Rebuying Tesla Stock? An Analysis.

is it finally time to repurchase a Tesla

stock in this video we are going to

analyze the fundies the fundamentals of

Tesla stock first it's important to know

that a lot of folks about a month ago

seeing bad deliveries coming decided you

know what let's trim Nvidia stock and

trim Tesla stock and use them to offset

each other as a tax loss Harvest for the

tax slots that you had purchased at

higher levels that doesn't mean all of

your Shares are potentially negative

most people know and in case you don't

know there are brokerages that let you

pick which shares you want to sell so

let's say you have some Tesla stock you

bought at 50 some at 100 some at 150

some at 200 250 well you could sell

those at 250 and 200 by picking those

out telling your broker to sell

specifically those tax slots take a loss

on those without affecting the sales on

your original uh stocks that have gains

those shares so then you could offset

that with something like an Nvidia which

peaked out about a month ago around that

950 970 level and now it's sitting in

the high 8s you know 880 850 is where it

was yesterday so there's been an

opportunity to pull that kind of trade

the question now though is are the

fundamentals strong now to where

reallocating to Tesla makes sense and in

this video we're going to analyze

exactly that it's worth noting that

there have been a few pieces out uh from

the street on Tesla over the last few

days it's worth taking a Peak at a

couple of these for example Adam Jonas

who's a really big Tesla bull when it

comes to the software side uh he says

Tesla has a big moat when it comes to

data and compute do note that Tesla's

in-house Computing segment which Adam

Jonas gives a lot of valuation to Dojo

was sort of um called a highrisk uh you

know less likely to happen bet by Elon

in the last earnings calls and that

negative sort of pessimism on on on do

Dojo was a little disappointing for some

Tesla investors but it's true Tesla

still has the data the lead on energy

the question's going to be what's the

path to monetizing Robo taxi we'll talk

a lot about that you got a bar Clays and

they have a piece where they basically

compare the Uber Bulls and the normal

Bulls they call them the rational Bulls

uh those that are just using reason and

logic and then the exuberant bulls that

are a lot more enthusiastic I meant to

switch to this one we're going to go to

that spreadsheet in a moment we're going

to go through four scenarios here but uh

here is uh that barklay piece and they

suggest that rational Bulls think the

pivot away from the model 2 is actually

dangerous because it reduces vehicle

volumes for the company Barclays goes as

far as saying 60% of their 2023 volume

for Tesla comes from the model 2 so you

kind of really want to see some model 2

movement uh for for Tesla here whereas

what they call the uh they they think

that rational bull C the model 2 is

maybe the iPhone moment for Tesla where

you could really get this broad-based

expansion compete with the Hyundai the

Civics uh whatever right the the sort of

um the Corollas of the world you want to

compete in that low 20s tier the 19 to

25k so uh there's been a lot of

enthusiasm around that 25k car bringing

that mass Market opportunity again the

Uber Bulls see this as oh Robo taxi is

close closer this is really good news

this is really bullish it means we're

about to be at Robo taxi version 1234

just came out I've not tested 1234 yet

I'm on 1233 uh you I got the download I

got to got to update it but I haven't

done that yet uh but for this for the

purposes of this fundamental video we're

going to go a little further than just

oh what's the latest update how's the

latest update because we've got a lot of

work to do when it comes to fstd that's

not saying it's not great we posted a

pretty good survey on ec.com

and you can see that here this is from

Twitter and so we cited them here you

can click on the link for that but uh

this is a very interesting personal FSD

progress tracker survey and so they

collected data to see how people think

uh 123 and and versions 12 are behaving

and really what you find is it's gotten

very good at smoother left and right

turns however it is more likely to clip

curves now which is not great so you be

careful on that it's substantially

better at Lane changes and heavy

traffics slowing down for bumps or dips

much better on this uh but it's still

having issues on hand signal navigation

when they're traffic cops understanding

new road signs pulling over for

emergency vehicles Behavior at flashing

red lights bad at it doesn't basically

doesn't reverse not great at parking

very bad at avoiding potholes or

avoiding uh you know coasting in

people's blind spots those are some

issues that it has now but gotten much

better at things like roundabouts for

example where previously it was terrible

