Intrinsic value of Tesla - TSLA

Previous Close

$284.96

  Intrinsic Value

$68.11

stock screener

  Rating & Target

str. sell

-76%

Previous close

$284.96

 
Intrinsic value

$68.11

 
Up/down potential

-76%

 
Rating

str. 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

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 48.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  43.50
  39.65
  36.19
  33.07
  30.26
  27.73
  25.46
  23.41
  21.57
  19.92
  18.42
  17.08
  15.87
  14.79
  13.81
  12.93
  12.13
  11.42
  10.78
  10.20
  9.68
  9.21
  8.79
  8.41
  8.07
  7.76
  7.49
  7.24
  7.01
  6.81
Revenue, $m
  16,874
  23,564
  32,091
  42,702
  55,624
  71,051
  89,141
  110,012
  133,745
  160,382
  189,931
  222,374
  257,673
  295,772
  336,611
  380,125
  426,249
  474,930
  526,121
  579,790
  635,917
  694,502
  755,558
  819,117
  885,229
  953,957
  1,025,385
  1,099,610
  1,176,746
  1,256,923
Variable operating expenses, $m
  18,458
  25,761
  35,067
  46,648
  60,751
  77,588
  97,331
  120,111
  146,014
  175,085
  207,293
  242,702
  281,227
  322,810
  367,382
  414,873
  465,214
  518,345
  574,216
  632,790
  694,049
  757,989
  824,626
  893,996
  966,150
  1,041,161
  1,119,118
  1,200,129
  1,284,316
  1,371,822
Fixed operating expenses, $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
Total operating expenses, $m
  18,458
  25,761
  35,067
  46,648
  60,751
  77,588
  97,331
  120,111
  146,014
  175,085
  207,293
  242,702
  281,227
  322,810
  367,382
  414,873
  465,214
  518,345
  574,216
  632,790
  694,049
  757,989
  824,626
  893,996
  966,150
  1,041,161
  1,119,118
  1,200,129
  1,284,316
  1,371,822
Operating income, $m
  -1,585
  -2,196
  -2,976
  -3,946
  -5,127
  -6,537
  -8,191
  -10,099
  -12,268
  -14,703
  -17,362
  -20,328
  -23,555
  -27,038
  -30,771
  -34,748
  -38,965
  -43,415
  -48,095
  -53,001
  -58,131
  -63,487
  -69,068
  -74,878
  -80,922
  -87,204
  -93,734
  -100,519
  -107,570
  -114,900
EBITDA, $m
  780
  1,090
  1,484
  1,975
  2,572
  3,286
  4,122
  5,087
  6,185
  7,417
  8,783
  10,284
  11,916
  13,678
  15,566
  17,579
  19,712
  21,963
  24,330
  26,812
  29,408
  32,117
  34,940
  37,879
  40,937
  44,115
  47,418
  50,851
  54,418
  58,125
Interest expense (income), $m
  39
  557
  1,156
  1,937
  2,934
  4,173
  5,683
  7,485
  9,598
  12,037
  14,809
  17,921
  21,373
  25,163
  29,287
  33,738
  38,509
  43,592
  48,981
  54,668
  60,648
  66,918
  73,475
  80,319
  87,452
  94,877
  102,601
  110,630
  118,974
  127,646
  136,657
Earnings before tax, $m
  -2,142
  -3,352
  -4,913
  -6,879
  -9,300
  -12,220
  -15,676
  -19,697
  -24,305
  -29,512
  -35,283
  -41,701
  -48,718
  -56,325
  -64,509
  -73,257
  -82,557
  -92,396
  -102,763
  -113,649
  -125,049
  -136,962
  -149,387
  -162,331
  -175,799
  -189,805
  -204,364
  -219,494
  -235,216
  -251,557
Tax expense, $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
Net income, $m
  -2,142
  -3,352
  -4,913
  -6,879
  -9,300
  -12,220
  -15,676
  -19,697
  -24,305
  -29,512
  -35,283
  -41,701
  -48,718
  -56,325
  -64,509
  -73,257
  -82,557
  -92,396
  -102,763
  -113,649
  -125,049
  -136,962
  -149,387
  -162,331
  -175,799
  -189,805
  -204,364
  -219,494
  -235,216
  -251,557

