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Tesla, Inc. (TSLA)

December 11, 2024Overvalued

Compared to: General Motors Co. (GM) | Uber Technologies, Inc. (UBER) | Consumer Discretionary Select Sector SPDR Fund (XLY)

Key takeaways

Tesla's current valuation appears moderately overvalued based on its high P/E and P/S ratios compared to industry averages, despite strong growth metrics. While the company's innovation leadership and expanding market share support a premium valuation, the current price seems to be pricing in an overly optimistic scenario, leaving little room for potential setbacks or increased competition.

  • Tesla's Q3 2024 earnings exceeded EPS expectations but missed revenue targets, highlighting a mixed performance despite a significant stock price surge following the US presidential election.
  • The unveiling of the Cybercab generated significant short-term negative market reaction due to a lack of detail, underscoring the importance of clear communication and realistic timelines for new product launches.
  • Tesla's stock price has experienced extreme volatility in recent months, driven by a combination of earnings reports, product announcements, and political developments, highlighting the importance of a long-term investment strategy.
  • Despite challenges in maintaining market share and profitability, Tesla's strong cash position and technological advancements in AI and autonomous driving suggest potential for long-term growth.
  • The incoming Trump administration's policies could significantly impact Tesla's future, potentially creating a more favorable regulatory environment but also posing risks related to EV tax credits and trade relations.
  • Tesla's EV/EBITDA and EV/Sales ratios are consistently above the industry average, suggesting that the company is trading at a premium valuation compared to its peers.
  • Tesla's financial health is strong, with high profitability, strong cash flow, and a solid balance sheet. The company's growth potential is significant, but it faces challenges in maintaining market share and profitability amid increasing competition.
  • Key factors for Tesla's future performance include the success of its new products, the regulatory environment for autonomous driving, and the overall macroeconomic environment.
  • Stakeholders should continue to monitor Tesla's financial performance, its progress on its strategic initiatives, and its exposure to legal and regulatory risks.
  • Tesla's investment profile is characterized by high growth potential, but also significant risks. The company's valuation is high, and its stock price has been volatile. Investors should approach Tesla with a balanced perspective, considering both the potential for significant growth and the substantial risks involved.
Evaluation summary
  1. Company Overview:

    • Tesla, Inc. (TSLA) is a leading electric vehicle (EV) and clean energy company that designs, develops, manufactures, sells, and leases high-performance fully electric vehicles, solar energy generation and storage systems, and offers related services. The company operates in two main segments: Automotive and Energy Generation and Storage.
    • Tesla's key products include the Model 3, Model Y, Model S, Model X, Cybertruck, and energy storage products like Powerwall and Megapack. The company sells vehicles directly to customers through an international network of company-owned stores and galleries.
    • Tesla competes with established automakers as well as new entrants in the electric vehicle and clean energy markets. The company is benchmarked against the Consumer Discretionary Select Sector SPDR Fund (XLY) and compared to industry peers General Motors Co. (GM) and Uber Technologies, Inc. (UBER).
  2. Financial Performance:

    • Tesla's revenue has been growing steadily, reaching $25.18 billion in the third quarter of 2024. The company's net income has also been increasing, reaching $2.17 billion in the third quarter of 2024.
    • Tesla's gross profit margin has been consistently above the industry average, reaching 19.84% in the third quarter of 2024. The company's net profit margin has also been significantly higher than the industry average, reaching 8.61% in the third quarter of 2024.
    • Tesla's ROA, ROE, and ROIC have been consistently above the industry average, indicating strong asset utilization efficiency and profitability. The company's ROA reached 11.92% in the third quarter of 2024, while its ROE reached 20.65% and its ROIC reached 18.38%.
    • Recent news highlights the company's strong Q3 earnings, exceeding EPS estimates, but revenue slightly missed expectations. The stock price has experienced significant volatility, with a dramatic surge following the election of Donald Trump, but also facing declines due to concerns about the Robotaxi event and other factors.
  3. Operational Efficiency:

