Intrinsic value of Tesla - TSLA

Previous Close

$352.05

  Intrinsic Value

$239.00

stock screener

  Rating & Target

sell

-32%

Previous close

$352.05

 
Intrinsic value

$239.00

 
Up/down potential

-32%

 
Rating

sell

We calculate the intrinsic value of TSLA stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  73.01
  29.90
  27.41
  25.17
  23.15
  21.34
  19.70
  18.23
  16.91
  15.72
  14.65
  13.68
  12.81
  12.03
  11.33
  10.70
  10.13
  9.61
  9.15
  8.74
  8.36
  8.03
  7.72
  7.45
  7.21
  6.99
  6.79
  6.61
  6.45
  6.30
  6.17
Revenue, $m
  7,000
  9,093
  11,585
  14,501
  17,859
  21,669
  25,939
  30,668
  35,854
  41,490
  47,567
  54,075
  61,004
  68,344
  76,087
  84,225
  92,755
  101,672
  110,978
  120,674
  130,767
  141,264
  152,176
  163,516
  175,300
  187,547
  200,277
  213,513
  227,280
  241,606
  256,520
Variable operating expenses, $m
 
  8,938
  11,388
  14,255
  17,555
  21,301
  25,498
  30,147
  35,244
  40,784
  46,758
  53,155
  59,967
  67,182
  74,793
  82,793
  91,178
  99,944
  109,091
  118,623
  128,544
  138,862
  149,589
  160,736
  172,320
  184,359
  196,872
  209,883
  223,417
  237,499
  252,159
Fixed operating expenses, $m
 
  825
  846
  867
  889
  911
  934
  957
  981
  1,005
  1,030
  1,056
  1,083
  1,110
  1,137
  1,166
  1,195
  1,225
  1,256
  1,287
  1,319
  1,352
  1,386
  1,421
  1,456
  1,492
  1,530
  1,568
  1,607
  1,647
  1,689
Total operating expenses, $m
  7,667
  9,763
  12,234
  15,122
  18,444
  22,212
  26,432
  31,104
  36,225
  41,789
  47,788
  54,211
  61,050
  68,292
  75,930
  83,959
  92,373
  101,169
  110,347
  119,910
  129,863
  140,214
  150,975
  162,157
  173,776
  185,851
  198,402
  211,451
  225,024
  239,146
  253,848
Operating income, $m
  -667
  -671
  -649
  -620
  -585
  -542
  -493
  -436
  -371
  -300
  -222
  -137
  -46
  52
  156
  266
  382
  504
  631
  765
  904
  1,049
  1,201
  1,359
  1,524
  1,696
  1,875
  2,062
  2,257
  2,460
  2,672
EBITDA, $m
  280
  548
  904
  1,323
  1,809
  2,362
  2,984
  3,675
  4,435
  5,261
  6,154
  7,111
  8,131
  9,213
  10,355
  11,555
  12,814
  14,131
  15,506
  16,940
  18,432
  19,984
  21,599
  23,277
  25,021
  26,834
  28,720
  30,681
  32,721
  34,844
  37,056
Interest expense (income), $m
  39
  209
  385
  594
  839
  1,121
  1,440
  1,798
  2,195
  2,630
  3,103
  3,613
  4,159
  4,740
  5,356
  6,005
  6,688
  7,403
  8,151
  8,932
  9,745
  10,592
  11,472
  12,388
  13,339
  14,328
  15,355
  16,423
  17,533
  18,688
  19,890
Earnings before tax, $m
  -746
  -880
  -1,034
  -1,215
  -1,424
  -1,663
  -1,933
  -2,234
  -2,566
  -2,930
  -3,325
  -3,750
  -4,204
  -4,688
  -5,200
  -5,739
  -6,306
  -6,900
  -7,520
  -8,167
  -8,841
  -9,542
  -10,271
  -11,028
  -11,815
  -12,632
  -13,480
  -14,361
  -15,276
  -16,228
  -17,217
Tax expense, $m
  27
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -675
  -880
  -1,034
  -1,215
  -1,424
  -1,663
  -1,933
  -2,234
  -2,566
  -2,930
  -3,325
  -3,750
  -4,204
  -4,688
  -5,200
  -5,739
  -6,306
  -6,900
  -7,520
  -8,167
  -8,841
  -9,542
  -10,271
  -11,028
  -11,815
  -12,632
  -13,480
  -14,361
  -15,276
  -16,228
  -17,217