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
Total assets, $m
  41,156
  57,474
  78,271
  104,152
  135,668
  173,295
  217,416
  268,323
  326,208
  391,175
  463,245
  542,375
  628,470
  721,396
  821,004
  927,133
  1,039,633
  1,158,366
  1,283,222
  1,414,121
  1,551,018
  1,693,907
  1,842,825
  1,997,848
  2,159,094
  2,326,724
  2,500,938
  2,681,975
  2,870,112
  3,065,665
Adjusted assets (=assets-cash), $m
  41,156
  57,474
  78,271
  104,152
  135,668
  173,295
  217,416
  268,323
  326,208
  391,175
  463,245
  542,375
  628,470
  721,396
  821,004
  927,133
  1,039,633
  1,158,366
  1,283,222
  1,414,121
  1,551,018
  1,693,907
  1,842,825
  1,997,848
  2,159,094
  2,326,724
  2,500,938
  2,681,975
  2,870,112
  3,065,665
Revenue / Adjusted assets
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
Average production assets, $m
  25,783
  36,006
  49,035
  65,249
  84,994
  108,566
  136,207
  168,099
  204,363
  245,063
  290,214
  339,787
  393,724
  451,940
  514,342
  580,830
  651,309
  725,693
  803,913
  885,918
  971,682
  1,061,199
  1,154,493
  1,251,612
  1,352,629
  1,457,646
  1,566,788
  1,680,204
  1,798,068
  1,920,578
Working capital, $m
  -5,349
  -7,470
  -10,173
  -13,537
  -17,633
  -22,523
  -28,258
  -34,874
  -42,397
  -50,841
  -60,208
  -70,493
  -81,682
  -93,760
  -106,706
  -120,499
  -135,121
  -150,553
  -166,780
  -183,793
  -201,586
  -220,157
  -239,512
  -259,660
  -280,617
  -302,404
  -325,047
  -348,576
  -373,029
  -398,444
Total debt, $m
  21,405
  35,879
  54,326
  77,282
  105,237
  138,612
  177,748
  222,902
  274,246
  331,871
  395,798
  465,986
  542,352
  624,778
  713,130
  807,267
  907,054
  1,012,370
  1,123,118
  1,239,225
  1,360,652
  1,487,395
  1,619,485
  1,756,990
  1,900,016
  2,048,704
  2,203,231
  2,363,811
  2,530,689
  2,704,144
Total liabilities, $m
  36,505
  50,979
  69,426
  92,383
  120,338
  153,712
  192,848
  238,002
  289,347
  346,972
  410,899
  481,087
  557,453
  639,878
  728,230
  822,367
  922,154
  1,027,471
  1,138,218
  1,254,325
  1,375,753
  1,502,496
  1,634,586
  1,772,091
  1,915,116
  2,063,804
  2,218,332
  2,378,912
  2,545,790
  2,719,245
Total equity, $m
  4,651
  6,495
  8,845
  11,769
  15,331
  19,582
  24,568
  30,320
  36,862
  44,203
  52,347
  61,288
  71,017
  81,518
  92,773
  104,766
  117,478
  130,895
  145,004
  159,796
  175,265
  191,412
  208,239
  225,757
  243,978
  262,920
  282,606
  303,063
  324,323
  346,420
Total liabilities and equity, $m
  41,156
  57,474
  78,271
  104,152
  135,669
  173,294
  217,416
  268,322
  326,209
  391,175
  463,246
  542,375
  628,470
  721,396
  821,003
  927,133
  1,039,632
  1,158,366
  1,283,222
  1,414,121
  1,551,018
  1,693,908
  1,842,825
  1,997,848
  2,159,094
  2,326,724
  2,500,938
  2,681,975
  2,870,113
  3,065,665
Debt-to-equity ratio
  4.600
  5.520
  6.140
  6.570
  6.860
  7.080
  7.230
  7.350
  7.440
  7.510
  7.560
  7.600
  7.640
  7.660
  7.690
  7.710
  7.720
  7.730
  7.750
  7.760
  7.760
  7.770
  7.780
  7.780
  7.790
  7.790
  7.800
  7.800
  7.800
  7.810
Adjusted equity ratio
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -2,142
  -3,352
  -4,913
  -6,879
  -9,300
  -12,220
  -15,676
  -19,697
  -24,305
  -29,512
  -35,283
  -41,701
  -48,718
  -56,325
  -64,509
  -73,257
  -82,557
  -92,396
  -102,763
  -113,649
  -125,049
  -136,962
  -149,387
  -162,331
  -175,799
  -189,805
  -204,364
  -219,494
  -235,216
  -251,557
Depreciation, amort., depletion, $m
  2,365
  3,286
  4,460
  5,920
  7,699
  9,823
  12,313
  15,186
  18,453
  22,120
  26,145
  30,611
  35,471
  40,715
  46,337
  52,327
  58,676
  65,378
  72,425
  79,812
  87,539
  95,604
  104,008
  112,758
  121,858
  131,319
  141,152
  151,370
  161,988
  173,025
Funds from operations, $m
  223
  -66
  -453
  -959
  -1,601
  -2,397
  -3,363
  -4,511
  -5,852
  -7,393
  -9,138
  -11,090
  -13,247
  -15,609
  -18,172
  -20,930
  -23,881
  -27,018
  -30,338
  -33,836
  -37,511
  -41,358
  -45,379
  -49,573
  -53,941
  -58,486
  -63,212
  -68,124
  -73,228
  -78,532
Change in working capital, $m
  -1,621
  -2,121
  -2,703
  -3,364
  -4,096
  -4,890
  -5,734
  -6,616
  -7,523
  -8,444
  -9,367
  -10,285
  -11,190
  -12,078
  -12,946
  -13,794
  -14,622
  -15,432
  -16,228
  -17,013
  -17,792
  -18,571
  -19,355
  -20,148
  -20,957
  -21,787
  -22,643
  -23,529
  -24,452
