DMLRY

Net Cash Rich Tesla Reports Solid Free Cash Flow, Closes Out 2021 on a High Note

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Image Shown: A look at Tesla Inc’s new ‘Gigafactory’ manufacturing facility in Austin, Texas, that is currently under development. Image Source: Tesla Inc – Fourth Quarter of 2021 IR Shareholder Deck By Callum Turcan On January 26, Tesla Inc (TSLA) reported that it had produced ~306,000 vehicles and delivered ~309,000 vehicles during the final quarter of 2021. The electric vehicle (‘EV’) and battery maker beat both consensus top- and bottom-line estimates in the fourth quarter as it continued to successfully ramp its production capabilities. We plan to fine-tune our cash flow valuation model covering Tesla to take its latest earnings report into account, but we still expect the point fair value estimate to be below where shares are trading at … Read more

Tesla Scaling Up Nicely

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Image Shown: Tesla Inc is steadily working towards bringing another manufacturing facility online in the US, this time near Austin, Texas. Image Source: Tesla Inc – Shareholder Letter Covering the First Quarter of 2021 By Callum Turcan Electric vehicle (‘EV’) giant Tesla Inc (TSLA) continues to impress as it smashed past consensus top- and bottom-line estimates when it reported first quarter 2021 earnings on April 26. The company delivered 184,800 vehicles (182,780 Model 3/Y variants and 2,020 Model S/X variants) and produced 180,338 vehicles in the first quarter of this year, though we note that Tesla only produced Model 3/Y variants last quarter and Model S/X vehicle deliveries were met via its inventory. In the first quarter of 2021, Tesla’s … Read more

What to Do with Tesla?

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Image Shown: Tesla’s shares have surged during the past 7-8 months driven by a confluence of factors from fundamental improvements, a massive short squeeze, quantitative momentum traders and speculators anticipating its addition to larger indexes. We’re maintaining our view that shares of Tesla are overvalued, and investors need to be careful dabbling in these types of equities where price-agnostic trading is running wild. By Brian Nelson, CFA Tesla (TSLA) is a cult stock. There are those that either love it or hate it, and we seem to be among the few that are in the middle camp. We think the company makes awesome products, and we’re excited to learn more about the Cyber Truck, but its stock has served as … Read more

A Tale of Two Package Delivery Companies

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Image Shown: Shares of both FedEx Corporation (FDX) (indicated by the orange line above) and United Parcel Service Inc (UPS) (indicated by the blue line above) have come under a tremendous amount of pressure over the past year as the industry navigates the fallout from the US-China trade war. Both companies are investing heavily to improve their offerings to stay ahead of the game as large tech companies increasingly encroach on the shipping industry’s traditional turf. The S&P 500 index is indicted by the purple line above. By Callum Turcan The past year has not been kind to the air freight and logistics industry. The price of shares of FedEx Corp (FDX) have fallen by more than a third during … Read more

Automakers Gain on Potential Tariff Easing

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Image Source: Truck Hardware A potential easing of tariffs on auto imports to China, as President Trump had previously hinted, has improved sentiment across the auto manufacturing space as investors eye up the potential for more free exchange of autos between the world’s two largest economies. By Kris Rosemann US equities continue to be quite sensitive to US-China trade talk reports, and the auto manufacturing space has been the most recent beneficiary of potentially favorable developments. China (FXI) is reportedly considering a reduction of its auto import tariff to 15% from 40%, a win President Trump had pointed to as a positive development resulting from his meeting with Chinese officials during the recent G20 summit. The month of November marked … Read more

The Electric Vehicle (EV) Market Is Hot and Getting Hotter

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Image Shown: A look at Tesla Inc’s new Gigafactory factory (Model Y body shop) in Shanghai, China. Image Source: Tesla Inc – Third Quarter of 2020 IR Earnings Presentation By Callum Turcan The electric vehicle (‘EV’) market is hot and getting hotter. Aided by a combination of supportive government policies such as subsides for EVs (purchase tax credits, manufacturing tax credits), plans to ban the sale of automobiles powered by internal combustion engines (‘ICE’) in the coming years, and shifting consumer preferences (households preferring to appear “green”), the long-term outlook for EV sales is quite bright. Tesla Inc (TSLA) is the posterchild of the EV boom given its first-mover advantage, though competitive headwinds are rising. Legacy auto manufacturers are looking … Read more