Tesla: An Updated Valuation

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About: Tesla, Inc. (TSLA)
by: Pelorus Capital
This article is exclusive for subscribers.
Pelorus Capital
Long/Short Equity, Deep Value, Special Situations
Summary

Under a "Blue-Sky" scenario, I arrive at a $372 valuation for Tesla shares.

Under a more realistic scenario, but using industry leading margins, capital intensity, and sales growth, I arrive at a $157 valuation for Tesla.

There is no buffer in how Tesla is run: few seem to be contemplating the stress on this business that would result from a recession.

All businesses have accidents, but Tesla shares assume none. When they invariably have one and shares price that in, then Tesla may well make a good long.

Roughly 2 years ago, I took a stab at valuing Tesla using not hope, dreams, or qualitative arguments; but instead a look at the numbers (which is what most investing should come back to anyways).