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  3,393
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  22,664
  25,050
  31,916
  39,949
  49,197
  59,695
  71,456
  84,485
  98,771
  114,297
  131,037
  148,966
  168,054
  188,275
  209,606
  232,026
  255,522
  280,088
  305,723
  332,436
  360,239
  389,157
  419,217
  450,458
  482,921
  516,659
  551,728
  588,190
  626,117
  665,582
  706,667
Adjusted assets (=assets-cash), $m
  19,271
  25,050
  31,916
  39,949
  49,197
  59,695
  71,456
  84,485
  98,771
  114,297
  131,037
  148,966
  168,054
  188,275
  209,606
  232,026
  255,522
  280,088
  305,723
  332,436
  360,239
  389,157
  419,217
  450,458
  482,921
  516,659
  551,728
  588,190
  626,117
  665,582
  706,667
Revenue / Adjusted assets
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
  0.363
Average production assets, $m
  4,881
  6,338
  8,075
  10,107
  12,447
  15,103
  18,079
  21,376
  24,990
  28,918
  33,154
  37,690
  42,520
  47,636
  53,033
  58,705
  64,650
  70,865
  77,351
  84,110
  91,144
  98,461
  106,067
  113,971
  122,184
  130,720
  139,593
  148,819
  158,414
  168,399
  178,794
Working capital, $m
  433
  -2,355
  -3,001
  -3,756
  -4,625
  -5,612
  -6,718
  -7,943
  -9,286
  -10,746
  -12,320
  -14,005
  -15,800
  -17,701
  -19,706
  -21,814
  -24,023
  -26,333
  -28,743
  -31,255
  -33,869
  -36,587
  -39,414
  -42,351
  -45,403
  -48,575
  -51,872
  -55,300
  -58,866
  -62,576
  -66,439
Total debt, $m
  7,128
  11,010
  16,984
  23,972
  32,019
  41,151
  51,384
  62,719
  75,148
  88,655
  103,219
  118,817
  135,424
  153,017
  171,574
  191,079
  211,521
  232,894
  255,196
  278,436
  302,625
  327,783
  353,936
  381,115
  409,359
  438,711
  469,220
  500,943
  533,938
  568,273
  604,017
Total liabilities, $m
  17,911
  21,793
  27,767
  34,755
  42,802
  51,934
  62,167
  73,502
  85,931
  99,438
  114,002
  129,600
  146,207
  163,800
  182,357
  201,862
  222,304
  243,677
  265,979
  289,219
  313,408
  338,566
  364,719
  391,898
  420,142
  449,494
  480,003
  511,726
  544,721
  579,056
  614,800
Total equity, $m
  4,753
  3,256
  4,149
  5,193
  6,396
  7,760
  9,289
  10,983
  12,840
  14,859
  17,035
  19,366
  21,847
  24,476
  27,249
  30,163
  33,218
  36,411
  39,744
  43,217
  46,831
  50,590
  54,498
  58,559
  62,780
  67,166
  71,725
  76,465
  81,395
  86,526
  91,867
Total liabilities and equity, $m
  22,664
  25,049
  31,916
  39,948
  49,198
  59,694
  71,456
  84,485
  98,771
  114,297
  131,037
  148,966
  168,054
  188,276
  209,606
  232,025
  255,522
  280,088
  305,723
  332,436
  360,239
  389,156
  419,217
  450,457
  482,922
  516,660
  551,728
  588,191
  626,116
  665,582
  706,667
Debt-to-equity ratio
  1.500
  3.380
  4.090
  4.620
  5.010
  5.300
  5.530
  5.710
  5.850
  5.970
  6.060
  6.140
  6.200
  6.250
  6.300
  6.330
  6.370
  6.400
  6.420
  6.440
  6.460
  6.480
  6.490
  6.510
  6.520
  6.530
  6.540
  6.550
  6.560
  6.570
  6.570
Adjusted equity ratio
  0.071
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130
  0.130

