TSLA - Embedded Expectations Analysis - 2020 09 14
Tesla, Inc. (TSLA:USA) currently trades near historical highs relative to UAFRS-based (Uniform) earnings, with a 122.2x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may have concerns about margins, Tesla Solar products, and their manufacturing advantageSpecifically, management may lack confidence in their ability to improve operating margins, sustain Model Y gross margins, and maintain their long-term advantage in manufacturing. Furthermore, they may have concerns about reducing costs related to noncritical patent projects, the total vehicle efficiency of Model 3, and the intermittent nature of solar and wind energy. Moreover, management may be exaggerating the potential of Tesla Solar products, Full Self-Driving software, and the range of Tesla Model S. They may also be exaggerating the long-term sustainable advantages of Tesla in manufacturing. Finally, they may be concerned about current nickel supply and they may lack confidence in their ability to assess the crash probabilities and premiums of customers
Tesla designs, develops, manufactures, sells and leases electric vehicles and energy generation and storage systems, and provides services related to its products. The company operates as two reportable segments: automotive, which includes the design, development, manufacturing, sales, and leasing of electric vehicles as well as sales of automotive regulatory credits; and energy generation and storage, which includes the design, manufacture, installation, sales, and leasing of solar energy generation and energy storage products, services related to such products, and sales of solar energy system incentives.
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