TESLA Shares Drops Like Crazy - Should You Buy Now? | Investment Series

lipkarlock Saturday, April 30, 2022
Tesla has a wild swing this week!

Because Elon Musk has made some crazy announcement about buying Twitter. 

So far, the stock has plunged about 30% for the past 1 year.

Is this the best time to buy Tesla stock?

Tesla Share Price




Tesla Financial Summary



Here is the financial summary for Tesla:






Tesla has become profitable since 2 years ago on 2019.

Looking at the Financial Quarterly Report for Tesla, here is the summary:
Total revenue grew 81% YoY in Q1 2022 to USD$18.8B. YoY, revenue was impacted by the following items: 

+ growth in vehicle deliveries
+ increased average selling price (ASP)
+ growth in other parts of the business

Tesla operating income improved to $3.6B in Q1, resulting in a 19.2% operating margin. This profit level was reached while incurring SBC expense attributable to the 2018 CEO award of $48M in Q1. YoY, operating income was primarily impacted by the following items: 

+ growth in vehicle deliveries
+ increased ASP
+ reduced cost (COGS) per vehicle despite inflationary pressures
+ lower stock-based compensation expense
+ increase in regulatory credit sales
- rising raw material, commodity, logistics and expedite costs
- increase in operating expenses



Tesla has continues to deliver more and more cars.
Model S/X and Model 3/Y deliveries is growing consistently.


The market share of Tesla cars seems to be increasing steadily as well:



One interesting observation is that Tesla sales will pick up after the Super Bowl





Here is the Cash Flow position for Tesla:


So far the cash flow from operating activities are positive.
However, the net change is still negative in Dec 2021.


Tesla Valuation - it is Currently Overvalued with Narrow Moat


Based on Morningstar rating, it is currently still overvalue though.
The Fair Value of Tesla should be about USD$750.
The last close is USD$870.76.

This is about 15% above the fair value.

So if you believe in the rating of Morningstar, it is recommended to wait for a while.

Note that Tesla Moat is also at Narrow. Actually it was better than last time.

Tesla’s moat stems from two of our five moat sources: intangible assets and cost advantage.

Previously the Moat Rating by Morningstar is only "None".

Note that more and more companies are getting into the EV market like Ford & General Motors.

At least it is better now.


If you refer to GuruFocus DCF calculation of the Fair Value, it is even Overvalued so much more.
GuruFocus only put the Fair Value atUSD140.46.

Also note that, if the business is unpredictable, DCF model may not be very accurate as well.









Happy Investing! 😉


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