      aswathdamodaran.blogspot.com · 2019-06-03
      · 2558d
    

Musings on Markets: Tesla's Travails - A Valuation Update

Damodaran updates his Tesla valuation from $190/share (down from $170-180 in 2018), arguing the stock has moved from significantly overvalued to fairly valued as operational improvements are offset by increased financial leverage risk. He critiques ARK Invest's forward pricing model as understating capital requirements and overstating near-term growth, while framing Tesla as a "corporate teenager" with immense potential repeatedly undermined by management distractions and poor financial decisions.

9 metrics· Cited 0× in the knowledge base ·Open source ↗

Metrics in this report

Bond Yield

8-10percent

range

Tesla debt instruments as of June 2019

Failure Probability

20percent

target

Tesla default risk as of June 2019 (up from 5% in June 2018)

Market Cap - Acquisition Floor

15billion USD

minimum

Tesla estimated value if acquired, provides $10/share valuation uplift

Operating Margin Target

10%percent

target

Tesla by 2023-2028 in base case scenario

Revenue Target

100billion USD

target

Tesla by 2028 in base case scenario

Valuation - Base Case

190USD per share

target

Tesla intrinsic value as of June 2019

Valuation - Simulation 10th Percentile

52USD per share

minimum

100,000 scenario simulations (downside case)

Valuation - Simulation 90th Percentile

380USD per share

best-in-class

100,000 scenario simulations (upside case)

Valuation - Simulation Median

180USD per share

median

100,000 scenario simulations