    • Tesla's working capital has been increasing, reaching $25.8 billion in the third quarter of 2024. This suggests that the company is investing in its growth, but it also raises concerns about potential inefficiencies in working capital management.
    • Tesla's net operating cash flow has been strong, reaching $6.25 billion in the third quarter of 2024. The company's free cash flow margin has also been positive, reaching 0.11% in the third quarter of 2024.
    • Tesla's capital expenditures have been increasing, reaching $3.51 billion in the third quarter of 2024. This reflects the company's commitment to expanding its manufacturing capacity and product portfolio.
    • Tesla has not paid dividends or repurchased shares in recent quarters. The company's focus on growth and expansion suggests that it is unlikely to return capital to shareholders in the near future.
    • Tesla's liquidity ratios are strong, with a current ratio of 1.84 and a quick ratio of 1.37 in the third quarter of 2024. This indicates that the company has ample liquidity to meet its short-term obligations.
    • Tesla's debt-to-equity ratio has been decreasing, reaching 18.28% in the third quarter of 2024. This suggests that the company is managing its debt levels effectively.
  4. Growth Opportunities:

    • Tesla is aggressively expanding its manufacturing capacity and product portfolio to drive growth. The company has announced the location of a new Gigafactory in Monterrey, Mexico, to expand its global manufacturing capacity.
    • Tesla is investing heavily in R&D for autonomous driving, battery technology, and manufacturing improvements. The company's R&D spending is expected to exceed $10 billion in 2024.
    • Tesla is expanding into new geographic markets, with a particular focus on China, where the company has seen strong growth. The company is also expanding its presence in Europe and other regions.
    • Tesla's current strategic focus areas include the development and launch of more affordable vehicle models, the ramp-up of Cybertruck production, the continued expansion of the energy storage business, significant advancements in FSD technology, the rollout of a ride-hailing service, and substantial investments in AI compute infrastructure.
    • Tesla is making progress on its previously announced initiatives, such as the development of the Cybertruck and the expansion of its Supercharger network.
    • Tesla's capital allocation strategies are focused on investing in growth opportunities, such as expanding its manufacturing capacity, developing new products, and investing in R&D.
  5. Recent Developments and Market Sentiment:

    • Tesla's Q3 2024 earnings exceeded EPS expectations but missed revenue targets, highlighting a mixed performance despite a significant stock price surge following the US presidential election.
    • The unveiling of the Cybercab generated significant short-term negative market reaction due to a lack of detail, underscoring the importance of clear communication and realistic timelines for new product launches.
    • Tesla's stock price has experienced extreme volatility in recent months, driven by a combination of earnings reports, product announcements, and political developments, highlighting the importance of a long-term investment strategy.
    • Despite challenges in maintaining market share and profitability, Tesla's strong cash position and technological advancements in AI and autonomous driving suggest potential for long-term growth.
    • The incoming Trump administration's policies could significantly impact Tesla's future, potentially creating a more favorable regulatory environment but also posing risks related to EV tax credits and trade relations.
  6. Risks and Threats:

    • Tesla faces challenges in maintaining market share amid increasing competition from established automakers and new entrants in the EV market.
    • The ambitious timelines for Tesla's autonomous vehicle technology pose significant risks, particularly regarding safety, regulatory approvals, and public acceptance.
    • Tesla's high valuation raises concerns about potential overvaluation and the risk of a significant stock price correction if growth expectations are not met.
    • The ongoing legal challenges faced by Tesla, including lawsuits related to trade secrets and Elon Musk's compensation package, create uncertainty and could negatively impact investor sentiment.
    • Tesla's reliance on regulatory credits for a portion of its revenue creates a risk of reduced profitability if these credits are phased out or reduced.
    • The NHTSA's investigation into Tesla's Full Self-Driving software raises serious safety concerns, which could hinder Tesla's ambitions in autonomous driving and negatively impact investor confidence.
  7. Valuation Analysis:

    • Tesla's EV/EBITDA ratio has been consistently above the industry average, reaching 66.67 in the third quarter of 2024. This suggests that the company is trading at a premium valuation compared to its peers.
    • Tesla's EV/Sales ratio has also been above the industry average, reaching 9.21 in the third quarter of 2024. This further supports the conclusion that the company is trading at a premium valuation.
    • Potential catalysts for Tesla's valuation include the successful launch of its new products, such as the Cybertruck, and the continued growth of its energy storage business.
  8. Price Performance:

    • Tesla's stock price has experienced significant volatility in recent months, with a dramatic surge following the election of Donald Trump, but also facing declines due to concerns about the Robotaxi event and other factors.
    • Tesla's stock price has outperformed the Consumer Discretionary Select Sector SPDR Fund (XLY) in recent months, but it has been more volatile.
    • Tesla's stock price has also outperformed its peers, General Motors Co. (GM) and Uber Technologies, Inc. (UBER), in recent months.
  9. Future Outlook:

    • Tesla's management has projected vehicle sales growth of 20% to 30% for 2025. The company also expects its internally produced 4680 battery cells to become the most cost-competitive in North America.
    • Analysts are divided on Tesla's future prospects, with some expressing optimism about long-term growth driven by autonomous technology, while others caution against overvaluation.
    • Recent news suggests that Tesla's future performance will be influenced by the success of its new products, the regulatory environment for autonomous driving, and the overall macroeconomic environment.
  10. Summary:

    • Tesla is a leading electric vehicle and clean energy company with a strong financial performance, high profitability, and a solid balance sheet. The company is aggressively expanding its manufacturing capacity and product portfolio to drive growth, but faces intensifying competition as the industry rapidly evolves.
    • Tesla's strengths include its strong brand, its technological leadership in electric vehicles, autonomous driving, and energy storage, and its strong financial position.
    • Tesla's weaknesses include its high valuation, its reliance on regulatory credits, and its exposure to legal and regulatory risks.
    • Tesla's opportunities include the continued growth of the electric vehicle market, the development of new products and technologies, and the expansion into new geographic markets.
    • Tesla's threats include increasing competition, regulatory changes, and macroeconomic uncertainties.
    • Tesla's financial health is strong, with high profitability, strong cash flow, and a solid balance sheet. The company's growth potential is significant, but it faces challenges in maintaining market share and profitability amid increasing competition.
    • Key factors for Tesla's future performance include the success of its new products, the regulatory environment for autonomous driving, and the overall macroeconomic environment.
    • Stakeholders should continue to monitor Tesla's financial performance, its progress on its strategic initiatives, and its exposure to legal and regulatory risks.
    • Tesla's investment profile is characterized by high growth potential, but also significant risks. The company's valuation is high, and its stock price has been volatile. Investors should approach Tesla with a balanced perspective, considering both the potential for significant growth and the substantial risks involved.
Price history
Fundamentals
Insights
  • Tesla's financial performance is strong, with high profitability, strong cash flow, and a solid balance sheet.
  • The company is aggressively expanding its manufacturing capacity and product portfolio to drive growth, but must navigate supply chain constraints, regulatory changes, and macroeconomic uncertainties.
  • Tesla's heavy investment in autonomous driving, battery technology, and manufacturing innovation could provide long-term competitive advantages, but also carries significant execution risks.
  • The company's financial performance has been strong, but margins may face pressure from pricing competition and cost inflation.
  • Ongoing legal proceedings and regulatory investigations pose legal and reputational risks that require close monitoring.
Analysis
  • Revenue - Tesla's revenue growth is moderate, but the company is still experiencing growth. - Key revenue drivers include record vehicle deliveries, strong growth in the energy storage business, and increased revenue from Full Self-Driving (FSD) features. - The Chinese market is outperforming the US and European markets, suggesting future growth potential in other regions.
    • Profitability
      • Tesla's profitability is strong and increasing, as evidenced by its increasing gross margin, operating margin, and net margin.
      • The company's profitability is significantly above the industry average, highlighting its strong competitive position.
      • Tesla's focus on cost reduction and efficiency is contributing to its strong profitability.
    • Liquidity
      • Tesla has a strong liquidity position, with a current ratio and quick ratio above the industry average.
      • The company's liquidity position is improving, as evidenced by the increasing current ratio and quick ratio.
      • Tesla's strong liquidity position provides it with flexibility to pursue its growth strategy and navigate potential economic challenges.
    • Solvency
      • Tesla has a strong solvency position, with a low debt-to-equity ratio and debt/EBITDA below the industry average.
      • The company's solvency position is improving, as evidenced by the decreasing debt-to-equity ratio and debt/EBITDA.
      • Tesla's strong solvency position provides it with the capacity to repay debt, invest in organic growth opportunities, and potentially return capital to shareholders.
    • Operational Efficiency
      • Tesla's asset utilization efficiency is improving, as evidenced by the increasing return on assets and return on equity.
      • The company's efficiency is driven by its focus on cost reduction and operational improvements.
    • Cash Flow Analysis
      • Tesla's cash flow is strong, with a high net operating cash flow and free cash flow margin.
      • The company is investing heavily in capital expenditures, reflecting its commitment to expanding its manufacturing capacity and product portfolio.
      • The company's cash flow is expected to continue to grow in the coming quarters, driven by its strong profitability and expansion plans.
    • Risk Factors
      • The company's aggressive expansion plans, including the construction of new Gigafactories and the development of new products, carry significant execution risks.
      • The company's reliance on suppliers, including single-source suppliers, and potential supply chain disruptions pose a risk to its operations.
      • Potential product quality issues, defects, or safety concerns could damage the company's reputation and financial performance.
      • Ongoing legal proceedings and regulatory investigations pose legal and reputational risks that require close monitoring.
    • Future Outlook
      • Tesla's future outlook is positive, with strong revenue growth, profitability, and cash flow expected to continue.
      • The company's strategic initiatives, such as the development and launch of more affordable vehicle models, the ramp-up of Cybertruck production, and the continued expansion of the energy storage business, are expected to drive future growth.
      • The company's strong financial position provides it with the flexibility to pursue its growth strategy and navigate potential economic challenges.
Financial statements
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Public filings
  • Tesla is a leading electric vehicle and clean energy company, but faces intensifying competition as the industry rapidly evolves
  • The company is aggressively expanding its manufacturing capacity and product portfolio to drive growth, but must navigate supply chain constraints, regulatory changes, and macroeconomic uncertainties
  • Tesla's heavy investment in autonomous driving, battery technology, and manufacturing innovation could provide long-term competitive advantages, but also carries significant execution risks
  • The company's financial performance has been strong, but margins may face pressure from pricing competition and cost inflation
  • Ongoing legal proceedings and regulatory investigations pose legal and reputational risks that require close monitoring

Core Business and Operations:

  • Tesla designs, develops, manufactures, sells and leases high-performance fully electric vehicles, solar energy generation and storage systems, and offers related services
  • Key products include the Model 3, Model Y, Model S, Model X, Cybertruck, and energy storage products like Powerwall and Megapack
  • Operates in two main segments: automotive and energy generation/storage
  • Sells vehicles directly to customers through an international network of company-owned stores and galleries
  • Competes with established automakers as well as new entrants in the electric vehicle and clean energy markets

Industry and Market Trends:

  • Electric vehicle adoption is increasing globally, driven by environmental regulations, consumer demand, and technological advancements
  • Competition is intensifying as more automakers introduce new electric vehicle models
  • Regulatory incentives and policies around electric vehicles, renewable energy, and emissions reductions can significantly impact the market
  • Supply chain constraints, inflation, and macroeconomic conditions pose challenges for the industry

Recent Events:

