ok so ive been looking at tesla numbers for a while now and i keep seeing the same bullshit narrative that this is still a "growth stock" priced for disruption. lets talk about why that makes no sense at current levels.
first, the DCF. if you actually sit down and model this thing out with any reasonable assumptions, the stock doesnt make sense. right now tesla trades at something like 80-90x forward earnings. to justify that multiple you need to assume sustained revenue growth of like 25-30% per year for the next 10 years AND margin expansion AND robotaxi/FSD becoming a meaningful revenue stream. thats not investing, thats theology. a basic DCF with 15% terminal growth and a 10% discount rate still spits out a fair value somewhere in the $180-210 range. the market is pricing in scenarios that require everything to go right simultaneously.
revenue side - 2024 was actually bad. deliveries came in around 1.79 million, first annual decline in company history. automotive revenue is under pressure, price cuts destroyed margins, and energy generation picked up some slack but its not the core thesis wall street sold people on. you cant grow into a $600B+ enterprise value off energy storage and solar. the auto business has to carry the weight and right now its stumbling.
speaking of enterprise value, this is where it gets almost comical. EV/EBITDA is somewhere north of 50x. legacy automakers trade at 3-6x. yes tesla is "different" but at what point does the premium disconnect from reality. ford and gm are not going to zero, they have EVs too now, they have manufacturing scale, dealer networks, fleet relationships. teslas competitive moat is narrowing every single quarter.
the 1999-2001 comparison is something i keep coming back to. everyone said cisco was different. everyone said [pets.com](http://pets.com) had first mover advantage. the companies with genuinely revolutionary tech (amazon, google) survived but got cut 80-90% before recovering. the ones that were priced for a future that arrived slower than expected got destroyed and never came back. tesla is not amazon circa 1999. amazons core business model worked at small scale and got better with scale. teslas core business is selling cars at thinner margins every year.
buffett has never touched this stock and hes been fairly explicit about why. doesnt like the competitive dynamics, doesnt see a durable moat the way he defines it. he passed on it at every price point. people like to say "well buffett missed amazon" as if that makes tesla the same thing. buffett also missed a lot of frauds and avoided them too. his absence here is not nothing.
balance sheet is actually fine, cash position is decent, not a credit risk. but that almost makes it worse because the bull case has to come entirely from future earnings expansion that isnt showing up yet. net income margins have compressed. capex is high. FCF yield at current prices is under 2%. you're essentially lending this company money for 2% while taking on the risk that robotaxi regulation, competition, elon distraction, and macro all resolve perfectly.
my PT is $190 and i think thats generous. if multiples compress to 40x forward (still a massive premium to anything else in auto) and earnings estimates come down another 10-15% from current levels, you get there pretty quick. catalyst would be another weak delivery quarter, or just a broader multiple compression event in high-PE names.
not short because the borrow cost is annoying and elon can tweet something and gap it up 15% on nothing. but i wouldnt be long here either.
edit: yes i know about optimus. no i dont think a robot thats currently folding shirts in a factory is worth $200B in incremental EV right now. come back to me when theres a customer and a unit economics model.