin and we

ended up getting

17.1% like I'm just stumbling over those

words because it's so good now I

estimate that about 1% of that was

likely due to enabling full self-driving

on the Cyber Tru I think a lot of the

early C Iber truck adopters were

anxiously waiting for FSD and there you

probably almost have a 100% take rate on

FSD for the cybertruck early adopters

these are like your mega mega mega Tesla

fans so I would bet that about 120 basis

points uh of that beat was due to other

aspects and about 100 basis points was

because of cybertruck FSD enablement

which does mean there were still cost

improvements from battery costs coming

down or better Manu manufacturing

efficiency the cybertruck turning to

gross profit as opposed to last quarter

being uh a gross loss this is pretty

good so congratulations this is really

really good this means now a new vehicle

like the cybertruck that is so unique to

build and and so unheard of quite

frankly is actually creating a profit

for Tesla on every single vehicle that

they make from the Cyber truck that

absolutely impressive in fact in the

last quarter Tesla earnings report if

you look at my earnings video I say you

know what when you remove the Cyber

truck the Tesla margins are actually

pretty good and the reason I removed the

cybertruck is because it was still a low

uh sort of volume vehicle the fact that

it's already at gross profit and now

it's

contributive w that's freaking amazing

let's go this is really good also in the

prior reports I was a little jaded that

they weren't actually going to fully

build out this semif Factory facility

and at this point at least it looks like

they are actually walls up and prepping

out the semick factory so

congratulations Tesla these these are

very good things now not everything is

good but these so far are very good

things uh we're getting up to

50,000 h100 uh chips Nvidia chips online

by October although Elon Mak makes it

clear that we're not really compute

constrained here we're actually more and

this was sort of a humble brag

constrained by the lack of finding

problems in FSD in other words Elon was

basically like yeah we find problems so

rarely with full self driving that now

we're kind of just sitting around going

like like where is the problem for us to

solve and I'm like okay that's a pretty

pretty clutch humble brag I actually dig

it uh mega pack Factory expected to ship

mega packs in q1 2025 just to give you

perspective as to what that means laop

produces about 40 gwatt per year

Shanghai is expected to get to 20 gaw

which would be a 50% increase in the

energy business for the mega pack side

and that's phenomenal and the mega pack

and energy business makes money it is

like I mean you're talking over 30%

gross margins when I mean we used to

celebrate Tesla for having 30% gross

margins on cars during the stimulus days

they have that in the batteries it's so

amazing that it is absolutely crushing

nphase to the point where nphase is

complaining about Tesla in their

earnings calls if you read the last two

earnings calls from Tesla or sorry from

nase in both of the last two earnings

calls they are complaining about Tesla

they don't name them in the prior one

but they do in this one uh but they

reference Tesla in the prior one by

going you know and unnamed competitor

it's is bad like nface is getting smoked

by

Tesla and it kind of makes sense like if

if you're going to buy a battery would

you rather an end phase battery or a

Tesla battery like come on anybody

watching this video is like no man come

on give me the Tesla battery okay they

got the that's peee okay they got

pricing power in that aspect that's

great now obviously with pricing power

you have to also consider valuation

which we'll talk about but I have to say

this was pretty good so then we got into

some of the things where I'm like okay

so we got the good out of the way here

we get into

the okay where are you going with this

Elon so Elon forecasts 20 to 30% vehicle

growth and this is what I think is

really interesting he talks about no

$25,000 car that basically a

$25,000 nonroot taxi car will not happen

so he's officially 100% killed the

$25,000 nonroot taxi car it's over now

that exactly aligns with what Reuters

told us and everybody said was fake news

it's just fake news Reuters back at it

again or whatever but he literally says

right here yeah well we're not making it

okay so so however we want to look at it

there is no $225,000 nonroot taxi car

now is it possible that that the robo

taxi is the $25,000 car yes in fact

that's what Elon says he says the

$25,000 car is the robo taxi that is the

robo taxi now of course they do plan to

have more affordable models now this is

what I think is really interesting

because I'm thinking myself wait so if

you're not doing a $25,000 car and the