  • Announced the location of a new Gigafactory in Monterrey, Mexico to expand global manufacturing capacity
  • Opened up the previously proprietary Supercharger connector as the North American Charging Standard (NACS), enabling other automakers to access the network
  • Launched a new robotaxi product leveraging the company's autonomous driving technology
  • Converted the company from a Delaware to Texas corporation

Risk Factors:

  • Ability to successfully ramp production and deliveries of new products and features
  • Reliance on suppliers, including single-source suppliers, and potential supply chain disruptions
  • Potential product quality issues, defects, or safety concerns
  • Exposure to fluctuations in foreign currency exchange rates
  • Ability to attract and retain key personnel
  • Ongoing legal proceedings and regulatory investigations

Legal Matters:

  • Facing various lawsuits related to the 2018 CEO compensation plan, potential going-private transaction, alleged discrimination and harassment, and product/service claims
  • Cooperating with ongoing investigations by government agencies on a range of operational and compliance matters

Management's Discussion and Analysis:

  • Focused on profitable growth through capacity expansion, cost reduction, and new product introductions
  • Investing heavily in R&D for autonomous driving, battery technology, and manufacturing improvements
  • Generating positive operating cash flow to fund growth, with capital expenditures expected to exceed $10 billion in 2024
  • Facing headwinds from macroeconomic conditions, supply chain challenges, and competitive pressures impacting pricing and margins
Earnings calls

Earnings Report 2024Q3 (2024-10-23)

Key takeaways
  1. Strong Financial Performance Despite Industry Headwinds: Tesla's record Q3 results demonstrate resilience in a challenging automotive market, highlighting its strong competitive position.
  2. Autonomous Driving as a Key Differentiator: Significant progress in FSD technology is crucial for Tesla's future growth and competitive advantage, potentially transforming the company into a mobility services provider.
  3. Cost Management and Efficiency are Critical: Tesla's focus on cost reduction across all segments is essential for maintaining profitability and achieving its ambitious growth targets.
  4. Regulatory Landscape Presents Both Challenges and Opportunities: Navigating the fragmented regulatory landscape for autonomous vehicles is a key challenge, but successful approvals could unlock significant market potential.
  5. Strategic Diversification Beyond Vehicles: Tesla's expansion into energy storage and AI positions the company for long-term growth and diversification beyond its core automotive business.
  6. Investor Uncertainty Regarding xAI's Impact: The lack of clarity regarding the relationship between Tesla and xAI raises concerns among investors about resource allocation and potential conflicts of interest.
  7. China Market as a Growth Engine: The significant outperformance of the Chinese market suggests a strong growth trajectory for Tesla in other regions as EV adoption increases.
Focus of management’s prepared remarks
  • Record Q3 Performance and Profitability: Tesla achieved record deliveries and profitability in Q3 2024, exceeding expectations despite a challenging automotive market.
  • Growth in Energy Storage: Strong demand for Megapack and Powerwall is driving significant growth in the energy storage business.
  • Autonomous Driving Progress: Significant advancements in FSD technology are expected, with a target of surpassing human driving safety by Q2 2025. The October 10th event showcased autonomous vehicle capabilities.
  • Affordable Vehicle Models: Tesla remains on track to deliver more affordable models starting in the first half of 2025, aiming for a sub-$30,000 price point with incentives.
  • Cybertruck Production: Volume production of the Cybertruck is anticipated to begin in 2026, with a target of at least 2 million units per year.
  • 4680 Battery Cell Cost Competitiveness: Tesla's internally produced 4680 battery cells are nearing cost competitiveness with other alternatives in North America.
  • Expansion of Ride-Hailing: Tesla plans to launch a ride-hailing service in California and Texas in 2025, subject to regulatory approvals.
  • Long-Term Vision: Tesla's long-term vision encompasses sustainable energy, transportation, robotics, and AI, positioning the company for future growth and market leadership.
Focus of the analyst Q&A
  • Affordable Model Timeline and Alignment with AI Roadmap: Analysts inquired about the timeline for the more affordable model and its integration with Tesla's AI product roadmap. Concerns were raised about the availability of a $25,000 non-robotaxi model.
  • Service Center Wait Times: Analysts sought an update on Tesla's efforts to reduce long wait times at service centers.
  • Tesla Semi Update: Analysts requested an update on the Tesla Semi's production timeline, growth prospects, and the integration of FSD.
  • Integration of X and Grok into Tesla Vehicles: Analysts asked about the timeline for integrating X and Grok into Tesla vehicles.
  • Regulatory Approvals for Unsupervised FSD: Analysts questioned the status of regulatory approvals for unsupervised FSD in California and Texas, clarifying whether approval extends to all existing Model 3 and Y vehicles.
  • Tesla's 2025 Plans: Analysts sought a detailed overview of Tesla's plans for 2025.
  • Tesla Roadster Update: Analysts requested an update on the Tesla Roadster's development and launch timeline.
  • Robotaxi Rollout Strategy: Analysts inquired about the planned rollout strategy for robotaxis, including the use of Tesla's own fleet versus customer-owned vehicles and the compatibility with Hardware 3.
  • Relationship Between Tesla and xAI: Analysts sought clarification on the relationship between Tesla and xAI, addressing concerns about potential competition for talent, technology, and Elon Musk's time. The question highlighted investor uncertainty regarding the benefits of xAI to Tesla.
Summary
  1. Financial Performance