and it's actually pretty functional at

roundabouts so FSD is definitely

improving is it is it full self-driving

yet no but it's definitely improving

you've got brand retention at the that's

the strongest over at Tesla compared to

any other brands so you've got a lot of

enthusiasm for the stock uh and and the

brand itself the question is can we

actually get to a place where we're

going to see this enthusiasm translate

into fundamentals right now you can see

Tesla stocks down about 75 bit on the

day hanging out at that about

1702 line let's see if we're able to

hold on to that support for those of you

trading remember I send all my alerts to

stocks and psychology of money course

members where we do technical analysis

and fundamental analysis on a daily

basis and you get lifetime access to

that with no recurring fees so what do

we want to do over here well on this

spreadsheet this is going to be a little

tricky okay so you're going to have to

kind of roll with me on this one uh

we're going to go down one column at a

time and then we're going to just change

very few things so you can see some

changes here the first thing we're going

to do is we're going to assume 2.5

million vehicle delivered for

202 uh 6 so these are going to be 2026

numbers and the way we're going to come

up with that is we're going to assume

flat for 2024 and then we're going to go

with about 18% growth for 25 and six

that should get us all the way to 2.5

million vehicles delivered for 2025 now

that's a far cry from where we used to

be at like 3.1 million vehicles or even

3.6 million Vehicles where some

estimates were for 2025 so the estimates

have come down substantially it is worth

keeping in mind that one of the biggest

ways Tesla can increase their earnings

per share right now is through vehicle

deliveries this is why there's so much

talk about that compact model 2 and

concerns that if we don't have the

compact model 2 we're going to get fewer

deliveries the Tesla remains a little

bit more in that luxury car market space

even though you can get a pretty

inexpensive model 3 or used model y

these days we're going to be just

focusing on new cars right now so the

First Column right here is we're going

to go cars only what is the basic

valuation of Tesla when we look at it

from a cars only point of view we'll go

with a revenue per vehicle of about

44,000 2.5 million Vehicles we'll assume

most of that is from sales we'll give 2%

to leases we'll say servicing is about

5% which most of that is a break even

business anyway and what we're going to

do is we're going to be generous here

we're going to give Tesla uh a little

bit more than a double on energy that's

going to include revenues from uh

supercharging it's going to be offset by

lower regulatory credits but it's going

to include uh mega pack solar whatever

over the next two and a half years we

think an easy two and a half double for

that energy but who knows all of this is

risky none of it is personalized

Financial advice so what do we have when

we go here well we get total revs uh and

then we're going to start getting some

expenses what we're going to do for

margin is we're going to go with a

margin of

82.5% that's because the long run

average you're seeing in sort of the

Chinese automakers is somewhere around

12 to 15% margin we'll give Tesla a

little bit of Street Credit here we'll

give him a 17.5% margin it's a far cry

from the 30% margin we hit with

regulatory credits and at one point

without regulatory credits which was

really impressive that marked the top

for the stock since then margin's been

straight down and we're not even over

20% right now so we're going to go

conservative we're going to go with 17 %

and we're going to assume that future

efficiency improvements in manufacturing

are just going to go to making the car

more affordable rather than increasing

margin so we can get more volume so

that's why I'm going to stick with 18.5%

margin in fact one of the things we will

not do is we won't be CH changing margin

as we go through this we're going to

assume the expenses on FSD are 10% the

expenses on Robo taxi we're going to go

with I'm going to go with 50% expenses

on Robo Taxi

expenses on leases 55% Services 95% so

basically break even on Services most of

the money really could come from FSD

that's where you can you know you're

going to spend about 10% on chips that

could work out to $400 million uh uh

this year but in the long run it should

work out average out to about 10% on

chips and training and and all of that

to make sure our end to-end neural Nets

are operating as well as possible and of

course we'll use a tax rate of 19%

across the board then what we're going

to do is uh we are going to use a uh 30%

growth rate for our earnings per share

so we really want to see 30% EPS growth

if you're using less EPS growth for the

average of the next four years you're