$25,000 car is just the robo taxi then

how are you going to have more

affordable models and let me show you

this in the actual earnings call so

regarding the vehicle business we are

still on track to deliver more

affordable mod models starting in the

first half of

2025 you know this is I think probably

people are wondering what they should

assume for vehicle vehicle sales growth

and at the risk of you know a rough

estimate we think it'll be 20 to 30%

blah blah blah BL blah okay we think

with our lower cost vehicles with the

Advent of autonomous something like 20

to 30% growth next year is my best case

okay all right let's unpackage this

because this is where things start

getting a little bit nuanced where you

kind of have to put your Elon hat on a

little bit and go all right what are you

saying because this the initial takeaway

is got it no $25,000 Robo taxi vehicle

but you're going to have new lower cost

cars wait did he say new lower cost cars

now forgive me for being jaded here but

I want you to read this line right here

so regarding the vehicle business we are

still on track to deliver more

affordable

models oh okay with our lower cost

vehicles with the Advent of

autonomy wait hold on a sec is it

possible then that what Elon is saying

is we're going to have the 25k Robo taxi

okay that's going to be on one side of

the equation and on the other side we're

going to have more affordable existing

models notice he did not say more

affordable new models we've already seen

Tesla vehicles lose 20% of their value

basically uh based on just new vehicle

price Cuts in uh well frankly this year

in 202 four that's a lot that's a

substantial amount of hits uh and on top

of that you've got elevated inventory

right now so when you factor in elevated

inventory 20% price Cuts some on Wall

Street call literally you're calling

Tesla right now quote the worst auto

brand in terms of resale

value because of these price cuts and

the likelihood of more price Cuts coming

a lot of folks look at this and go oh

we're just going to get a lot more price

Cuts that's what we're going to get so

now this starts making sense okay fine

then so if the more affordable models

are not new models they're just existing

models that are going to be cheaper then

if you're potentially in the market next

year for a model 3 or model y you should

potentially

expect lower prices next year now that

doesn't necessarily have to be a bad

thing for Tesla because a lot of folks

expect that Tesla is going to continue

this 30-day free trial push where every

time they have a new software update

they give you a 30-day free trial on FSD

they try to hook you into FSD and then

they try to get you to Fork over eight

grand to pay for FSD and frankly it

seems to be working because their

margins are going up and I have to give

them credit for this they are converting

people and you know me like FSD is good

I've been using FS since 2017 do I think

it's ready for full autonomy no are

there still bonehead things that happen

yes but they have been further and

farther between every single time I use

it and so I have to give credit where

it's due and congratulations like it it

is going great so I think this 20 to 30%

vehicle growth even though we didn't

really get color on where this vehicle

growth is coming from I do not think

there is a new model I actually think

it's just the existing models with lower

prices and potentially more credits from

you know whatever uh tax credits State

credits you name it so we'll see now

obviously the election could have some

impact on that we'll talk about this but

uh I do think there was a lot of

confusion around this and I think that

my thesis clears this up because Elon

also makes it very clear that the

nonroot taxi $25,000 car would be

pointless that the future is a

autonomous and frankly Elon is right

when he says you should not invest in

Tesla if you believe that autonomy is

not going to happen at Tesla in other

words the only reason to invest in Tesla

is if you actually believe Robo taxis

and full autonomy are going to happen

now I personally am of the mindset that

you don't actually need to get to full

autonomy to make Tesla extremely

profitable you just need everybody using

FSD and you need to print as many

affordable Vehicles as possible which

maybe that's what Elon is also doing

he's saying like let's just cut the

price on the three and Y as much as

possible to print as much of those

suckers as possible to get as many FSD

revenues coming in as possible in the

meantime we're just going to develop the

25k car and honestly to

that

cheers I don't really think you need a

new

model I mean don't get me wrong I'd love

a larger model but I don't think you're

going to get it I think it's all going

autonomy so don't expect a new model