Tesla reported record Q3 2024 deliveries despite year-over-year industry declines in order volumes. The company achieved record Q3 results and generated record operating cash flows of $6.3 billion. Automotive revenues grew both quarter-over-quarter and year-over-year, although average selling prices (ASPs) decreased due to financing incentives. Energy storage business showed strong growth in demand for Megapacks and Powerwalls. Specific financial figures regarding profitability and margins are provided in the call but not explicitly stated as exceeding or falling short of analyst expectations.

  1. Revenue Drivers

Key revenue drivers included record vehicle deliveries, strong growth in the energy storage business, and increased revenue from Full Self-Driving (FSD) features ($326 million in Q3), including the release of FSD for Cybertruck and Actually Smart Summon. Elevated levels of regular 2-week credit sales also contributed significantly ($2 billion YTD). The Chinese market outperformed the US and European markets by a factor of three, suggesting future growth potential in other regions.

  1. Profit Margins and Cost Management

Automotive margins improved quarter-over-quarter due to increased production and delivery volume, favorable pricing, and localized deliveries. However, sustaining these margins in Q4 is expected to be challenging. Energy margins reached a record of over 30% in Q3, although fluctuations are anticipated. Tesla emphasized cost reduction efforts, aiming to lower the cost per vehicle and per megawatt-hour without compromising customer experience. The company achieved its lowest cost per kilowatt-hour in Q3.

  1. Guidance and Outlook

Management projected vehicle sales growth of 20% to 30% for 2025, barring unforeseen events. Cybertruck volume production is anticipated to begin in 2026, aiming for at least 2 million units annually, potentially reaching 4 million. Tesla expects its internally produced 4680 battery cells to become the most cost-competitive in North America. The company anticipates significant improvements in Full Self-Driving (FSD) capabilities, projecting that FSD will achieve safer-than-human driving performance by Q2 2025. Expansion of ride-hailing services in California and Texas is planned for 2025, subject to regulatory approvals. Capital expenditures (CapEx) for 2024 are expected to exceed $11 billion, largely due to investments in AI compute.

  1. Strategic Initiatives

Key strategic initiatives include the development and launch of more affordable vehicle models (sub-$30,000 with incentives), the ramp-up of Cybertruck production, the continued expansion of the energy storage business, significant advancements in FSD technology, the rollout of a ride-hailing service, and substantial investments in AI compute infrastructure. Tesla is also focusing on improving service center efficiency and expanding its network. The company highlighted its vertically integrated approach, controlling vehicle production, service, and software development.

