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Analysis of Tesla (#TSLA) – an American company that manufactures electric vehicles and solutions for electric energy storage.

Analysis of Tesla (#TSLA) – an American company that manufactures electric vehicles and solutions for electric energy storage.

10 February 2021

Tesla is an American company that makes electric vehicles and (through its subsidiary SolarCity) storage solutions for electrical energy. The company also sells electric vehicles on credit and provides after-sales services such as repairs and insurance. Tesla’s lineup currently consists of four models (S, 3, X, Y).

The main competitors of the company are both small manufacturers of electric cars (NIO, Nikola) and global concerns that are planning to enter a new market (Toyota, Ford, GM). Tesla differs from competitors in its high customer focus.

Q4 Revenue: $ 10.8B (+ 46% YoY)

Q4 Operating Income: $ 575M (+ 60% YoY)

Q4 Net Income: $ 270M (+ 157% YoY)

Earnings per share last quarter: $ 0.80, below the $ 1.03 forecast

In recent years, the company has been actively increasing sales volumes and net profit.

Geographical distribution of revenue in 2019:

United States – 68.68%

China – 16.17%

Netherlands – 8.63%

Norway – 6.52%

EPS forecast for the current quarter: $ 0.75

Valdis Waldorfs, Head of Trading at Aravana Capital Management, comments: “I have a double impression of Tesla. I have believed in the company ever since Musk announced his plans to build three gigafactories on three three continents in 2014. Since then, I understood the company’s plan and ambitions. Now we are seeing a crazy hype around paper. Nobody needed them at 100/200/300, now everyone wants it at 800. All this is repeated too often, which is not even fun anymore. A logical continuation of this tale will be – correction to the levels of 500/400, if it happens now. But the final potential, I consider the equalization of capitalizations with AAPL. If you look at the current levels, this is + 300%. Therefore, we are waiting for the correction and boldly enter. “

The company became one of the most talked about in 2020 – despite the protracted crisis, the company’s securities have grown more than 5 times. In the past few quarters, despite analyst forecasts, Tesla has consistently posted bottom line. It should be noted that the company receives quite serious government support, since its cars do not emit harmful emissions into the atmosphere (about 7% of the company’s revenue). And the company’s management is actively investing in research and development to delight consumers with new models.

Thus, the company is truly capable of showing positive profits and is operating in a potentially profitable sector. However, it is worth considering how justified the current share price of the company is, because soon the competition in the electric vehicle market may intensify.

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