from Tesla that's it any of the new

models are just solely autonomous that's

my take so uh let's uh let's touch on a

little bit more obviously he mentioned

things like energy is on fire Optimus

showed massive improvements in dexterity

movement on 1010 I thought it was

actually really funny that he said

Optimus showed massive Improvement on

dexterity movement yeah because we know

we didn't get to see autonomy on

autonomous on on robot toxy day or I

Robot day we robot day whatever what we

saw was human controlled robots and we

did see fantastic dexterity which I

covered in my live stream as well I'm

like yeah this looks really really good

it shows the function but these are all

human

controlled that should be obvious at

this point I also think the FSD Vehicles

were you know on their own version of

FSD we already know they were on hard on

on um better Hardware way overbuilt

Hardware but I think they were basically

on a pre-programmed path and this was

really like a Disney World ride which

forgive me I just came from Disney World

we we had a wonderful time by the way we

did a VIP tour and uh we did um all four

parks in a day I don't recommend that we

got all the great rides in uh but uh it

is it's a little quick dang though that

Guardians ride really solid really

really really big fan and if you haven't

seen yet not sponsored Universal uh the

new universal theme park in Orlando

Florida is opening Memorial Day and and

I already pre-order tickets to be there

like ASAP when it opens so I'm kind of

excited for that I have a big like theme

park fan but anyway uh let's let's get

into like numbers and valuations here so

this is all overall very exciting uh and

I I you know I don't know where I stand

with elon's 20 to 30% growth for next

year especially with some of the pain

that we're seeing in Europe and I think

some of that pain is going to extend to

the United States now don't get me wrong

I know Volkswagen is Legacy but

Volkswagen is echoing what Tesla is also

seeing in Europe which is a warning that

quote the car market in Europe is

stagnating and will not recover in the

foreseeable future and that there is a

worsening economic situation in Europe

and when you combine that with what I

think is coming for the United States

and really what's going on in China

outside of the stimulus that's going on

I'm not the biggest fan of the global

economy and and some of the valuations

where are but let's just actually get to

some of the sheets and numbers and

understand where valuations are so we're

going to do a few things uh the first

thing that we're going to do is uh I'm

going to show you the spreadsheet we're

going to go through this spreadsheet in

a moment but before I hit the

spreadsheet I want you to have the Wall

Street version so the Wall Street

projected next 4-year EPS growth rate is

29% now that could be low but basically

if you take earnings per share at the

end of 2024 and you look at the next

four years you have a 29% growth rate in

earnings per share projected if you look

at Tesla's current PE ratio price to

earnings ratio it's at 112 that's simply

today's price like 270 divided by you

know 240 or whatever the end of year

estimates are for

EPS so that means your PEG ratio right

now is

3.87 which is really really high based

on wall Street's projected next four

years if Tesla is a software company

I think their Fair Peg would be

2.69 which gives them a fair value today

of

$187 if they're a manufacturing company

they have a fair value today at a $ 1.69

Peg of

$159 which means yes there is a lot

being priced in now if I go to the end

of next year as a Manufacturing Company

I'm at 159 on a peg basis if I'm a

software company at the end of next year

I'm at

251 so I'm we're still pulling forward a

lot here that's based on wall Street's

numbers we're going to go into my

spreadsheets which helps solve for some

of this in a moment but that's based on

wall Street's numbers I think this is

Tesla pulling forward software like

valuations but also frankly you're

really pricing in Optimus and autonomy

and probably more energy growth than is

already being priced in and I'm putting

in a lot of energy growth in this

already so do consider that there there

is a lot of enthusiasm being priced into

this and so if you've been really really

happy with what's been going on with

Tesla lately and you want to diversify

just a little I'm not saying you have to

sell everything I'm not even making any

recommendations to you I'm not a

personal adviser for you unless of

course you hire us over at stock act.com

but if you do want to diversify consider

the 5% convertible Bond over at house

hack because you get all the upside in

the stock and you get downside

protection and you get paid 5% interest

every single year for a minimum of five