  1. Management Commentary

Management expressed confidence in Tesla's performance and future prospects, emphasizing its profitability in a challenging automotive market and its technological leadership in electric vehicles, autonomous driving, and energy storage. The overall tone was optimistic, projecting significant growth and market dominance. Elon Musk repeatedly highlighted the transformative potential of autonomous driving and the long-term value of Optimus (humanoid robot).

  1. Industry and Market Conditions

Tesla acknowledged a challenging automotive environment with declining order volumes across the industry. Management noted that most EV companies are unprofitable, highlighting Tesla's unique position. The company believes that declining interest rates could positively impact automotive demand. The impact of macroeconomic factors, such as interest rates and geopolitical events, was acknowledged as a potential risk.

News evaluation

Sentiment rating:Mixed

Dec 04, 2024
Summary

Tesla's recent performance presents a mixed outlook. While the company reported strong Q3 earnings, exceeding EPS estimates with a 72-cent EPS, revenue slightly missed expectations, highlighting inconsistencies. The stock price has experienced significant volatility, with a dramatic surge following the election of Donald Trump adding approximately $110 billion to its valuation, but also facing declines due to concerns about the Robotaxi event leading to an 8% stock drop and other factors. Analysts remain divided, with some expressing optimism about long-term growth driven by autonomous technology with predictions of a $2,600 share price by 2029, while others caution against overvaluation with price targets significantly below current levels. The potential for regulatory changes under the new administration could significantly impact Tesla's future, creating both opportunities and risks with potential benefits in autonomous driving but also concerns about the elimination of EV tax credits potentially impacting sales. The company's ambitious plans for autonomous vehicles and a shift towards software revenue represent significant long-term opportunities, but the timelines for achieving these goals remain uncertain. Overall, investors should approach Tesla with a balanced perspective, considering both the potential for significant growth and the substantial risks involved.

Key takeways
News
Analysis
Trends
Risk factors
Comparative analysis
Benchmarks (as of 2024-12-11)
Consumer Discretionary Select Sector SPDR Fund (XLY)
  • Performance Comparison:
    • The provided data does not include TSLA's historical performance data. Therefore, we cannot compare the historical performance of TSLA to XLY.
  • Risk and Return Analysis:
    • The provided data does not include TSLA's annualized returns data. Therefore, we cannot compare the annualized returns of TSLA to XLY.
    • TSLA has consistently been more volatile than XLY, as indicated by its higher annualized volatility. This suggests that TSLA is a riskier investment than XLY.
    • TSLA has experienced significantly larger drawdowns than XLY. This further supports the conclusion that TSLA is a riskier investment than XLY.
  • Risk-Adjusted Performance:
    • XLY has consistently shown a higher Sharpe ratio than TSLA throughout the period. This indicates that XLY has better risk-adjusted returns than TSLA.
    • TSLA's high beta indicates that it is a riskier investment than XLY. This means that TSLA's price is likely to fluctuate more than XLY's price in response to market movements.
  • Overall Assessment:
    • Based on the available data, TSLA appears to be a riskier investment than XLY. TSLA has higher volatility, larger drawdowns, and a lower Sharpe ratio than XLY. However, TSLA's volatility has been decreasing in recent months, which may suggest that it is becoming less risky.
    • The provided data does not include TSLA's historical performance data or annualized returns data. Therefore, we cannot provide a comprehensive assessment of TSLA's performance relative to XLY.
Peers Price History(as of 2024-12-11)
  • Performance Comparison:
    • TSLA data is missing for all periods. GM has consistently outperformed UBER over the past three years, with the exception of the 2-year and 3-year periods where UBER outperformed GM.
    • GM's performance has been more consistent than UBER's over the past three years.
  • Risk and Return Analysis:
    • TSLA data is missing for all periods. GM has provided higher returns than UBER over the past three years, with the exception of the 2-year and 3-year periods where UBER outperformed GM.
    • TSLA data is missing for all periods. GM has been less volatile than UBER over the past three years.
    • TSLA data is missing for all periods. GM's maximum drawdown was 57.87% on 10/30/2023, while UBER's maximum drawdown was 67.62% on 6/30/2022. This indicates that GM has a lower risk profile than UBER.
  • Risk-Adjusted Performance:
    • TSLA data is missing for all periods. GM's Sharpe Ratio has been consistently higher than UBER's Sharpe Ratio over the past three years. This indicates that GM has offered a better risk-adjusted return than UBER.
    • TSLA data is missing for all periods. GM's beta indicates that the stock is less sensitive to market movements than UBER.
  • Overall Assessment:
    • TSLA data is missing for all periods. GM has consistently outperformed UBER over the past three years, with the exception of the 2-year and 3-year periods where UBER outperformed GM. GM has also been less volatile and has offered a better risk-adjusted return than UBER. This suggests that GM may be a more attractive investment option than UBER.
    • TSLA data is missing for all periods. The data suggests that GM has a lower risk profile than UBER, but it is important to note that this analysis is based on historical data and does not guarantee future performance.
Peers Fundamentals(as of 2024-09-30)
  1. Market Position and Size:

    • TSLA is the largest company in the peer group, with a market cap significantly larger than its peers, General Motors (GM) and Uber Technologies (UBER).
    • TSLA's market cap is significantly larger than its revenue, EBITDA, and net income, suggesting that the market is placing a high premium on its future growth prospects.
    • This indicates that the market values TSLA significantly higher than its peers, likely due to its focus on electric vehicles and its perceived growth potential.
  2. Profitability and Efficiency:

    • TSLA exhibits strong profitability metrics, with higher gross profit margin, EBITDA margin, and net profit margin compared to its peers and industry averages.
    • TSLA demonstrates high efficiency in generating returns, with strong ROA, ROE, ROTC, and ROIC, indicating its ability to generate profits efficiently from its assets, equity, capital, and invested capital.
  3. Financial Health and Stability:

    • TSLA maintains a strong financial position with a very low level of debt relative to its equity and earnings, indicating a strong financial position and low risk.
    • TSLA's liquidity is lower than the industry average, suggesting that it may not be as liquid as other companies in the industry.
  4. Valuation and Market Perception:

    • TSLA's valuation is significantly higher than its peers and industry averages, suggesting that the market is placing a very high premium on its growth potential and future prospects.
    • This high valuation indicates strong growth expectations and a positive market perception of TSLA's future prospects.
  5. Cash Flow and Capital Management:

    • TSLA generates a significant amount of free cash flow, indicating a strong financial position and ability to fund future growth.
    • TSLA invests a significant amount of capital in its business, suggesting a focus on expansion and innovation.
  6. Growth and Future Prospects:

    • TSLA exhibits strong growth in profitability and cash flow generation, indicating its ability to capture market share and expand its business.
    • However, its sales growth has been decelerating, suggesting that it may be facing challenges in expanding its market share.
    • TSLA's growth trends suggest a strong competitive position and future prospects relative to its peer group.
  7. Potential for Investment:

    • TSLA's strong financial performance, high profitability, and significant free cash flow generation capabilities suggest that it is a well-positioned company with strong growth potential.
    • However, its high valuation and decelerating sales growth may be concerns for some investors.
  8. Key Risks and Considerations:

    • Decelerating sales growth: TSLA's sales growth has been slowing down, suggesting potential challenges in expanding its market share.
    • High valuation: TSLA's valuation is significantly higher than its peers and industry averages, which may make it vulnerable to market corrections.
    • Competition: The electric vehicle market is becoming increasingly competitive, with established automakers and new entrants vying for market share.
  9. Overall Assessment:

    • TSLA is a financially strong company with a dominant market position and strong growth potential.
    • However, its high valuation and decelerating sales growth are potential risks that investors should consider.
    • Overall, TSLA's financial performance and growth prospects suggest that it is a company worth watching, but investors should carefully assess its risks and valuation before making any investment decisions.
Comparison metrics