Insights

• Tesla's revenue growth is impressive, but its profitability is declining, indicating that the company is facing challenges in managing its costs and maintaining its margins.
• The company's heavy investments in research and development and its aggressive growth strategy are putting pressure on profitability.
• Tesla's ability to control its costs and improve its efficiency will be crucial to its future profitability.
• Tesla's strong cash position and increasing working capital indicate a healthy short-term liquidity position.
• However, the company's high debt levels and increasing leverage raise concerns about its long-term solvency, particularly if interest rates rise or economic conditions deteriorate.
• Tesla's future prospects are highly dependent on its ability to successfully execute on its ambitious growth plans, manage its costs, and improve its efficiency.
• The company's ability to generate positive free cash flow will be crucial to its debt repayment capacity, dividend growth potential, and investment in future growth opportunities.
• Tesla's future success will also depend on its ability to navigate a complex regulatory environment and manage a wide range of operational and financial risks.

Analysis

• Revenue - Tesla's revenue growth has been consistently strong, driven by strong demand for its electric vehicles and energy storage products. - The company's expansion into new markets and its aggressive growth strategy have contributed to its revenue growth. - However, Tesla is facing challenges in maintaining its average selling prices, which is putting pressure on its profitability.
  • Profitability
    • Tesla's profitability has been declining, as its margins have been shrinking.
    • The company's heavy investments in research and development and its aggressive growth strategy are putting pressure on profitability.
    • Tesla's ability to control its costs and improve its efficiency will be crucial to its future profitability.
  • Liquidity
    • Tesla's strong cash position and increasing working capital indicate a healthy short-term liquidity position.
    • However, the company's reliance on short-term financing to fund its operations could increase its short-term liquidity risk in the future.
  • Solvency
    • Tesla's high debt levels and increasing leverage raise concerns about its long-term solvency, particularly if interest rates rise or economic conditions deteriorate.
    • The company's ability to manage its debt obligations and maintain its profitability will be crucial to its financial flexibility and strategic options in the future.
  • Operational Efficiency
    • Tesla's operational efficiency has been improving, as evidenced by its declining inventory levels and its ability to control its operating expenses.
    • However, the company's high capital expenditures and research and development costs are putting pressure on its profitability.
  • Cash Flow Analysis
    • Tesla's operating cash flow has been consistently increasing, driven by strong revenue growth and improvements in working capital management.
    • However, the company's high capital expenditures and its reliance on debt financing have contributed to its volatile cash flow patterns.
    • Tesla's ability to generate positive free cash flow will be crucial to its debt repayment capacity, dividend growth potential, and investment in future growth opportunities.
  • Risk Factors
    • Tesla's aggressive growth strategy and its reliance on debt financing could lead to higher interest expenses and potential financial distress if its profitability does not keep pace with its debt obligations.
    • The company's heavy investments in research and development and its expansion into new markets carry significant execution risks.
    • Tesla's reliance on suppliers and potential supply chain disruptions could impact its production and profitability.
    • The evolving regulatory landscape around autonomous driving and data privacy could pose challenges to Tesla's growth plans.
  • Future Outlook
    • Tesla's future prospects are highly dependent on its ability to successfully execute on its ambitious growth plans, manage its costs, and improve its efficiency.
    • The company's ability to generate positive free cash flow will be crucial to its debt repayment capacity, dividend growth potential, and investment in future growth opportunities.
    • Tesla's future success will also depend on its ability to navigate a complex regulatory environment and manage a wide range of operational and financial risks.

Benchmarks (as of 2025-02-10)

• Performance Comparison:
  • TSLA has exhibited a volatile performance history, with periods of significant outperformance and underperformance compared to XLY. While TSLA has outperformed XLY over the past year and two years, it has underperformed over the past three years and year-to-date. This suggests that TSLA's performance is not consistently better than XLY's.
• Risk and Return Analysis:
  • TSLA has generated higher annualized returns than XLY over the past year and two years, but lower returns over the past three years. This indicates that TSLA's returns are not consistently higher than XLY's.
  • TSLA has consistently exhibited higher annualized volatility than XLY, indicating a higher risk profile. This is further supported by TSLA's larger maximum drawdown compared to XLY.
• Risk-Adjusted Performance:
  • TSLA's Sharpe Ratio has been generally lower than XLY's, suggesting that XLY has offered better risk-adjusted returns.
  • TSLA's beta consistently above 1 indicates that it is more sensitive to market movements than XLY, further highlighting its higher risk profile.
• Overall Assessment:
  • TSLA has shown potential for high returns, but it comes with significantly higher risk compared to XLY. TSLA's volatility and drawdowns are significantly larger than XLY's, indicating a more volatile and less predictable investment. While TSLA's Sharpe Ratio has been improving in recent quarters, it remains lower than XLY's, suggesting that XLY offers a better risk-adjusted return. Investors seeking higher potential returns should be prepared for higher volatility and potential losses with TSLA.