years now this video can't be a

solicitation and that offer does expire

December 13th Taylor Swift's birthday

probably coincidental but anyway go

check it out at house.com okay now let's

go through my valuation and and I want

to be clear this reconciles some of the

Wall Street problems so I'm not as much

of a bear as Wall Street is I I actually

consider myself pretty excited uh for

Tesla okay here we go $40,000 per

average vehicle selling price that's

roughly where we sit now we're going to

go with 3 million Vehicles produced this

assumes the best case of elon's best

case scenario because he said 25 to 30%

for the next 2 years compounded so that

gets us from about 1.9 million vehicles

to about 3 million Vehicles not

including any Robo taxi vehicles in this

estimate I will in the 2027 estimate I

uh include at $18 billion for energy

keep in mind right now on energy we at

about 2.3 billion per quarter so sits

about 9.2 per year annualized that sits

about uh 18 would be about a double in

two years okay very very generous I feel

like on energy and that that's high

margin very high margin on energy I'm

going to go with 18% vehicle margin I

think that's generous because I do think

we're going to see higher FSD I do think

we'll see probably stable energy credits

worst case a little lower uh but I do

think that uh prices will come down so I

think 18% you know we're around 177% X

credits now 20% with credits I think 18%

is reasonable 31% gross margin on energy

let's assume they keep that Services

leases these are nominal I'm including

FSD Revenue in vehicle over here so I've

moved that up here no Robo taxi income

or or Fleet income or anything like that

Opex leave it at 6% okay fantastic so

this brings me to almost $5 of eps which

is about 80 cents more than wall stre

estimates for 2026 so my price targets

are going to be higher than where Wall

Street sits so with uh for an auto

business with my earnings per share at

the end of 2026 I put this at a $248

stock well since the price of the stock

today is about 270 that does give you

over the next 2 years a about NE -4%

compounded annual rate of return of

invested return obviously not great it

basically means you full fully priced in

through the end of 2026 however if you

don't give them a 50p ratio which is

basically taking the growth rate of 29%

time

1.69 which gets you to 50 PE that's for

automotive and Manufacturing uh if you

go with the software side which is

taking a 2.69 PEG ratio multiplying it

by their growth rate of 29% you get to

78 times multiple if I change this to a

78 times multiple you get to 388 that's

where the money is look at that

19.9% growth compounded over the next

two years with a price target of

388 that's actually pretty sexy that's

pretty good now I personally would put

my you know my base case at more of a of

a 50 and I'd rather buy it at a discount

to that now no guarantees we're going to

get that but there is a chance that in

the face of regulatory Turles or any

kind of Hiccup or some kind of

recessionary fear or shock there is a

case where you do get a sub 200 shot at

Tesla again and that's where you're

going to start building in your margin

of safety now no guarantees that that

could happen but that's where you build

in your margin of safety in fact maybe

even sub 150 now again I know this

sounds crazy and I'm not saying this is

going to happen but I what I want you to

see is let's assume no vehicle growth

for a moment kill the vehicle growth

because there's a session or whatever

and leave the energy grow growth in some

of the other factors but now all of a

sudden if I go 150 and I assume

Automotive margins well 150 still gives

me 10% growth in the worst case scenario

over 25 and 26 assuming we stay flat

with vehicle deliveries so that's really

where you want to be uh I if you really

want to be more recessionary bare case

right okay now let's go 2027 now this is

fun so I reduced

the revenue per vehicle to 35,000 here

and that's because you introduce the

robo taxi vehicle which they then sell

to Consumers rather than running as a

fleet themselves it's easier to run the

math this way I go with a $25,000 car I

leave margins the same however I do

reduce the revenue per vehicle because

we have a $25,000 car I assume 1 million

Vehicles by the end of 2027 this could

be 2 million but I'm going to go with 1

million this assumes regulatory approv

as well and I give a little bit more of

a boost to energy as well I bump it to

20 billion okay same margins over here

18% 31% on energy uh operating expense

goes up a little as is natural with

higher income uh and so what I get over

here is

$5.7 of eps for the end of 27 at a 50

for automotive margins I get this stock

to about

287 which doesn't give you much upside

from where we sit today you really have

