Sorry for the long post.
Ok, so there has been a lot of talk here in this thread about the looming short squeeze and how most investors don't understand Tesla "like we do". I also believe there will be a short squeeze, or maybe a more gradual exiting of the shorts over time without a huge squeeze.
But I think it's also important to look at the company from a more fundamental/value investor perspective. I made a crude spreadsheet (link below) to try to predict the share price for the coming years. I would like any input on this and for those who find it of interest please edit/correct the spreadsheet (it's on Google Docs) and try inputting your own numbers and see what you come out with.
Ok, so income wise I figure in the years 2013 and 2014 it will be two main incomes: Margin on sales from Model S and X + income from sales of powertrains/technology (in the Q report called "Development Services"). The Model S and X are so similar, similarly priced, probably with quite similar margin that I think they can be seen as a whole. It's hard to know if the margin is higher or lower on the smaller or larger battery models, maybe lower on the 40 kW? I would think that options has higher margins. I believe that at least in 2013 and 2014 they will sell cars that tend to be towards the higher price rather than the lower, with big batteries and with many options. Remember that the $7500 tax credit benefits the consumer and no cost to Tesla. There might be other sources of income as well, such as new deals for sales of powertrains, sales of other technology/patents etc. but this is hard to predict.
Main expenses will be of course continued R&D even though this should be substantially decreasing (much of the R&D of the Model X will have been done already and is embedded in the R&D for Model S) until Tesla starts developing the Gen III vehicle fully (timing of this?). Next big expenditure will be establishing and running more stores and service centers, and a larger administrative organization as a whole (in the Q report called "Selling, general and administrative"). The next, and to me very hard to predict, main expense is the Supercharger network - how this plays out has a lot to do with if/who they team up with, who it's financed etc. (we will know more in september). We mustn't forget the paying back of the DOE loan which starts in dec 2012 and according to Q1 letter must be finished in sept 2019, which gives you about 7 years to pay back $465M with low interest rates, about $70M per year.
Oh yes and taxes. I'm no good with corporate tax in the US but I would assume that in the coming years Tesla will be able to use depreciation and such to avoid paying taxes (with the substantial investments they have made in the factory etc).
Further, to predict the share price you'll have to put a P/E number on the whole shebang - and this is not easy. It's hard to classify Tesla as a company. Is it a technology company? Hardware manufacturer? Software company? Car producer? Bit of everything I guess... I think we can all agree that they are market leaders, cutting-edge, and with great growth potential which should boost the P/E number. For reference here are some current P/E number (yes I know, all over the place):
Ford 1.88
GM 5.59
Toyota 32.83
BMW 7.62
Daimler 7.30
Volkswagen 3.44
Nissan 9.33
Honda 21.39
Apple 13.59
HP 7.09
Dell 6.85
Google 18.60
Yahoo 18.07
Microsoft 14.77
So a quite conservative estimate for 2013 with the following inputs: 20k vehicles sold, average consumer price $75k, sales from powertrains etc $30M, R&D at $100M, Stores/selling/adm at $100M, DOE loan payment at $70M, Supercharger network $30M and a P/E of 15 gives a share price of $14.97.
Just increasing the nr of vehicles produced and sold to 30k (possbile according to Elon) gives a share price instead of $41.70 in this model. So an increase in production will have a huge bearing on profit and thereby stock price is my belief.
In an optimistic model where they sell 30k vehicles and a mean price of 80k, still with 25% margin, with increased income from sales of powertrains/technology to $50M and other income of $50M (
for example sale of CO2 credits in EU by pooling with another manufacturer) and all of this making the company so attractive and with such great growth potential that the P/E goes to 25 gives a share price of $102.
So please, any corrections and comments on this model is much appreciated.
Link to spreadsheet (anyone can access, anyone can edit, please don't delete everything):
https://docs.google.com/spreadsheet/ccc?key=0AgwMomnB2tT-dEg3b2pKSlRqdGlYYWItWWhaOVhsbnc
