In this blog post we will carry out an in-depth fundamental & technical analysis of Tesla shares. We will do a comprehensive analysis of the Tesla stock’s performance and outlook.
Business description:
From fundamental & technical analysis of Tesla shares, Tesla designs, develops, manufactures, sells and leases all-electric vehicles and energy generation and storage systems. The company’s automotive products include Model 3, Model Y, Model S, and Model X. Powerwall and Megapack are the company’s lithium-ion battery energy storage products.
Revenue and Income:
From fundamental & technical analysis of Tesla shares, in the three months ended March 31, 2023, Tesla’s revenue increased 24% to $23.33 billion but net income fell 24 percent to $2.52 billion. Earnings shock (-1%) was recorded as expected earnings per share was 0.858586 and actual announced value was 0.85.
“Earnings shock” of -1%, refers to a difference between the expected earnings per share (a measure of Tesla’s profitability) and the actual announced value.
Financial strength:
From fundamental & technical analysis of Tesla shares, Tesla has a current ratio of 1.6, a long-term debt-to-equity ratio of 2.6 and a short-term ratio of 1.0. Current EV/EBITDA is 37.8.
Current ratio: This is a liquidity ratio that measures a company’s ability to pay its short-term debts using its short-term assets. Tesla’s indicates that it is in a good position to meet its short-term obligations.
Long-term debt-to-equity ratio: This is a leverage ratio that measures the amount of long-term debt a company has relative to its equity. This indicates that Tesla relies heavily on debt financing to fund its operations.
Short-term ratio: This is another liquidity ratio that measures a company’s ability to pay its short-term debts using its most liquid assets. Tesla’s short-term ratio of 1.0 suggests that the company has $1 in highly liquid assets for every $1 in short-term liabilities.
EV/EBITDA: This is a valuation ratio that compares a company’s enterprise value (EV) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). Tesla’s current EV/EBITDA of 37.8 suggests that the company is currently overvalued by the market, as investors are willing to pay $37.8 for every $1 of EBITDA generated by Tesla.
Growth:
From fundamental & technical analysis of Tesla shares, Tesla has seen significant growth over the past five years with his EPS growth of 121.7% year-over-year and revenue growth of 47.3%.
The EPS growth of 121.7% year-over-year means that Tesla’s earnings per share increased by 121.7% compared to the previous year. Revenue growth refers to the increase in the company’s total revenue over time. In this case, Tesla’s revenue grew by 47.3% over the past five years. This indicates that Tesla has experienced significant financial growth and success in recent years.
Effect:
From fundamental & technical analysis of Tesla shares, Tesla has demonstrated a strong return on assets of 15.5% (TTM), return on equity of 28.7% (TTM) and return on investment of 23.3% (TTM). TTM is an abbreviation used in finance to denote “Trailing Twelve (12) Months”. It pertains to numerical data that reflects a company’s performance over the previous 12 months.
Tesla, as a company, has shown impressive financial performance in the past 12 months. Return on assets (ROA) is a measure of how efficiently a company uses its assets to generate profits, and Tesla’s ROA is 15.5%.
Return on equity (ROE) is a measure of how much profit a company generates with the money shareholders have invested, and Tesla’s ROE is 28.7%.
Return on investment (ROI) is a measure of how much profit an investor has made from their investment in a company, and Tesla’s ROI is 23.3%. These figures indicate that Tesla has been successful in generating profits for its shareholders and investors.
Profitability:
From fundamental & technical analysis of Tesla shares, Tesla has a gross margin of 23.1% (TTM), a net margin of 13.8% (TTM) and an operating margin of 14.8% (TTM).
Gross margin refers to the difference between revenue and the cost of goods sold, expressed as a percentage.
Net margin is the percentage of revenue that remains after all expenses, including taxes and interest, have been deducted.
Operating margin is the percentage of revenue that remains after deducting operating expenses, such as salaries and rent.
Price related:
From fundamental & technical analysis of Tesla shares, Tesla’s current price-to-earnings ratio is 56.87, price-to-book ratio is 13.67, and price-to-cash flow ratio is 37.13. Beta version is 2.64.
Price-to-earnings ratio (P/E ratio) is a valuation ratio that compares a company’s current stock price to its earnings per share (EPS). A higher P/E ratio indicates that investors are willing to pay more for each dollar of earnings. Tesla’s P/E ratio is 56.87, which is relatively high compared to the industry average.
Price-to-book ratio (P/B ratio) compares a company’s current market price to its book value per share. Book value represents the value of a company’s assets minus its liabilities. Tesla’s P/B ratio is 13.67, which means that investors are currently paying more than 13 times the book value of the company’s assets.
Price-to-cash flow ratio (P/CF ratio) compares a company’s current stock price to its cash flow per share. Cash flow represents the amount of cash generated or consumed by a company’s operations. Tesla’s P/CF ratio is 37.13, which is relatively high compared to the industry average.
Beta version (beta coefficient) measures the volatility of a stock compared to the overall market. A beta of 1 indicates that a stock’s price moves in line with the market, while a beta greater than 1 indicates higher volatility and a beta less than 1 indicates lower volatility. Tesla’s beta version is 2.64, which means that the stock is more volatile than the overall market.
Analyst Opinion Report:
From fundamental & technical analysis of Tesla shares, the average investment opinion is 2.53 points on a scale of 1 to 5, where 1 is a strong buy, 2 is a buy, 3 is a hold, 4 is a sell, and 5 is a strong sell.
Evaluation report:
From fundamental analysis of Tesla shares, based on a residual income model, the intrinsic price is estimated at around $70.73, suggesting a potential downside, if it happens technically. It is referring to a method of estimating the value of a company’s stock called the residual income model.
According to technical analysis, the estimated value of the Tesla stock can be between $258.60 and $348.62. However, this range suggests that there is a possibility that the Tesla stock may increase in value in the near future.
The term “intrinsic price” refers to the true or underlying value of the stock, as opposed to its market price.
The term “residual income” refers to the income that remains after deducting all expenses and taxes, and is used in this model to estimate the future earnings of the company.
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