to price this company as a software

company to get upside from today if I

pump this to 78 uh that's when you get

to the 450 price Target there's that 18

19% compounded annual uh rate of return

continuing for another year so again to

really see the substantial upside from

here you have to price the company as a

software company you have to assume

Perfection and execution and that

regulatory approval I do think think

those things are risky because I don't

think we're going to get that regulatory

approval as quickly as a lot of folks

are hoping and I do think we still face

substantial recessionary risks and so I

personally think the valuation is on the

high side right now and again I'm

looking for more of a manufacturer's PE

ratio which if I go into a recessionary

mode here let me go ahead and pull off

the uh I'm going to go flat on the

regular vehicle growth so I'm going to

go 3 million drop that here to three for

more of a recessionary model I'm going

to go with 50 for 2027 I really want to

be sub 230 for my 27 model so

recessionary case for 2026 I want to be

sub 150 for 2027 I want to be sub 200

non recessionary best case scenario Elon

growth mode uh I on the automotive side

hey you know I want to be certainly sub

230

and uh over here on this spreadsheet if

I again I go back to that 3 million in

growth over here I want to be on the

automotive side ideally under uh the

future value here of 248 where I'm

actually getting a return so probably

closer to 200 uh again excellent

excellent work here in Tesla they've

done some great work in selling the

vision of the future of autonomy you

really have to believe that the future

is autonomous to go all in here and

Future's pretty good I have to say I

think they are on the right track like

there will be autonomous vehicles in the

future the question is are they going to

be in 2026 and 7 or are they going to be

in 2030 or 2035 I don't know I bought a

Tesla in 2017 and it's been 7 years and

we're we're still not full self-driving

right we are way closer than we were in

2017 but if we were 85% of the way there

in 2017 maybe we're 98% of the way there

it shows you the vast slowness I mean

even elon's now saying it's hard to kind

of keep training the model because we're

running out of issues to solve but we're

still not fully autonomous so on one

hand it's sort of like we're close but

on the other hand it's kind of like n

but we're not so it's interesting

because the edge cases those are the be

going to be the ones you have to perfect

to really get the regulatory approvals

uh so we'll see but anyway I have to say

overall very very impressive uh Elon it

was a great call it was a great vision

that was painted on 1010 it was a great

great demonstration uh I I know the

robots were remotely controlled and I

know the cars are I believe the cars are

on their own sort of new you know

pre-programed software that's fine the

vision was beautiful and that's what's

being priced in the stock right now I

also think there was a massive short

squeeze and they might pull it off

frankly if anybody's going to pull it

off I think Tesla will pull it off

anyway thank you so much for watching

this video I'm going to add a quick note

here on house hack just keep in mind yes

house hack it's not a car company so

while I compare to Tesla's convertable

Bonds in 2014 that paid a quarter of a

percent in interest and yes we're paying

25% sorry we're paying 5% over 5 years

that would be 25% not compounded right

uh but we're paying 5% per year think

about it this way we're a company that

buys homes we renovate them we rent them

out and then after we've held them for a

few years and we get to where we can

exchange them to avoid paying taxes we

could flip them flip them on the open

market flip them to

institutionalsales

we're real estate brokerage on top of

that and basically we Milk Money by not

paying taxes so consider that

uh uh for our model for house act that's

the really quick elevator pitch and if

you're interested in investing in that

upside or if you have questions email us

at IR house.com otherwise consider that

5% convertible at house act.com we've

got a non accredited round coming as

well soon so stay tuned for that that's

probably still about 60 days out maybe

closer to 90 days out it's in attorney

and SEC World we're working on it I I

don't want to forget about the non-

accredit investors as well thanks so

much for watching this video I'm glad to

be back and we'll see you the next one

goodbye and good luck why not advertise

these things that you told us here I

feel like nobody else knows about this

we'll we'll try a little advertising and

see how it Go congratulations man you

have done so much people love you people

look up to you Kevin PA there financial

analyst and YouTuber meet Kevin always

great to get your take