going to have a problem with valuation

but we're going to leave that for a

moment so in the far left column we're

going to go 17.5% margin 2 1.5 million

vehicle deliveries no FSD no Robo taxi

all I want to see is what is this stock

worth from the point of view of Auto

Sales and from a point of view of just

Auto Sales

at 30% EPS growth going forward for the

next 4 years I should be at about a

$163 stock that's really just 2 1.5

million Vehicles delivered you can see

if I drop this earnings growth number to

20% that'd be pretty bad for the stock

uh let's actually put the percent sign

in there that brings you down to about

$109 so depending on where that earnings

growth is if we're somewhere between 20

to 30% you're somewhere you're you're

creating a Baseline for the stock of

between $110 and $160 for the stock just

based on 2.5 million auto sales by 2026

do keep in mind that if we go with 30%

yes 163 is great but that's

$163 2 and A2 years out so that's

actually really bad because it gives you

a net return that is negative over the

next two years but that's our lowest

number we're not including any FSD or

Robo taxi of course we're also because

it's so speculative we're not going to

include insurance

uh or or semis right now we're going to

do that on purpose just to sort of make

sure we're conservative as much as

possible with these numbers and I think

we're already going to be very very

generous as we move to the right over

here so I don't think we need to be even

more generous we we want to be realistic

here and uh there's been a history of

being too generous for Tesla already so

now what we're going to do is we're

going to go and we're going to go throw

in FSD all right so let's assume that uh

Tesla is going to have a

37.5% take rate on their entire vehicle

Fleet keep in mind not every country is

going to use FSD uh not uh every vehicle

owner is going to pay for FSD and even

if you have a 50% take rate on new

vehicles you'll still be in like the 30s

for old Vehicles because some people

like me have already paid for full

self-driving that does not drive new

revenue for Tesla everybody who bought

FSD for 5K or $7,500 like I did you're

not contributing anymore to Tesla's

pocketbook so that does hurt Tesla so

that's going to lower the take rate

going forward but what I'm going to do

is I'm going to draw a uh take rate here

and what we're going to do is we're

going to go uh

11 million vehicles on the road we're

going to take the current Fleet and then

we'll add about uh let's see flat so

we'll go about the current Fleet if say

6 million vehicles on the road plus 1.8

flat for this year 2.2 let's say next

and we'll go 2.5 for the next so we'll

call it about 125 million vehicles on

the road so let's go

125 1 2 3 12 million vehicles on the

road uh times a 37.5% take rate time

$200 * 12 that could get us FSD revenue

of about

11 uh $25 billion that would be very

juicy that would be a very very juicy

set of Revenue here for Tesla uh I like

that that would be good let's go ahead

and paste that across the board for uh

for all of these and uh we will preserve

the formula here so we could set this

Baseline in remember we're only going to

spend about 10% on FSD so this is good

like we have very very low expenses for

FSD so the only thing we're going to put

in here is FSD the only thing I put in

FSD with $1.1 billion of expenses I can

buy plenty of h100s for that what do I

get to my my price skyrockets for Tesla

to

$276 now that would give me about a 19%

return over the next two years which is

actually pretty bullish it's pretty good

now if I do change the take rate you're

going to see a pretty uh precipitous

change here if I drop the total take

rate to about half so if I go about 18%

right here uh you're going to see that

drop to about

$217 but that still gives you a 9%

return going forward so you know what

let's go ahead and leave it at 18% we'll

leave it at 18% for all of these because

we're we want to be a little

conservative and honestly that's already

pretty good seeing uh a 10% compounded

return over the next couple years so I'm

going to leave that I kind of like that

I think we're going in the right

direction here now what we're going to

do is we're going to throw in Robo taxis

uh Robo taxi look uh the revenue over at

uh Uber for robo taxis is about $37

billion in a year $37 billion about $22

billion of that just goes to labor the

people actually driving the car so let's

assume you know you don't have people

driving the car and 50% could go to your

pocket because some of it's going to

lower the price of Revenue that you get

for robo taxis anyway so and then let's

assume initially Tesla's only to able to

do about 10% of the business that Uber

is able to do keep in mind that people

aren't really going to care if there's a

human in it or a robot in it initially