  -25,416
Cash from operations, $m
  1,845
  2,055
  2,250
  2,405
  2,495
  2,493
  2,372
  2,105
  1,672
  1,051
  229
  -805
  -2,058
  -3,532
  -5,226
  -7,137
  -9,259
  -11,586
  -14,110
  -16,824
  -19,718
  -22,787
  -26,024
  -29,424
  -32,984
  -36,699
  -40,569
  -44,594
  -48,776
  -53,116
Maintenance CAPEX, $m
  -1,618
  -2,323
  -3,244
  -4,418
  -5,878
  -7,657
  -9,781
  -12,271
  -15,144
  -18,411
  -22,078
  -26,145
  -30,611
  -35,471
  -40,715
  -46,337
  -52,327
  -58,676
  -65,378
  -72,425
  -79,812
  -87,539
  -95,604
  -104,008
  -112,758
  -121,858
  -131,319
  -141,152
  -151,370
  -161,988
New CAPEX, $m
  -7,819
  -10,223
  -13,029
  -16,214
  -19,744
  -23,572
  -27,641
  -31,892
  -36,264
  -40,700
  -45,151
  -49,573
  -53,936
  -58,217
  -62,402
  -66,488
  -70,479
  -74,384
  -78,220
  -82,005
  -85,763
  -89,517
  -93,294
  -97,119
  -101,018
  -105,017
  -109,141
  -113,416
  -117,864
  -122,510
Cash from investing activities, $m
  -9,437
  -12,546
  -16,273
  -20,632
  -25,622
  -31,229
  -37,422
  -44,163
  -51,408
  -59,111
  -67,229
  -75,718
  -84,547
  -93,688
  -103,117
  -112,825
  -122,806
  -133,060
  -143,598
  -154,430
  -165,575
  -177,056
  -188,898
  -201,127
  -213,776
  -226,875
  -240,460
  -254,568
  -269,234
  -284,498
Free cash flow, $m
  -7,593
  -10,491
  -14,023
  -18,227
  -23,127
  -28,736
  -35,050
  -42,058
  -49,736
  -58,060
  -66,999
  -76,524
  -86,605
  -97,219
  -108,343
  -119,962
  -132,065
  -144,647
  -157,708
  -171,254
  -185,294
  -199,843
  -214,922
  -230,551
  -246,759
  -263,574
  -281,030
  -299,163
  -318,010
  -337,614
Issuance/(repayment) of debt, $m
  11,090
  14,474
  18,447
  22,957
  27,955
  33,374
  39,136
  45,154
  51,344
  57,625
  63,927
  70,188
  76,366
  82,426
  88,352
  94,137
  99,787
  105,317
  110,747
  116,107
  121,427
  126,743
  132,090
  137,505
  143,026
  148,688
  154,528
  160,580
  166,878
  173,455
Issuance/(repurchase) of shares, $m
  3,552
  5,196
  7,263
  9,804
  12,862
  16,472
  20,662
  25,450
  30,846
  36,854
  43,427
  50,643
  58,447
  66,825
  75,764
  85,250
  95,270
  105,813
  116,871
  128,440
  140,519
  153,109
  166,215
  179,848
  194,020
  208,747
  224,050
  239,951
  256,476
  273,654
Cash from financing (excl. dividends), $m  
  14,642
  19,670
  25,710
  32,761
  40,817
  49,846
  59,798
  70,604
  82,190
  94,479
  107,354
  120,831
  134,813
  149,251
  164,116
  179,387
  195,057
  211,130
  227,618
  244,547
  261,946
  279,852
  298,305
  317,353
  337,046
  357,435
  378,578
  400,531
  423,354
  447,109
Total cash flow (excl. dividends), $m
  7,049
  9,179
  11,687
  14,534
  17,689
  21,110
  24,747
  28,546
  32,454
  36,419
  40,354
  44,307
  48,207
  52,032
  55,773
  59,425
  62,992
  66,482
  69,911
  73,294
  76,653
  80,008
  83,383
  86,802
  90,287
  93,861
  97,547
  101,368
  105,344
  109,495
Retained Cash Flow (-), $m
  -3,552
  -5,196
  -7,263
  -9,804
  -12,862
  -16,472
  -20,662
  -25,450
  -30,846
  -36,854
  -43,427
  -50,643
  -58,447
  -66,825
  -75,764
  -85,250
  -95,270
  -105,813
  -116,871
  -128,440
  -140,519
  -153,109
  -166,215
  -179,848
  -194,020
  -208,747
  -224,050
  -239,951
  -256,476
  -273,654
Prev. year cash balance distribution, $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 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
  3,497
  3,983
  4,424
  4,730
  4,828
  4,638
  4,086
  3,097
  1,608
  -435
  -3,073
  -6,335
  -10,240
  -14,793
  -19,991
  -25,825
  -32,278
  -39,330
  -46,961
  -55,146
  -63,866
  -73,100
  -82,832
  -93,046
  -103,733
  -114,886
  -126,503
  -138,583
  -151,132
  -164,159
Discount rate, %
  9.50
  9.98
  10.47
  11.00
  11.55
  12.12
  12.73
  13.37
  14.04
  14.74
  15.47
  16.25
  17.06
  17.91
  18.81
  19.75
  20.74
  21.77
  22.86
  24.01
  25.21
  26.47
  27.79
  29.18
  30.64
  32.17
  33.78
  35.47
  37.24
  39.10
PV of cash for distribution, $m
  3,193
  3,293
  3,281
  3,116
  2,795
  2,334
  1,766
  1,135
  493
  -110
  -631
  -1,040
  -1,321
  -1,473
  -1,507
  -1,444
  -1,311
  -1,134
  -939
  -746
  -569
  -417
  -294
  -200
  -130
  -81
  -49
  -28
  -16
  -8
Current shareholders' claim on cash, %
  90.1
  81.1
  72.9
  65.6
  59.2
  53.4
  48.3
  43.8
  39.7
  36.1
  32.9
  30.0
  27.4
  25.0
  22.9
  21.0
  19.2
  17.6
  16.2
  14.9
  13.7
  12.6
  11.6
  10.7
  9.8
  9.0
  8.3
  7.7
  7.1
  6.5

