Why Tesla Stock Is Up 51% In 30 Days

Summary

The video script discusses Tesla's stock performance, emphasizing the importance of separating the company's fundamentals from its stock price. It highlights a 51% increase in Tesla's stock in one month and a 90% increase in revenue. The speaker argues against overpaying for future potential, using Tesla's Full Self-Driving (FSD) as an example. They stress the need for a balance between a compelling story and solid numbers, advocating for investing when the value significantly exceeds the price.

Takeaways

• 🚀 Tesla's stock price has increased by 51% in the last one month, indicating a significant market movement.
• 🗨️ Discussions on social media platforms like Twitter are highlighting Tesla as a stock to own long-term, similar to past sentiments during its peak in 2021.
• 📈 The company's fundamentals have shown improvement, with revenues nearly doubling from $53.82 billion in 2021 to $94.7 billion in the last 12 months.
• 📊 The speaker emphasizes that stock prices are influenced by news and emotions, rather than just fundamentals, and warns of potential future sell-offs even by staunch Tesla supporters.
• 🤔 The importance of understanding the difference between a company's stock price and its underlying value is stressed, advocating for investment decisions based on fundamentals like revenue and profit growth.
• 🚗 The potential of Tesla's Full Self-Driving (FSD) technology is highlighted, with its subscription model contributing significantly to the company's potential profits and market cap.
• 💰 The gross margin for FSD is estimated to be around 75%, meaning each additional unit sold could bring in substantial profit and increase Tesla's market value.
• 🔢 The script challenges the narrative that Tesla's valuation is justified solely by its potential as a tech company, pointing out the need for a realistic assessment of its current status and future prospects.
• 📉 Tesla's stock has experienced volatility, including a drop in the price of its FSD subscription and delivery misses, which the speaker suggests should be considered in any investment decision.
• 📊 The speaker uses a stock analyzer tool to project different scenarios for Tesla's future, emphasizing the importance of a margin of safety in investment predictions.
• 🔮 A future vision of Tesla as primarily a software company is presented, but the speaker questions whether the market is overvaluing Tesla's potential in this area without sufficient current evidence.

Q & A

What is the recent performance of Tesla's stock price?

Tesla's stock price has increased by 51% in the last one month, as mentioned in the transcript.

What was the peak revenue of Tesla in 2021?

The peak revenue of Tesla in 2021 was $53.82 billion, which occurred on November 4th, 2021.

How much has Tesla's revenue increased in the last 12 months compared to 2021?

Tesla's revenue has seen a 90% increase in the last 12 months compared to 2021, reaching $94.7 billion.

What is the Full Self-Driving (FSD) feature, and what is its current subscription cost?

Full Self-Driving (FSD) is a feature offered by Tesla that aims to provide autonomous driving capabilities. It currently costs $99 per month for subscribers.

What is the estimated gross margin for Tesla's FSD subscription?

The estimated gross margin for Tesla's FSD subscription is around 75%, meaning for every unit sold, approximately $75 of profit is generated before overhead costs.

How much additional market cap does selling an extra FSD unit contribute to Tesla, based on the transcript?

Selling an extra FSD unit contributes approximately $188,000 in market cap to Tesla, calculated by applying a 20 multiple to the $900 annual profit per unit.

What is the current market cap of Tesla, and what is the target market cap to reach a valuation of $5 trillion?

Tesla's current market cap is over 700 billion dollars. To reach a valuation of $5 trillion, the company would need to significantly increase its value, as detailed in the transcript.

How many cars would Tesla need to sell FSD on to generate an additional $1 trillion in value, according to the transcript?

To generate an additional $1 trillion in value, Tesla would need to sell FSD on approximately 222 million cars, based on the $188,000 value per car calculation.

What is the current global market for new cars, and how does it relate to Tesla's FSD sales goal?

Around 50 million cars are sold worldwide annually. To meet the FSD sales goal of 222 million cars, it would take a significant portion of the global market, which may not be feasible in the short term.

What is the significance of the transcript's discussion on Tesla's revenue and profit in relation to its stock valuation?

The transcript emphasizes the importance of looking at the fundamentals of a company, such as revenue and profit, when evaluating its stock valuation. It suggests that Tesla is currently being valued more like a software company than a car company, which may not be justified by the current numbers.

What is the transcript's perspective on the future of Tesla's stock price and the role of emotions in investing?

The transcript suggests that emotions play a significant role in driving investment decisions and that the future of Tesla's stock price is uncertain. It advises investors to focus on the fundamentals of the company and make decisions based on a reasonable assessment of its value.