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ValueAnalyst
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IIRC I liked this exact post a couple of weeks ago when I was reading through the 2013 threads... the similarities to today are uncanny.
ValueAnalyst
Closed
Important to point out that @DaveT said that on November 6, at the depths of hell... Your post, unintentionally I'm sure, may have made it seem to some readers like it was just said. Having said that, I second the question.
Yep, I had a colleague at PFE that exercised some stock options to buy a Miata. A year later, people were asking him how he likes his Ferrari.
This is an updated look at a TSLA price projection based on historic Revenue and Gross Profit multiples, a steady 50% annual revenue growth rate over the next 5 years, and 5% annual dilution of shares outstanding. This also assumes stable liquidity in the markets, steady risk-free rate of return, steady growth rate perception, steady dilution, 0% dividend, and ???, most of which will not happen. uayor
Log scale:
Linear:
Below is a rough example of Revenue-based price per share projection:
Revenue projection = (0.5*(Model 3 + Y) + Model S + X + Heavy Duty Pickup + 3*(Roadster + Semi)) * 100,000 USD
The aggressive multiplier accounts for Tesla Energy revenue at an equivalent growth rate.
How this formula compares to past results (in Billion USD):
Year: Actual; Expected
2013: 2.014; 2.248
2014: 3.198; 3.166
2015: 4.046; 5.056
2016: 7.000; 7.624
2017: 8.471; 7.404 (as of Q3)
2017e: 11.471; 10.404 (assumes Q4 Revenue of $3 Billion)
Forward Revenue estimates ($B) based on 50% annual growth (and the breakdown of deliveries required to achieve these figures):
2018: 17.207 (144,140 Model 3; 100,000 Model S/X)
2019: 25.810 (286,195 Model3; 100,000 Model S/X; 5,000 Semi)
2020: 38.715 (484,293 Model 3; 100,000 Model S/X; 15,000 Roadster/Semi)
2021: 58.072 (801,439 Model 3/Y; 105,000 Model S/X/Heavy Pickup; 25,000 Roadster/Semi)
2022: 87.108 (1,287,158 Model 3/Y/Pickup Lite?; 115,000 Model S/X/Heavy Pickup; 40,000 Roadster/Semi)
2023: 130.662 (1,998,237 Model 3/Y/Pickup Lite?; 135,000 Model S/X/Heavy Pickup; 60,000 Roadster/Semi)
Even at an extended 50% growth rate, incredibly aggressive for a company this size, these numbers somehow seem conservative.
To adjust these projections with different delivery numbers, plug in the numbers, determine the growth rate, then use the formula 0.001*growth rate^2+0.11*growth rate+1 to determine the trailing twelve month revenue multiplier. Multiply the projected revenue for any year by the revenue multiplier, then divide by a projected number of shares outstanding for that year. The result is the average expected price per share for that year.
Log scale:
Linear:
Below is a rough example of Revenue-based price per share projection:
Revenue projection = (0.5*(Model 3 + Y) + Model S + X + Heavy Duty Pickup + 3*(Roadster + Semi)) * 100,000 USD
The aggressive multiplier accounts for Tesla Energy revenue at an equivalent growth rate.
How this formula compares to past results (in Billion USD):
Year: Actual; Expected
2013: 2.014; 2.248
2014: 3.198; 3.166
2015: 4.046; 5.056
2016: 7.000; 7.624
2017: 8.471; 7.404 (as of Q3)
2017e: 11.471; 10.404 (assumes Q4 Revenue of $3 Billion)
Forward Revenue estimates ($B) based on 50% annual growth (and the breakdown of deliveries required to achieve these figures):
2018: 17.207 (144,140 Model 3; 100,000 Model S/X)
2019: 25.810 (286,195 Model3; 100,000 Model S/X; 5,000 Semi)
2020: 38.715 (484,293 Model 3; 100,000 Model S/X; 15,000 Roadster/Semi)
2021: 58.072 (801,439 Model 3/Y; 105,000 Model S/X/Heavy Pickup; 25,000 Roadster/Semi)
2022: 87.108 (1,287,158 Model 3/Y/Pickup Lite?; 115,000 Model S/X/Heavy Pickup; 40,000 Roadster/Semi)
2023: 130.662 (1,998,237 Model 3/Y/Pickup Lite?; 135,000 Model S/X/Heavy Pickup; 60,000 Roadster/Semi)
Even at an extended 50% growth rate, incredibly aggressive for a company this size, these numbers somehow seem conservative.
To adjust these projections with different delivery numbers, plug in the numbers, determine the growth rate, then use the formula 0.001*growth rate^2+0.11*growth rate+1 to determine the trailing twelve month revenue multiplier. Multiply the projected revenue for any year by the revenue multiplier, then divide by a projected number of shares outstanding for that year. The result is the average expected price per share for that year.
To be fair to those who sold during that time, the share price did fall more than 10% over the following days, so they may have come out ahead...but talk about picking up pennies in front of steam roller.
If you and yours use the pool and addition regularly and enjoy them, I wouldn't regret that. Some things are more important than money.
I'm paying for an indoor swim spa addition as we speak. I know that for me it would absolutely not be worth delaying it just to have more money; each year I spend without it is a year of my life which I can't spend enjoying it. (I and my girlfriend have no fewer than 5 chronic illnesses for which it is highly recommended.) The quality of life improvement is well worth it, and an extra year of suffering is not worth any amount of money. (Well, OK, maybe if it were a billion dollars and could buy me my own private clinic, but TSLA isn't going to go up that much in one year ;-) )
I don't know about scaling stock price with a constant, as events happen in fits and starts.