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -675
  -880
  -1,034
  -1,215
  -1,424
  -1,663
  -1,933
  -2,234
  -2,566
  -2,930
  -3,325
  -3,750
  -4,204
  -4,688
  -5,200
  -5,739
  -6,306
  -6,900
  -7,520
  -8,167
  -8,841
  -9,542
  -10,271
  -11,028
  -11,815
  -12,632
  -13,480
  -14,361
  -15,276
  -16,228
  -17,217
Depreciation, amort., depletion, $m
  947
  1,219
  1,553
  1,944
  2,394
  2,905
  3,477
  4,111
  4,806
  5,561
  6,376
  7,248
  8,177
  9,161
  10,199
  11,289
  12,433
  13,628
  14,875
  16,175
  17,528
  18,935
  20,397
  21,917
  23,497
  25,139
  26,845
  28,619
  30,464
  32,385
  34,384
Funds from operations, $m
  -818
  339
  519
  729
  970
  1,241
  1,544
  1,877
  2,239
  2,631
  3,051
  3,498
  3,973
  4,473
  4,999
  5,550
  6,127
  6,728
  7,355
  8,008
  8,686
  9,392
  10,126
  10,889
  11,682
  12,507
  13,365
  14,258
  15,188
  16,157
  17,166
Change in working capital, $m
  -694
  -542
  -646
  -755
  -870
  -987
  -1,106
  -1,225
  -1,343
  -1,460
  -1,574
  -1,686
  -1,795
  -1,901
  -2,005
  -2,108
  -2,209
  -2,310
  -2,410
  -2,511
  -2,614
  -2,719
  -2,826
  -2,937
  -3,052
  -3,172
  -3,297
  -3,428
  -3,566
  -3,710
  -3,863
Cash from operations, $m
  -124
  881
  1,164
  1,484
  1,839
  2,228
  2,650
  3,102
  3,582
  4,091
  4,625
  5,184
  5,767
  6,374
  7,004
  7,658
  8,336
  9,038
  9,765
  10,519
  11,300
  12,111
  12,952
  13,826
  14,734
  15,679
  16,662
  17,686
  18,754
  19,867
  21,029
Maintenance CAPEX, $m
  0
  -939
  -1,219
  -1,553
  -1,944
  -2,394
  -2,905
  -3,477
  -4,111
  -4,806
  -5,561
  -6,376
  -7,248
  -8,177
  -9,161
  -10,199
  -11,289
  -12,433
  -13,628
  -14,875
  -16,175
  -17,528
  -18,935
  -20,397
  -21,917
  -23,497
  -25,139
  -26,845
  -28,619
  -30,464
  -32,385
New CAPEX, $m
  -1,440
  -1,457
  -1,737
  -2,032
  -2,340
  -2,656
  -2,976
  -3,296
  -3,615
  -3,928
  -4,236
  -4,536
  -4,830
  -5,116
  -5,397
  -5,673
  -5,945
  -6,215
  -6,486
  -6,758
  -7,035
  -7,316
  -7,606
  -7,904
  -8,214
  -8,536
  -8,873
  -9,225
  -9,596
  -9,985
  -10,395
Cash from investing activities, $m
  -1,416
  -2,396
  -2,956
  -3,585
  -4,284
  -5,050
  -5,881
  -6,773
  -7,726
  -8,734
  -9,797
  -10,912
  -12,078
  -13,293
  -14,558
  -15,872
  -17,234
  -18,648
  -20,114
  -21,633
  -23,210
  -24,844
  -26,541
  -28,301
  -30,131
  -32,033
  -34,012
  -36,070
  -38,215
  -40,449
  -42,780
Free cash flow, $m
  -1,540
  -1,514
  -1,792
  -2,101
  -2,445
  -2,821
  -3,231
  -3,672
  -4,143
  -4,643
  -5,172
  -5,728
  -6,310
  -6,919
  -7,553
  -8,213
  -8,899
  -9,610
  -10,349
  -11,115
  -11,909
  -12,733
  -13,588
  -14,475
  -15,397
  -16,354
  -17,349
  -18,384
  -19,461
  -20,582
  -21,751
Issuance/(repayment) of debt, $m
  948
  5,032
  5,973
  6,989
  8,047
  9,133
  10,233
  11,335
  12,429
  13,507
  14,564
  15,598
  16,607
  17,592
  18,557
  19,505
  20,442
  21,372
  22,303
  23,240
  24,189
  25,158
  26,153
  27,179
  28,244
  29,352
  30,510
  31,722
  32,996
  34,335
  35,744
Issuance/(repurchase) of shares, $m
  1,866
  1,626
  1,927
  2,259
  2,626
  3,028
  3,462
  3,928
  4,424
  4,948
  5,501
  6,080
  6,686
  7,316
  7,972
  8,654
  9,361
  10,093
  10,853
  11,640
  12,456
  13,302
  14,179
  15,090
  16,035
  17,018
  18,039
  19,101
  20,207
  21,358
  22,558
Cash from financing (excl. dividends), $m  
  3,744
  6,658
  7,900
  9,248
  10,673
  12,161
  13,695
  15,263
  16,853
  18,455
  20,065
  21,678
  23,293
  24,908
  26,529
  28,159
  29,803
  31,465
  33,156
  34,880
  36,645
  38,460
  40,332
  42,269
  44,279
  46,370
  48,549
  50,823
  53,203
  55,693
  58,302
Total cash flow (excl. dividends), $m
  2,196
  5,144
  6,109
  7,147
  8,228
  9,339
  10,464
  11,591
  12,710
  13,812
  14,894
  15,950
  16,982
  17,990
  18,977
  19,946
  20,904
  21,855
  22,807
  23,765
  24,736
  25,727
  26,744
  27,793
  28,882
  30,015
  31,199
  32,439
  33,741
  35,110
  36,552
Retained Cash Flow (-), $m
  -3,669
  -1,626
  -1,927
  -2,259
  -2,626
  -3,028
  -3,462
  -3,928
  -4,424
  -4,948
  -5,501
  -6,080
  -6,686
  -7,316
  -7,972
  -8,654
  -9,361
  -10,093
  -10,853
  -11,640
  -12,456
  -13,302
  -14,179
  -15,090
  -16,035
  -17,018
  -18,039
  -19,101
  -20,207
  -21,358
  -22,558
Prev. year cash balance distribution, $m
 