Peers Price History(as of 2025-02-11)

• Performance Comparison:
  • The historical performance data for TSLA is missing, making it difficult to compare its performance to GM and UBER. However, based on the available data for GM, it has outperformed the market in the past year and two years, but has underperformed in the past three years.
• Risk and Return Analysis:
  • The annualized return data for TSLA is missing, making it difficult to compare its returns to GM and UBER. However, based on the available data for GM, it has provided higher returns than the market in the past year and two years, but has provided lower returns in the past three years.
  • TSLA has consistently had the highest volatility, with values ranging from 32.63% to 95.87% over the period. GM's volatility has been significantly lower, ranging from 20.02% to 58.88%. UBER's volatility has been in between, ranging from 18.08% to 80.03%. This indicates that TSLA is significantly more volatile than both GM and UBER.
  • TSLA has experienced the largest maximum drawdown of 73.63% on 01/03/2023. GM's maximum drawdown was 57.87% on 10/30/2023. UBER's maximum drawdown was 66.35% on 06/30/2022. This indicates that TSLA has a higher risk profile than both GM and UBER.
• Risk-Adjusted Performance:
  • TSLA has had a higher Sharpe Ratio than GM and UBER for most of the period, indicating that it has offered a better risk-adjusted return.
  • TSLA's beta has been consistently above 1, indicating that it is more volatile than the market. GM's beta has been consistently below 1, indicating that it is less volatile than the market. UBER's beta has been consistently above 1, indicating that it is more volatile than the market. This indicates that TSLA is more sensitive to market movements than both GM and UBER.
• Overall Assessment:
  • TSLA has consistently had higher volatility and a higher risk profile than both GM and UBER. However, it has also consistently had a higher Sharpe Ratio, indicating that it has offered a better risk-adjusted return. This suggests that TSLA may be a suitable investment for investors with a higher risk tolerance.
  • It is important to note that the historical performance data for TSLA is missing, making it difficult to draw definitive conclusions about its performance. However, based on the available data for GM, it has outperformed the market in the past year and two years, but has underperformed in the past three years.
  • The recent trends in volatility, drawdowns, and Sharpe Ratios suggest that TSLA may be becoming less volatile and more stable. However, it is important to monitor these trends closely to see if they continue.

Peers Fundamentals(as of 2024-12-31)

1. Market Position and Size:

   • TSLA is a dominant player in the electric vehicle market with a market capitalization 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 investors are placing a high premium on its future growth potential.
   • This large market cap reflects investor confidence in TSLA's ability to capitalize on the growing electric vehicle market.

2. Profitability and Efficiency:

   • TSLA exhibits relatively strong profitability compared to its peers, with higher Gross Profit Margin, EBITDA Margin, and Net Profit Margin than GM, but lower than UBER.
   • All three companies have significantly higher profitability metrics than the industry average.
   • TSLA's profitability is strong considering its size and revenue, indicating its ability to generate profits despite its large market cap.
   • TSLA's efficiency in generating returns from its assets, equity, total capital, and invested capital is relatively strong compared to its peers, but not as high as UBER's.

3. Financial Health and Stability:

   • TSLA demonstrates strong liquidity and a low level of debt compared to its peers, as evidenced by its higher Current Ratio, Quick Ratio, and lower Total Debt to Total Equity Ratio and Debt / EBITDA.
   • This suggests a strong financial position with a low risk of financial distress.

4. Valuation and Market Perception:

   • TSLA trades at a premium valuation compared to its peers and industry standards, reflecting investor optimism about its future growth potential and its position as a leader in the electric vehicle market.
   • This premium valuation is reflected in its high Enterprise Value To Sales, Enterprise Value To EBITDA, Price To Earnings, Price to Book Ratio, and Price To Sales Ratio.

5. Cash Flow and Capital Management:

   • TSLA's cash flow generation is relatively strong compared to its peers, with higher Net Operating Cash Flow and Free Cash Flow than UBER, but lower than GM.
   • TSLA's capital expenditure is relatively high compared to its peers, indicating its focus on investing in future growth.
   • Despite its large market cap, TSLA is able to generate a relatively high level of free cash flow.

6. Growth and Future Prospects:

   • TSLA exhibits consistently higher growth in sales/revenue, EBITDA, and free cash flow compared to the peer group average, suggesting it is outpacing its peers in terms of overall business growth.
   • TSLA's 5-year CAGR figures are significantly higher than its 3-year CAGR figures for sales/revenue, EBITDA, and free cash flow, indicating accelerating growth over the past five years.
   • This strong growth suggests that TSLA is gaining market share and expanding its operations, indicating a positive outlook for its future prospects.

7. Potential for Investment:

   • TSLA is an attractive investment for investors who are bullish on the future of the electric vehicle market.
   • Its strong growth, high valuation, and low debt suggest it is well-positioned to capitalize on the growing demand for electric vehicles.
   • However, investors should consider TSLA's lower profitability and earnings per share compared to its peers, and its lower cash flow generation compared to UBER.

8. Key Risks and Considerations:

   • TSLA's high valuation is a significant risk, as it is possible that the market is overestimating its future growth potential.
   • TSLA's lower profitability and earnings per share compared to its peers suggest that it may need to improve its efficiency and cost management to further enhance its financial performance.
   • TSLA's dependence on government subsidies and incentives for its electric vehicle sales could be a risk if these policies change.

9. Overall Assessment:

   • TSLA is a financially strong company with a dominant market position in the electric vehicle market.
   • Its strong growth, high valuation, and low debt suggest a positive outlook for its future prospects.
   • However, investors should be aware of the risks associated with its high valuation, lower profitability compared to peers, and dependence on government subsidies.