GOEV

Tesla’s Deliveries Bounce Back in Second Quarter

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Source: Tesla By Brian Nelson, CFA On July 2, Tesla (TSLA) released its production and delivery numbers for the second quarter of 2024. Production of Model 3/Y and other models totaled 410,831, while total deliveries came in at 443,956 units, consisting of 422,405 Model 3/Y and the balance coming from other models. The results were better than expected and helped to propel shares of the electric-vehicle maker higher. Tesla’s equity has shot up past the high end of our fair value estimate range, and while we liked the better-than-feared news regarding its deliveries, we continue to be on the sidelines with respect to Tesla’s shares. The next big catalysts for Tesla’s shares are its earnings release on July 23 and … Read more

Tesla Is A Net-Cash-Rich, Free-Cash-Flow Generating, Secular-Growth Powerhouse

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Image: Tesla is generating billions and billions of dollars in free cash flow. By Brian Nelson, CFA The cash-based sources of intrinsic value (and the trajectory of growth in them) are the most important considerations when it comes to assessing the attractiveness of an equity. Two of the most important cash-based sources of intrinsic value are net cash on the balance sheet and future expected free cash flows, and in these two areas, Tesla (TSLA) excels. Though we won’t be adding Tesla to any of the newsletter portfolios anytime soon, we like it within a diversified basket of large-cap growth equities, of which the Best Ideas Newsletter in some ways approximates. When Tesla reported its second-quarter 2023 results July 19, … Read more

Tesla Registers Record Total Deliveries in Second Quarter 2023

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Source: Tesla By Brian Nelson, CFA At the start of 2023, Tesla’s (TSLA) price-to-fair value ratio stood at just 0.39, revealing a stock that was severely undervalued and one of the most undervalued stocks in our coverage universe. Shares of Tesla have rocketed higher more than 150% so far in 2023, and while we highlighted it as one of our favorite stocks to start this year, it never made it into the newsletter portfolios. We’re not too worried about that though given how well the newsletter portfolios were positioned with respect to exposure to large cap growth, which, itself, is up more than 35% so far in 2023. On July 2, Tesla noted that it delivered a total of 466,140 … Read more

Big Changes in the Auto Industry as Chip Shortages, Supply Chain Issues, and Rising Input Costs Complicate Matters; Tesla and Ferrari Our Two Favorite Names

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Image: Ferrari’s fundamental momentum has been strong of late. Image Source: Ferrari N.V. 2022 Globe Newswire By Brian Nelson, CFA The auto industry perhaps has changed more than any other industry the past five years. First, it was Ford (F) that said it wouldn’t make passenger cars anymore, except for its iconic Mustang. Then, the European Union said that it would eventually end the internal combustion engine (ICE) by 2035. Then, Tesla (TSLA) reached over $1,200 per share and over a $1 trillion market capitalization. Can you imagine a world where Ford is not making sedans, the once modern-marvel of the internal combustion engine is dying, and where one car maker is worth as much as the next nine car … Read more

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

Stock Markets Still Healthy, Big Cap Tech and Large Cap Growth Safe Havens

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Image Shown: The S&P 500 has been trading above our fair value estimate range (shaded blue area) for some time now. A modest sell-off should be expected. We continue to be bullish on equities for the long run and point to the areas of big cap tech and large cap growth as sources of fundamental and financial resiliency. By Brian Nelson, CFA The S&P 500 (SPY), chart shown above, is trading above our fair value estimate range. The recent sell-off should not be surprising, and it has been predominant in speculative free-cash-flow burning technology stocks, of which we tend to avoid. In January of this year, we “raised” 10%-20% cash in the Best Ideas Newsletter portfolio and Dividend Growth Newsletter … 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

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