  2,243
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  5,761
  4,182
  4,887
  5,602
  6,311
  7,002
  7,663
  8,286
  8,864
  9,393
  9,870
  10,296
  10,674
  11,004
  11,293
  11,543
  11,762
  11,954
  12,125
  12,280
  12,425
  12,565
  12,704
  12,847
  12,998
  13,160
  13,338
  13,535
  13,752
  13,994
Discount rate, %
 
  6.90
  7.25
  7.61
  7.99
  8.39
  8.81
  9.25
  9.71
  10.19
  10.70
  11.24
  11.80
  12.39
  13.01
  13.66
  14.34
  15.06
  15.81
  16.61
  17.44
  18.31
  19.22
  20.18
  21.19
  22.25
  23.37
  24.53
  25.76
  27.05
  28.40
PV of cash for distribution, $m
 
  5,389
  3,636
  3,922
  4,120
  4,219
  4,220
  4,126
  3,948
  3,700
  3,397
  3,058
  2,700
  2,338
  1,985
  1,654
  1,352
  1,083
  851
  655
  493
  364
  263
  185
  127
  86
  56
  36
  22
  13
  8
Current shareholders' claim on cash, %
  100
  93.9
  88.7
  84.1
  80.0
  76.4
  73.2
  70.2
  67.5
  65.0
  62.7
  60.5
  58.5
  56.6
  54.8
  53.1
  51.5
  50.0
  48.5
  47.2
  45.8
  44.6
  43.4
  42.2
  41.1
  40.0
  38.9
  37.9
  37.0
  36.0
  35.1

Tesla, Inc., formerly Tesla Motors, Inc., designs, develops, manufactures and sells fully electric vehicles, and energy storage systems, as well as installs, operates and maintains solar and energy storage products. The Company operates through two segments: Automotive, and Energy generation and storage. The Automotive segment includes the design, development, manufacturing, and sales of electric vehicles. The Energy generation and storage segment includes the design, manufacture, installation, and sale or lease of stationary energy storage products and solar energy systems to residential and commercial customers, or sale of electricity generated by its solar energy systems to customers. The Company produces and distributes two fully electric vehicles, the Model S sedan and the Model X sport utility vehicle (SUV). It also offers Model 3, a sedan designed for the mass market. It develops energy storage products for use in homes, commercial facilities and utility sites.

