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>Everyone knows the railroads will have periods of very high CapEx I've seen analysis that demonstrates that even if Tesla weren't spending elevated levels of
by forgetsusername 10y ago
>Everyone knows the railroads will have periods of very high CapEx
I've seen analysis that demonstrates that even if Tesla weren't spending elevated levels of CapEx, and were instead spending industry average (about 5% of revenue), they'd still be losing upwards of $10k per car.
There's this sentiment that gets going that "numbers don't mean anything", and thus people are willing to buy shares in companies like TSLA at any price because "it's growing". And, sure, it's difficult to predict what a fast growing company will look like in 5, 10, 20 years. But you can model such things based on potential revenues and margins and market cap and other financial metrics. We have tons of data from tons of companies. And we know there are reasonable limitations (Tesla won't sell a trillion cars, for example).
Has anyone here ever modelled what "best-case" TSLA looks like? What do you think shares are worth?
- semi-extrinsic 10y agoIf you compare to established, successful car companies like Ford or Honda, the best case scenario for TSLA is of the order of 2x-5x increase in market cap. And you might see more dilution to get the Model 3's rolling. So buying TSLA today isn't like buying Apple in 2005, but it might be like buying Apple in 2012.
- askafriend 10y agoThings get interesting if you look at $TSLA as an energy company of which cars is just one component.
- marvin 10y agoThere will be plenty of additional dilution if Tesla is successful, and not just for Model 3. Tesla's manufacturing ambitions and capital requirements are huge; the company will not be satisfied until they are selling millions of cars per year and selling much more battery storage per year than most casual observers would think reasonable. In a low interest-rate climate, this is a great situation to be in. With that in mind, the best-case possible market cap ceiling is much greater than 5x the current. Tesla is not limited to car manufacturing only. And even then, the best-case scenario leaves a hole in car manufacturing capacity as some of the existing car manufacturers are unable to adapt to a future where electric vehicles will be obviously better than fossil-powered for most use cases.