yikes... Tesla Stock to $91... [TSLA]

well Tesla's price cutting ended up

hurting

Tesla and their earnings actually went

negative year over year which is

absolutely horrible because if you're

trying to calculate an average 30

percent growth for EPS for Tesla

you're screwed if earnings stay negative

now

there's obviously still hope that maybe

EPS at the end of the year can be

positive and hopefully in excess of 30

but the margin hit that Tesla token q1

is painful and the reality is Elon Musk

made it really clear he doesn't really

care if they make any money or not on

these cars right now they just want to

make them and get them off the shelf

because essentially they take more EV

market share but this has led Goldman

Sachs to agree that yes Tesla is taking

more EV market share but unfortunately

Goldman Sachs response is a lower price

target for Tesla unfortunately PP is

shrinking faster than a skier without

pants on

in a blizzard unfortunately pricing

power is waning and Tesla's a once

believed super strong margins while

still best relatively in the industry

just starts starting to get a little

soft and nobody likes the soft PP

because we all invest for big peepee

massive pricing power but unfortunately

Goldman Sachs believes that is starting

to slightly Wane Goldman Sachs projects

a 185 dollar 12-month price target for

Tesla which basically gives you a

nominal upside for the rest of the year

they reiterate some of what we heard in

earnings yesterday but they see massive

costs ahead including the new Factory

ramps the Northeast Mexico obviously

outside of Shanghai we're going to have

a new facility the 4680 facility uh well

that's the mega pack facility outside of

Shanghai along with ramping Berlin and

Austin we've got lost a lot of costs

ahead and a massive free cash flow

missed by Tesla wasn't expected by many

I think I was one of the views warning

that we could have a massive free cash

flow Miss but it wasn't just that it was

also the margin miss that really hurt

now Goldman Sachs does promote Tesla

suggesting hey their energy storage

business could actually do really well

especially since they've got the

software to really position their energy

storage business well however their

their demand elasticity seems to be

fading in other words yeah they're able

to improve Demand by cutting prices but

the problem with that is they're hitting

their margins pretty heavily now we

could look at again some of the

potential upsides and this is where I

actually wrote over here that in q1 one

of the upsides is Tesla took some

one-time non-recurring warranty

adjustments and service adjustments

some issues that they say they no longer

face however keep in mind they did tell

us that margin shouldn't fall under 20

percent they told us that in Q4 and what

did we get we got 19.3 margin so we got

clickbait but another thing that I

noticed that Tesla did not do uh very

clearly or at least they didn't clearly

outline it in q1 is they did not break

down their FSD beta revenue and it's

possible based on what we heard in

commentary from the earnings call that

they didn't actually take FSD beta

recognition as Elon Musk described FSD

is basically taking two steps forward

one step back no Revenue recognition

here means that in the future they could

really end up potentially pumping Tesla

by taking that Revenue recognition and

getting back to EPS growth now it does

make you scratch your head because once

again Kimball musk killed it with the

timing of his sales it seems like

Kimball musk is honestly better then

Nancy Pelosi at being able to well time

selling Tesla sales or shares take a

look at this chart here that floats

around on Twitter and it shows you a

little red circle every time Kimball

musk sells shares he just sold about 19

million dollars worth of Tesla stock in

the first week of April and once again

it appears as if certainly he didn't

have Insider information he just

happened to perfectly time Tesla once

again now Goldman Sachs is slightly

bearish here in my opinion with their

low forecast but they actually give some

really dirty low forecasts for the

future and I want you to see some of

those now do keep in mind that they do

say on the bull side that Tesla is

expanding their current addressable

Market they're getting with these lower

prices to a completely new market which

in my opinion is kind of like a way of

saying hey Tesla's advertising by

creating new network Effects by creating

or opening up Teslas to a new lower tier

of customer that might otherwise be

looking at more expensive other vehicles

this is leading to Tesla's market share

in European countries trending higher

we've got a nice uptrend on Tesla's

market share in Europe of the total Bev

not just uh not just hybrid or sorry ice

ice compared to EV market share but the

battery Electric market share Tesla

clearly has a dominance here and is

expanding the same is true for Tesla's

EV stake in China the same is true for

the battery Electric market in China

we've got some beautiful uptrends on

Tesla and you ultimately have uh Goldman

Sachs here projecting that you could see

16 percent of Tesla's total revenues end

up coming from their energy business in

the future which is interesting because

just yesterday I made projections about

Tesla and I wrote down that a total

revenue from energy could be somewhere

around 10 to 15 percent I ended up doing

my analysis based on 10 but this was

similar to what I was suggesting

yesterday that I had highly undervalued

how much revenue could end up coming

from the energy business from EPS

estimates this though scary scary

Goldman Sachs estimates here Goldman

Sachs estimates that in 2024 you might

see earnings per share at just 3.65 this

is pretty dirty because if you end up

only assigning a peg of One X to Tesla

at that level you end up with a price

target of 91 dollars for Tesla in 24.

that's really bad they round that to

roughly 90 if you take my peg multiple

of 1.67 at 3.65 you end up with a price

of closer to 152. so I'll write 152 at

Kevin's 1.67 for a peg but this is a big

downside collapse here for EPS growth

and we really need to see that EPS

growth step up so this is going to be

something we have to pay attention to

almost potentially more than margin is

the fact that EPS growth went negative

year over year is very bad because it

destroys all the valuation estimates for

Tesla now I personally agree with Elon

Musk that the Sun comes out next year

and yes Autos are hit hard Autos get hit

hard in stagflationary environments Ally

Financial taking massive losses they're

a lot of auto companies are getting cut

off from lending to used cars you've got

folks like CarMax taking massive new

lost reserves for subprime models so the

lower tier segment of the Autos Market

is already trash and if any of that

trickles into well the Tesla higher tier

territory where you're generally selling

to higher net worth individuals who

unfortunately are also getting laid off

in finance and Tech if they can't find

new jobs maybe a Tesla is not the right

answer and this could potentially lead

to more price cuts for Teslas and that

unfortunately is what people are saying

is that right now Tesla is an

environment of fear where we don't know

how much more Tesla's going to have to

cut these were the Tesla price decreases

in U.S China and Germany you could see

them continue to Trend down on the right

over here and the odds are we're going

to see more of that going forward that

is going to potentially create either a

hell of a stock to own or the

opportunity of a lifetime to buy Tesla

at massive discounts I personally

believe that if you're an investor in

Tesla you need to be prepared to Diamond

hand this sucker until at least 12

months from now talk to me after q1

earnings 2024 after those cyber truck

delivery start after energy ramps after

Austin and Berlin further ramp after we

get those Mega packs out and we really

start getting to an Era of massive free

cash flows again and profits until then

I'm gonna enjoy watching a giant penis

go fly into the air via nothing other

than of course this Starship launch so

if you want to see the Starship launch

buckle up because here we go because

really Tesla stock is probably going to

explode just like this Starship is

probably going to explode I have no idea

what's going to happen I'm filming this

live

[Music]

wow

wow

and if all goes according to plan and

there's other things that have to happen

too for Artemis oh it blew up this

system as soon as and it's a very

yay we got our boob

yay we're so happy it blew up I mean

it's still pretty cool

clear the path

like the first integrated like of the

baster and the Starship vehicle

five new bear of our control center at

Star base there's Elon