@goodsoilinvest has been doing something of a deep dive into macro and $TSLA's valuation relative to mega cap peers. The table below shows US-based companies with a mkt cap >$400B, sorted by P/E ratio. It's no surprise that $TSLA ranks high on this list, as it is something of an indication that it may be overvalued (markets view, not ours) relative to peers. In a tough macro environment, it does make sense that all multiples will be compressed, but growth ones especially.

I’m becoming more convinced that the “risk off” play in the markets is overdone. For example, look at the historic PEG ratios of several “safe” utilities charted against $TSLA (in red). Tesla’s PEG ratio has fallen dramatically since November, and these figures are using analyst forward estimates which have repeatedly proven to be too conservative. Using my estimates Tesla’s PEG is already well below 1.0, which is a strong signal that the stock is mispriced.

This is a great video by @CathieDWood on diverging views of how 2022 may play out. TLDR: Huge inventory build-ups + decreasing consumer demand will actually require big price drops, leading to deflationary pressure. This coupled with huge pressure on the economy / employment will cause the Fed to back off the rate hikes. This will then lead to asset rotation into the very few companies which actually have sustained growth.

While this thesis has its merits, I'm skeptical.

Just got through updating my $TSLA EPS model. Below is my historic estimates (in green) compared to Tesla's actuals (black) and the Wall St. consensus (red).

The the average absolute value of my miss compared to actuals has been 20%. Wall Street's has been 62%. While bragging about my past accuracy is all well and good, what really gets me excited is when I look forward and realize that Wall Street is only expecting $15.23 for Tesla's 2023 Adj. EPS.

I'm currently expecting $25.02.

How we should be talking about autonomy – a thread:

I was happy to share my thoughts for this article, and it was fairly balanced, but I can’t help feeling that this topic is getting politicized when it should be analyzed in a cold, objective fashion.

nbcnews.com/tech/tech-news… I keep hearing criticism such as “it’s a dangerous test of unfinished software on public roads!” or “we don’t know what laws it might be violating!”

These concerns sound reasonable on the surface, but they must be trumped by a single question: “Is it safer than humans?”

A few people have commented that the comparison to AMZN in this video is not appropriate, and there is *some* merit to their points. But I think it's worth looking at in a bit more detail.

https://twitter.com/heydave7/status/1478423791726383107

Analyst consensus Adj. Earnings for AMZN for FY '22 is $26B. Analyst consensus for TSLA is $9.4B, and the valuation difference between the two companies kinda makes sense if this is the way '22 pans out.

1/ I try to give middle-of-the road analysis and give my honest views of Tesla. That has generally led to extremely bullish commentary.

But my experiences with FSD beta have consistently been quite bad and in the interest of honesty and transparency I want to share my thoughts. 2/ Stop signs have been a consistent source of odd behavior. At four way stops in particular, the car will come to a complete stop, then timidly creep forward much longer than seems necessary (car halfway into the intersection) before committing to going forward. This occurs...

1/ I've been trying to re-check my thesis, particularly around FSD given the disclosures in Q4. I had been assuming a take rate of around 30% for the last several quarters. I dug into the 10-Qs to spread the historic current portion of automotive deferred revenue... 2/ then combined that information with a bunch of other known or reasonably-estimable data points which we've learned over time to calculate an estimated addition to the current automotive deferred revenue balance, as shown below:

A few battery day predictions (thread)

Lots of commentators have made great threads about Tesla’s potential product and technology unveilings this week. I’d like to throw in my own expectations, but specifically as they relate to Tesla’s potential business model in energy. When Tesla held autonomy day last year, they went into tremendous detail on their chip, AI and vision-based approach to autonomy. But after laying the foundation of the technology, @elonmusk then presented the business case of robotaxis.

Tesla Q3 2020 Earnings Estimate (Thread)

I’m projecting $0.79 of Adjusted EPS on deliveries of 143,000. This is higher than street estimates, but not nearly as drastically as it has been in the past. I have a lot of new followers since I last published my quarterly EPS estimates, so I thought I’d do a quick recap of my history on these posts and then dive into the specifics of my model.

Tesla’s German Energy Strategy (A Thread)

Germany has an amazing 40% penetration of renewables on its grid. But unfortunately, much of this generating capacity represents older renewables technology that was not very far along the cost curve. Many of these renewable projects were built over a decade ago, as Germany guaranteed a rate of return via above-market feed-in tariffs, which ensured the financial viability of the emerging technology.

Quick Thread on Robotaxi Market Potential

As many of you know, I'm working on my sum-of-the-parts valuation of Tesla, where I value each separate business unit individually. As I have been thinking about the market potential for robotaxis, I wondered how far this could penetrate Elon has indicated that the price consumers would pay would be over $1 per mile. Given Uber and Lyft pricing which is closer to $2, that seems quite reasonable to me. However, when we start thinking in the longer term, in a future where Tesla is selling 10M+ vehicles...

🚨FSD Upgrade Case Study (A Very Long Thread)🚨

Dutch EV Lease Operator MisterGreen offered its customers a subscription-based FSD option.

Within just 2 weeks, a staggering 20% of its users upgraded. When it comes to making estimates for Tesla’s future growth, most Wall Street analysts completely miss the potential of FSD. FSD will continue to see higher pricing and take-rates going forward, as the functionality and value offered to its customers increases.

Q2 and FY 2020 Projections Update (Thread)

I'm projecting GAAP NI of $166M, adjusted EPS of $2.30, and for most analysts to be utterly confused about how Tesla pulled off these kind of numbers during a pandemic when their primary plant was shut down for half the quarter. My delivery estimate is 100,500 units as discussed in the thread linked below. If you think this is too high, please hold that thought, as we'll do a sensitivity with lower deliveries at the end. What I really want to walk through in detail is FSD.

https://twitter.com/MatchasmMatt/status/1275160126081708032

Quick Thread on V2G

I won't have the time required to do an "energy markets primer" this week, because it will be way too long, so maybe I can chop it into a few separate pieces. Let's start off with a response to some of the V2G predictions from someone in the industry. @NYKChannel and @HyperChangeTV recently put out great videos on the potential for Tesla to offer Vehicle To Grid (V2G) services as a way to generate additional cash flow for Tesla and/or the vehicle owner.

To all the Tesla bulls out there, of which I am certainly one, please know that the Energy market is way more complicated than most of you realize. The Hornsdale project with its 2 year payback is incredibly case-specific and will not be replicated en masse... IRRs for commercial battery storage are right now lower than the cost of capital for most players (read value destroying) but companies are doing it anyway because they know batteries will play a bigger role in the future...