Tesla Valuation: Even Optimism Fails!

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  • Even under optimistic assumptions, Tesla's EV segment is significantly overvalued. Current stock value prices in resounding successes in Tesla's other ventures such as its energy generation and storage segment, Optimus robots, and full self-driving. Anything short of a definitive success would make Tesla overvalued.
  • Tesla is facing increasing competition from traditional automakers. Its operating margin has fallen from 17% in 2022 to 11% in Q1 2023, levels similar to some traditional automakers such as Mercedes and Stellantis. It has begun cutting prices to remain competitive.
  • Target price: $106 even under assumptions of a 10% market share of the world's total cars produced, maintaining a 17% operating margin in the longer run. High sales to capital ratio of 4 in the longer run.
Valuation Presentation (PDF Slides)                            Valuation Workbook (Excel)





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