Tesla, Inc. designs, develops, manufactures, and sells electric vehicles and stationary energy storage products in the United States, China, Norway, and internationally. More info.
The calculations below outline how an intrinsic value for Tesla is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.
See our documentation to learn about this calculation.
|Levered FCF (USD, Millions)||$-2,169.60||$-744.88||$808.79||$1,635.05||$2,522.00|
|Source||Analyst x9||Analyst x4||Analyst x7||Analyst x5||Analyst x2|
Discounted (@ 8.5%)
Present value of next 5 years cash flows:
Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = $2,522 × (1 + 2.5%) ÷ (8.49% – 2.5%)
Terminal value based on the Perpetuity Method where growth (g) = 2.5%:
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
Value = Total value / Shares Outstanding ($29,397 / 168)
Value per share:
Current discount (share price of $246.23): -41%
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 8.49% = 2.47% + (0.8 * 7.53%)
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
0.714 = 0.637 (1 + (1- 30%) (17.24%))
Levered Beta used in calculation = 0.8
Are Tesla's annual earnings growth expected to exceed 3.6% over the next 3 years?
Mr. Elon R. Musk founded Space Exploration Technologies Corporation in June 2002 and serves as its Chief Executive Officer, Chief Rocket Designer and Chief Technology Officer. Mr. Musk is a Co-Founder of Tesla Motors, Inc. and has been its Chief Executive Officer since October 2008 and serves its Product Architect. He co-founded PayPal and served as its Chief Executive Officer from May 2000 to September 2000. Prior to PayPal in 1995, he co-founded Zip2 Corp. with investments from the New York Times Co., Knight-Ridder, MDV, Softbank and the Hearst Corp. After, he served as the Chairman, Chief Executive Officer and Chief Technology Officer since March 1999, he sold Zip2 to Compaq for the largest cash deal in Internet history. He founded X.com Corporation in March 1999, which merged with Confinity, Inc. in March 2000. He served as the Chief Executive Officer of X.com from March 1999 to December 1999. He served as the Chairman of the Board at SolarCity Corporation from July 2006 to November 21, 2016. He served as the Chairman of PayPal, Inc. and Zip2 Corp. He served as a Director of Everdream Corporation and Halcyon Molecular Inc. He has been the Chairman of the Board at Tesla Motors, Inc. since April 2004. He has been a Director of Tesla Motors, Inc. since April 2004 and PayPal, Inc. since March 1999. He serves as a Director of Space Foundation. He serves as a Director of XPRIZE Foundation, Inc. He served as a Director of Perquest Inc. He served as a Director of SolarCity Corporation from 2006 to November 21, 2016. He served as a Non Executive Director of Surrey Satellite Technology Limited. In addition, he is a trustee of the X Prize Foundation and the Musk Foundation, both of which have a strong interest in promoting renewable and environmentally friendly energy technologies. Mr. Musk holds a B.S. in Physics from the University of Pennsylvania and BS in Economics from The Wharton School of the University of Pennsylvania in 1995.
Average tenure of the Tesla board of directors:
Tesla, Inc. designs, develops, manufactures, and sells electric vehicles and stationary energy storage products in the United States, China, Norway, and internationally. The company primarily offers sedans and sport utility vehicles. It also offers electric vehicle powertrain components and systems to other manufacturers. The company sells its products through a network of Tesla stores and galleries, as well as through Internet. In addition, it designs, manufactures, installs, monitors, maintains, leases, and sells solar energy systems to government, residential, and commercial customers; and sells electricity generated by solar energy systems to customers. The company was formerly known as Tesla Motors, Inc. and changed its name to Tesla, Inc. in February 2017. Tesla, Inc. was founded in 2003 and is headquartered in Palo Alto, California.
|Market Cap:||$41,345 million|
3500 Deer Creek Road, Palo Alto, 94304, United States
|Sector:||Automobiles and Components|