Yes, it's important to recognize it as simply a rough way of projecting possible future outcomes based on what has happened in the past; doing this always has the potential to be misleading.
you might want to consult w/TT007 before you opt out of The Neroden Clinic (jk ; )
dc_h
Active Member
Interesting that Tesla is on track to hit 2019 revenue in 2018, even without Tesla Energy which is likely to start taking off this quarter. TE should be at least 5 billion and Model 3 being over 250,000 (my assumption).
ValueAnalyst
Closed
Would this scenario play out for J19 Max Pain as well, which is currently at $300?
Yes, indeed, Daniel. And the same would be true for my 2013 APR 16 post when TSLA achieved an all-time closing high of $45.59. Someone LOVED it today: Short-Term TSLA Price Movements - 2013
dandurston
Member
Certainly there have been some positive indicators lately, and I'm sure some bottlenecks have been fixed, but I think we should be cautious about the ramp. Many people are speaking of it in binary (the ramp has/hasn't happened) when really, as Elon described, it will be a series of steps.
The first small step happened months ago when they got to 50-100 cars per week. There are indications that a larger step has recently happened (perhaps to 500 cars/wk), but I think speculation of thousands per week is pre-mature. Things almost never happen faster than Elon's predictions, and Elon said 5000/wk by the end of March. Admittedly Elon did also say a few thousand/wk exiting December, but I took that as a gentle way to step back from 5000, and probably still too optimistic.
Most importantly, the ramp is going to happen. The dips between now and then based on ramp worries are just noise, or buying opportunities if the hair pulling gets too severe. I was surprised to see it drop so much after the last ER because I thought the delays were already (1) obvious and (2) going to be solved, since Tesla survived launching the X, so I bought some more J19 LEAPs (now up 40%).
I think the rise last week was because of promising production signs, but it could easily go back down if negative signs emerge. After Tesla cranks a bunch of EoQ cars, production might go quiet in January (like it did with the X). I see the share price at $300 for extreme ramp pessimism, and $370 for full ramp optimism. $400+ comes when the margins are proven.
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Helpful post and very much agree on key points here.
I’ll still suggest that it does seem quite possible that Elon was more conservative than usual in his revised timeframe on the last earnings call. It was pretty clear that he had been very shaken and disheartened after the nature of the bottleneck was realized. Elon used strong language to describe how this impacted him emotionally. Not saying this is a permanent change, but given how freshly “burnt” by the delay Elon seemed to be, I suspect the current late Q1 guidance for 5K/week may well be a more conservative best case scenario than usual. What’s more, thousands per week by end of year (which I actually think he felt more so would happen mid-January), but reaching 5K per week at the end of the quarter sounded to me like a level of timeline cushioning we usually don’t hear.
As you pointed out (even if Elon was being more conservative than usual) there’s no certainty there won’t be other issues springing up which may push hitting 5K/week past Q1. As you well put it, ramping up is not binary.
Again, very much agree on your main points, just offering an alternative possibility on this particular point.
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As I understand it, exaggerated moves away from max pain only occur if a few key requirements are in place, and they were on Friday:
- Price per share is far above the max pain point preceding a high volume expiration (such as Triple Witching like this past Friday)
- High amount of call side open interest that is in the money and expiring end of day (it might work the same, just in the opposite direction, with put side OI, I'm honestly not sure) - thus expected to imminently be exercised in return for the underlying shares (not really the case with option contracts not expiring eod, such as J19s)
- Higher than average trading volume trending away from max pain on the day of expiration - in this case buying interest on Friday was greater than selling pressure, which makes it more difficult for market makers to pin pps to a specific price
As always, correction of any mistakes would be great.
Zhelko Dimic
Careful bull
You didn't use enough of the fancy words to be truly convincing
, but otherwise, based on what I know, you nailed it.
TrendTrader007
Active Member
It was a misguided attempt at satire and expression of my thinly veiled contempt at the sheer absurdity of the quoted post. Obviously, the person who wrote the quoted post is either naive at stock market investing or is simply clueless about how markets work. Is there a possibility of TSLA dropping 5% next week just because it went up significantly this week. Sure, anything can happen in the markets. Is it likely? Not really. The greatest probability is that TSLA keeps on running higher this week and for the next several weeks. One of the basic rules of trading is buy strength and short weakness. It would be a folly of gigantic proportions to sell TSLA here just when the SP is about to take off into stratosphere.
I established my current TSLA position on December 19, 2016 and have not sold a single share or call since. I put ALL my net worth into TSLA and then kept on buying furiously all year long on margin to the extent that my original cost basis of $202 went up to $275. As of now I’ve got a huge position in common as well as calls. Due to the once in a lifetime opportunity afforded by TSLA stock I also quit a job that I had held for 16 years and rolled over all my 401k into TSLA stock. As of now all my net worth is in TSLA plus I’ve got huge amount of margin and I’m paying well over XXK a month in margin interest. I’m currently 140% long TSLA not counting the hundreds of calls that I’m holding. Suffice it to say that I’ve bet my entire financial future on a single stock because I totally believe that TSLA is about to do in 2018 what bitcoin did in 2017. Not in terms of magnitude but in terms of the direction of the next move which will be extremely parabolic.
When will I sell my holdings? Not anytime soon. It’s easy when it comes to selling my calls. I’ll sell my 2018 calls shortly before they expire in January 2018 and January 2019 calls at the market open on Wednesday January 2, 2019 because I expect a major stock market crash in 2019.
About my common stock position which is about 18 to 19 times my options position: I really dunno. I certainly have zero intentions of selling a single share until January 2, 2019 but after that I really don’t know. My intuition tells me to hold onto every single share for next several years but I’m not blind to the probability of a 1987 style crash in 2019
So I’ll see
And will keep you guys posted on Twitter and this board
PS: my only regret is that I don’t have a bigger position in TSLA
I’m totally maxed out
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You have whale balls.
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