As part of a new series, each week we typically conduct a DCF on one of the companies in our screens. This week we thought we’d take a look at one of the stocks that is not currently on our screens, Tesla Inc (TSLA).
ProfileTesla is a vertically integrated battery electric vehicle automaker and developer of autonomous driving software. The company has multiple vehicles in its fleet, which include luxury and midsize sedans, crossover SUVs, a light truck, and a semi-truck. Tesla also plans to begin selling more affordable vehicles, and a sports car. Global deliveries in 2023 were a little over 1.8 million vehicles. The company also sells batteries for stationary storage for residential and commercial properties including utilities and solar panels and solar roofs for energy generation. Tesla also owns a fast-charging network.
Recent PerformanceOver the past twelve months, the share price is down 9.66%.
Source: Google FinanceInputs
Forecasted Free Cash Flows (FCFs)
Terminal ValueTerminal Value = FCF * (1 + g) / (r – g) = 314.16 billionPresent Value of Terminal ValuePV of Terminal Value = Terminal Value / (1 + WACC)^5 = 163.16 billionPresent Value of Free Cash FlowsPresent Value of FCFs = ? (FCF / (1 + r)^n) = 64.69 billionEnterprise ValueEnterprise Value = Present Value of FCFs + Present Value of Terminal Value = 227.85 billionNet DebtNet Debt = Total Debt – Total Cash = -18.20 billionEquity ValueEquity Value = Enterprise Value – Net Debt = 246.05 billionPer-Share DCF ValuePer-Share DCF Value = Enterprise Value / Number of Shares Outstanding = $77.13
Conclusion
Based on the DCF valuation, the stock is overvalued. The DCF value of $77.13 share is lower than the current market price of $210.66. The Margin of Safety is -173.11%.More By This Author:Large-Cap Stocks In Trouble: Here Are The 10 Worst PerformersAT&T Inc: Is It A Buy?Nike Inc (NKE) DCF Valuation: Is The Stock Undervalued?
Leave A Comment