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 -68.2
Price to Sales 6.6
Price to Book 9.7
Price to Tangible Book
Price to Cash Flow -371.3
Price to Free Cash Flow -29.4
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 $11758.751 million for the last fiscal year's total revenue generated by Tesla. The default revenue input number comes from 0001 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 43.5% 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 9.5%, 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 109.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 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 5.4% 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 152.8%.

Life of production assets of 11.1 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 -31.7%. 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 - $3239.896 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 169.794 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 $48.4 billion.

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COMPANY NEWS

▶ Elon Musk roundup: Tesla under DoJ investigation SpaceX over the moon   [02:58PM  American City Business Journals]
▶ Tesla probe: Could Elon Musk face jail time?   [11:40AM  Fox Business Videos]
▶ Company News For Sep 19, 2018   [10:15AM  Zacks]
▶ Whats News: Business & Finance   [12:15AM  The Wall Street Journal]
▶ 1st private moon flight passenger to invite creative guests   [Sep-18-18 10:30PM  Associated Press]
▶ Here Come Teslas Challengers With All-Electric SUVs   [08:20PM  The Wall Street Journal]
▶ Luxury Electric Car Competition Heats Up   [07:13PM  Bloomberg Video]
▶ What the DOJ Is Looking for in Tesla Probe   [05:24PM  Bloomberg Video]
▶ Tesla faces U.S. criminal probe   [03:31PM  Bloomberg]
▶ Tesla says it has turned over documents to feds   [03:16PM  Associated Press]
▶ Why Tesla, Inc. Stock Fell Tuesday   [02:54PM  Motley Fool]
▶ DOJ Tesla investigation: What you need to know   [02:25PM  Fox Business Videos]
▶ The Afternoon Rundown: September 18, 2018   [02:22PM  CNBC Videos]
▶ Audis EV Launch a Big Win for Tesla: UBS   [12:19PM  Investopedia]
▶ Apple dodges tariffs on smartwatches, earbuds   [10:02AM  Fox Business Videos]

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