TSLA

Please note, this stock split on 08/31/2020 at a ratio of 5/1. The presented data has been updated to account for the change, however, the text of the note may refer to data based on the original presented price of $358.39.

Please note, this stock split again on 08/25/2022 at a ratio of 3/1. The presented data has been updated to account for the change, however, the text of the note may refer to data based on the already adjusted original presented price of $71.68.

Publicly traded companies mentioned herein: Tesla Inc (TSLA), Twitter Inc (TWTR)

Highlights

The presenter is long shares of Tesla Inc (TSLA), the controversial electric vehicle (EV) company that trades at ~$360 per share. The company took more than a decade to turn profitable and many investors doubted that would ever happen, but the presenter noticed its economics inflecting over 1H’18. At this point, he considers TSLA extremely well-positioned to succeed, noting that it dominates market share at its price points in all products, has a new product launch planned for each of the next three years, is expanding globally, and that customers love its cars. Further, TSLA is the only company in its industry growing revenue and profitability, and the presenter expects further margin expansion on the back of capex slowdowns, which will coincide with more efficient production, as international factories come online, among other cost reductions that are now possible for the company. The presenter’s outlook anticipates growth, profitability, and cash flow generation outpacing consensus expectations, as his 2021 EBITDA of ~$9B and FCF of ~$6.5B significantly exceed the Street’s ~$4.5B EBITDA and ~$3B FCF estimates. Applying a conservative 11x EBITDA multiple, he sees ~50% upside to ~$550 per share in 2021 with multiple upside and strong growth thereafter.