FINANCIAL RATIOS  of  Tesla (TSLA)

Valuation Ratios
P/E Ratio -84.3
Price to Sales 8.1
Price to Book 12
Price to Tangible Book
Price to Cash Flow -458.7
Price to Free Cash Flow -36.4
Growth Rates
Sales Growth Rate 73%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -11.9%
Cap. Spend. - 3 Yr. Gr. Rate 40.4%
Financial Strength
Quick Ratio 3
Current Ratio 0
LT Debt to Equity 125.8%
Total Debt to Equity 150%
Interest Coverage -18
Management Effectiveness
Return On Assets -4.1%
Ret/ On Assets - 3 Yr. Avg. -7.7%
Return On Total Capital -8.6%
Ret/ On T. Cap. - 3 Yr. Avg. -15.3%
Return On Equity -23.1%
Return On Equity - 3 Yr. Avg. -49.8%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 22.8%
Gross Margin - 3 Yr. Avg. 24.4%
EBITDA Margin 3.4%
EBITDA Margin - 3 Yr. Avg. -2.7%
Operating Margin -9.5%
Oper. Margin - 3 Yr. Avg. -11%
Pre-Tax Margin -10.7%
Pre-Tax Margin - 3 Yr. Avg. -13.7%
Net Profit Margin -9.6%
Net Profit Margin - 3 Yr. Avg. -13.6%
Effective Tax Rate -3.6%
Eff/ Tax Rate - 3 Yr. Avg. -2.8%
Payout Ratio 0%

TSLA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TSLA stock intrinsic value calculation we used $7000 million for the last fiscal year's total revenue generated by Tesla. The default revenue input number comes from 2016 income statement of Tesla. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our TSLA stock valuation model: a) initial revenue growth rate of 29.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.9%, whose default value for TSLA is calculated based on our internal credit rating of Tesla, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Tesla.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of TSLA stock the variable cost ratio is equal to 98.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $805 million in the base year in the intrinsic value calculation for TSLA stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Tesla.

Corporate tax rate of 27% is the nominal tax rate for Tesla. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the TSLA stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for TSLA are equal to 69.7%.

Life of production assets of 5.2 years is the average useful life of capital assets used in Tesla operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for TSLA is equal to -25.9%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $4753 million for Tesla - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 170.226 million for Tesla is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Tesla at the current share price and the inputted number of shares is $59.9 billion.

RELATED COMPANIES Price Int.Val. Rating
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COMPANY NEWS

▶ For Tesla, It's Still All About the Model 3   [05:46PM  TheStreet.com]
▶ Tesla Will Merge with SpaceX: Nomura   [01:27PM  Investopedia]
▶ Elon Musk Derides Uber's Flying-Taxi Dream   [01:39PM  TheStreet.com]
▶ Nomura Analyst Says SpaceX and Tesla Will Merge   [01:23PM  Bloomberg Video]
▶ [$$] Tesla Begins Taking Model 3 Orders   [12:00PM  The Wall Street Journal]
▶ Dow Leads Stock Market Up; Tesla Gets Some Good News   [11:57AM  Investor's Business Daily]
▶ Electric Cars Won't Crimp Oil Demand   [02:11PM  Barrons.com]
▶ Hackers hijack Teslas Amazon cloud to secretly mine cryptocurrency   [09:48AM  American City Business Journals]
▶ [$$] Editor's News Picks   [05:13PM  The Wall Street Journal]
▶ Will Volkswagen Build This Self-Driving Electric Sedan?   [Feb-19-18 09:32PM  Motley Fool]
▶ Panasonic Enters AC Solar Panel Market Without Tesla   [Feb-18-18 07:02PM  Motley Fool]
▶ What to Expect From Tesla in 2018   [05:47PM  Motley Fool]
▶ The Story of Uber   [03:46PM  Investopedia]
▶ Tesla Bear Turns Optimistic on Model 3 Production   [Feb-15-18 07:17PM  Investopedia]
▶ 5 Metrics Highlight Tesla, Inc.'s 2017   [06:46PM  Motley Fool]
▶ Elon Musk roundup: SpaceX still riding high after Falcon Heavy launch   [10:35AM  American City Business Journals]
▶ Ferrari Faces These Risks With 'FUV,' Tesla-Rivaling Electric Supercar   [Feb-14-18 05:11PM  Investor's Business Daily]
▶ Teslas China Dream Hits Roadblock Over Factory   [01:50PM  Bloomberg Video]
Financial statements of TSLA
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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