Tesla TSLA
What does Tesla do?
Tesla designs, manufactures and sells electric vehicles as well as energy generation and storage systems. The company reports in two segments: Automotive, and Energy Generation and Storage. In the automotive business, revenue comes from vehicle sales, leasing, the sale of regulatory emission credits, software upgrades, the Supercharger network, as well as service, spare parts, insurance services and trading in used vehicles.
Sales are predominantly direct to end customers through its own sales and service locations as well as online, without a traditional dealer network. Competitively, Tesla faces established automakers with growing electric offerings on one side and increasingly strong manufacturers from China on the other. The company is positioned through vertical integration, its own charging network, in-house developed software and driver assistance systems, and manufacturing at several sites worldwide. The energy business with stationary battery storage and solar solutions complements the vehicle business.
Score profile
Rank vs. Auto Manufacturers (10 companies). 10 = top of the group, 5 = middle. Calculated from the metrics below, without AI.
Metrics compared with the industry
On profitability and quality, Tesla ranks among the best in the group Auto Manufacturers (8.0/10). On growth, the company ranks below average in the group Auto Manufacturers (2.5/10). On valuation (higher = cheaper), the stock ranks in the bottom fifth in the group Auto Manufacturers (1.0/10). On financial strength, Tesla ranks above average in the group Auto Manufacturers (7.7/10).
| Metric | Stock | Group median | Ranking |
|---|---|---|---|
| Forward P/E | 175.8x | 6.7x | better than 6 % |
| Trailing P/E | 417.2x | 25.9x | better than 8 % |
| PEG ratio | 4.2x | 0.6x | better than 21 % |
| EV/EBITDA | 149.0x | 9.6x | better than 7 % |
| Price/sales | 14.5x | 0.3x | better than 6 % |
| Price/book | 16.8x | 1.3x | better than 5 % |
| Revenue growth | -0.2% | -0.1% | better than 45 % |
| Earnings growth | -43.6% | 0.0% | better than 5 % |
| Gross margin | 19.3% | 11.8% | better than 95 % |
| Operating margin | 5.4% | 3.1% | better than 83 % |
| Net margin | 3.1% | 0.3% | better than 75 % |
| Return on equity | 3.8% | 0.3% | better than 65 % |
| Debt/equity | 18.3% | 131.9% | better than 95 % |
| Current ratio | 1.7x | 1.2x | better than 75 % |
| Free cash flow yield | 0.3% | 0.0% | better than 61 % |
| Dividend yield | 0.0% | 6.8% | – |
| Payout ratio | 0.0% | 61.4% | – |
| Beta | 1.74 | 0.96 | – |
Valuation: what is Tesla worth?
For Tesla the data currently does not allow a reliable model range (e.g. negative free cash flow or missing comparables). In this case the Pro analysis assesses the valuation qualitatively.
40 analysts, average rating “Buy”, average price target 412.48 USD (+8.7%).
The full DCF matrix, the reverse DCF (what growth the price implies) and scenarios are part of the Pro analysis.
What the business depends on
- Demand for electric vehicles and utilization of production sites largely determine revenue and economies of scale.
- Margin depends on manufacturing costs, battery prices and pricing in a competitive market.
- Software, services and the energy storage business can complement the vehicle business with recurring and additional revenue.
Risks
- Intense price competition, in particular from Chinese and established manufacturers, could weigh on margins and market share.
- Regulatory changes in subsidies, tariffs and emission credits significantly affect demand and earnings.
- Strong dependence on its leader Elon Musk, as well as uncertainty around autonomous driving functions and their approval.
What to look for with Tesla
Operating margin in the automotive business is revealing, as it shows how price pressure, costs and economies of scale actually affect the core business.