DCF Studio

    TSLA · NMS · Consumer Cyclical

    Tesla, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 23.09

    Market price

    USD 364.27

    Implied upside

    -93.7%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Wrong toolThis model values the shares at 6.3% of the market price. A gap that size is a modelling failure rather than a view - most often an unusable beta, a currency or units mismatch, or a cashflow base that does not represent the business. Read the figures below as diagnostics, not as a call.
    AdjustedCapital expenditure runs at 9.7% of revenue against depreciation of 5.4%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.

    Current EV/EBITDA of 128.2x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 23.09-93.7%
    Exit multiple
    USD 70.86-80.5%
    Market price
    USD 364.27

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn3bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 99.8bnUSD 104.9bnUSD 110.4bnUSD 116.1bnUSD 122.2bn+5.2%
    EBITUSD 9.8bnUSD 10.3bnUSD 10.8bnUSD 11.4bnUSD 12.0bn+5.2%
    NOPATUSD 7.8bnUSD 8.2bnUSD 8.6bnUSD 9.1bnUSD 9.5bn+5.2%
    Add depreciation & amortisationUSD 5.3bnUSD 5.6bnUSD 5.9bnUSD 6.2bnUSD 6.5bn+5.2%
    Less capital expenditureUSD -9.6bnUSD -10.1bnUSD -10.7bnUSD -11.2bnUSD -11.8bn+5.2%
    Less increase in working capitalUSD -723.2mUSD -760.8mUSD -800.3mUSD -841.8mUSD -885.6m+5.2%
    Free cashflow to firmUSD 2.8bnUSD 2.9bnUSD 3.1bnUSD 3.2bnUSD 3.4bn+5.2%
    Discount factor0.93860.82680.72840.64170.5653-
    Present valueUSD 2.6bnUSD 2.4bnUSD 2.2bnUSD 2.1bnUSD 1.9bn-7.3%
    Present Value Of The ForecastUSD 11.2bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.566Reported 1.845, pulled toward 1.0 (Blume)
    Cost of equity13.61%Risk-free + beta x equity risk premium
    Cost of debt5.00%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 1438.7bn99.0% of capital
    Total debtUSD 14.7bn1.0% of capital, book value as a proxy
    Tax rate20.4%Effective, capped at statutory
    WACC13.51%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 23.09

    78% of EV

    Forecast FCFF, final year
    USD 3.4bn
    Capex at depreciation, working capital in reinvestment
    USD 9.5bn
    Less reinvestment at g/ROIC (18.5% of NOPAT)
    USD -1.8bn
    Capitalised
    USD 7.8bn
    ROIC (WACC floor)
    13.5%
    Terminal value, undiscounted
    USD 72.3bn
    Terminal value, discounted
    USD 40.9bn
    Enterprise value
    USD 52.1bn
    Less net debt
    USD -29.3bn
    Equity value
    USD 81.4bn

    Exit at 20.0x EBITDA

    Value per shareUSD 70.86

    95% of EV

    Terminal value, undiscounted
    USD 370.3bn
    Terminal value, discounted
    USD 209.3bn
    Enterprise value
    USD 220.5bn
    Less net debt
    USD -29.3bn
    Equity value
    USD 249.9bn

    Spread between methods: 102%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    11.51%26.2326.3026.3826.4526.52
    12.51%24.4724.5324.5924.6624.72
    13.51%22.9823.0423.0923.1523.21
    14.51%21.7121.7621.8121.8621.91
    15.51%20.6220.6620.7120.7520.80

    Outlined: this model. Green text: above today's price of 364.27. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Discount rate13.5%3.0%-10.5pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.