they're going to care about availability

and price if I have to pay $50 for a

robo taxi or $20 for a human driver I'm

getting the $20 one if I have to wait 30

minutes for a robo taxi I'm getting the

Uber that's going to show up in 2

minutes I don't really care that much

about using the robot tax Network I want

what's faster cheaper and more available

yes in the long term as it's more

available robot taxi should get cheaper

but that could take decades to achieve

therefore initially I'm going to throw

my Robo taxi Revenue at uh just about

10% of what Uber is so we're going to go

with just a flat number here of 37 $3.7

billion I think this is way too generous

for 2027 so I'm going to do it anyway

and we're going to run it at 50% uh of

of a um uh uh an expense ratio here so

uh $3.7 billion expenses are going to be

1.85 how does that change our math well

hold on oh I don't actually have the

revenue added in here let me add these

in uh Robo taxi wait a sec we do have

the revenue something is not right hold

on do we have the expenses in here total

expenses yep we have the total expenses

okay why is my EPS not changing folks

we have a little bit of a problem I have

made a mistake oh cuz it's 3.7 million

duh I forgot to add three zeros that

would be insignificant there we go much

better okay 3.7 billion now you get a

change you can see Robo taxi at 10% of

uber with 50% of a cost structure only

gives you $20 for the share so most of

Tesla's valuation over the next two and

a half years comes from a take rate on

FSD not on Robo taxi Robo taxi is not

really where you want to go but robotex

could actually help you sell FSD now the

real thing that could really help us

drive volume or or uh EPS growth here

would actually be bumping volumes and so

I wrote that up here that I'm going to

bump volumes to 3.1 million for the end

of 2026 keep in mind that right now

we're not even expanding to Giga meico

Giga meico hasn't broken ground yet it

hasn't broken ground because we probably

don't need these freaking vehicles at

this point because there's not enough

demand for them so you have a little bit

of an oopsy doopsy there

uh not only is giga Mexico stalled but

you also have a stalling out on uh plans

of moving to other countries I know

there's a lot of enthusiasm that yes oh

yes all of a sudden we're going to go to

Giga India and all these things meeting

all of these different presidents is

cool and fun at all but it's not

actually leading to any kind of

realization of Tesla breaking ground

anywhere because we just don't need more

manufacturing capacity right now but

let's say we do get some more

manufacturing capacity and we get to 3.1

million Vehicles whether that's

cybertruck expansion or at lower prices

or a compact vehicle or whatever it is

okay we go to 3.1 million Vehicles we

Chang nothing else now uh Tesla stock

you can see moves up to

$258 so really where where you're trying

to push Tesla's stock up is all of these

things but the biggest push absolutely

comes from that FSD take rate and how

much money we could profit off of FSD

now the problem is everything to the

right of the left column is speculative

we don't know what the FSD take rates

are anymore because Tesla doesn't

disclose them Tesla doesn't give us

forecasts or take rates on or or or

anything on uh FSD so we're totally

guessing we have absolutely no idea

what's going to happen with Robo taxi if

they just do a trial of a 100 cars

you're dreaming if you think we're going

to get $3 billion of Revenue in the next

two and a half years that would I I just

I don't really see that mostly because I

don't think Vision FSD is fully there

yet FSD is great and I think those

trials are going to help so that does

leave me leaning towards this level

right here I'm leaning towards that 217

for the next two and a half years unless

we can really show that EPS growth is

exploding that's the other thing that

can move the stock if we could get back

to EPS moving up by 50% now we could

change our PEG ratio and we could

explode the stock back to3 to $400 but

again that's going to require proving

that we could get that EPS growth right

now honestly I think 30% EPS growth is

somewhat generous because we're still

going through a bottoming out process so

how do the fundamentals Fair well the

compact model makes Tesla more

speculative however while that makes it

more speculative it also gives it

substantially more upside all we need

from Elon in this next earnings call is

some clarity on take rates pricing for

FSD and forecasts are we going to get it

probably not but but in my opinion this

is a rational fundamental analysis of

what's going on with Tesla stock not

personalized Financial advice good luck

and thank you for watching Goodbye Oh

and is it time for me to Reby Tesla

stock well you'll be the first to know

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