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>Assuming a 15% net margin for Tesla Your model assumes a profit margin 3-4x the most profitable auto companies in the world? You do realize Tesla's best ever
by itsoktocry 6y ago
>Assuming a 15% net margin for Tesla
Your model assumes a profit margin 3-4x the most profitable auto companies in the world? You do realize Tesla's best ever profit margin was less than 2%, and that didn't come from selling cars, right?
>Essentially, the back of my envelope says long buyers today will need to hold for 4 years to see a profit based on some semblance of fundamentals.
A profit how, by selling their shares to other people? Why would those people buy at that valuation?
- 11thEarlOfMar 6y agoAAPL net earnings for 2020 was 30%. AMZN had almost no Net Profit their entire existence, because they were reinvesting in growth. Once their growth slows, you can expect them to show higher Net Margins. The key for high growth companies is Gross Margins. The higher the gross, the more they can reinvest. And, the higher their net margins will be once the growth slows. Tesla is vertically integrated. That means they don't need to share profit with a supply chain to the same extent as the incumbents. Hence, I split the difference between the incumbents and Apple's net profit. Feel free to adjust the numbers to what you speculate the future holds. You'll get a different time horizon that will likely be even more ridiculous.
- xkjkls 6y ago> AAPL net earnings for 2020 was 30%. Apple is not in the auto industry. Their margins are not comparable to auto companies. > AMZN had almost no Net Profit their entire existence, because they were reinvesting in growth. Once their growth slows, you can expect them to show higher Net Margins. Amazon did not need nearly as many capital injections as Tesla has over its existence, and acting as though the Amazon story was slowing growth rather than AWS is missing alot.