blue-chip

Book Profit on this NASDAQ - Listed EV Stock: Tesla Inc (TSLA)

Feb 07, 2023 | Team Kalkine

Read Time :5 min

This report is the updated version of the report uploaded on 7 February 2023 at 11:53AM PST

Tesla, Inc.

TSLA Details

Tesla, Inc. (NASDAQ: TSLA) is a vertically integrated sustainable energy company which also aims to transition the world to electric mobility by making EVs.

Financial Results

TSLA’s total revenue rose 37% YoY in Q4 to $24.3 Bn. Its operating income witnessed an improvement YoY to $3.9 Bn in Q4, resulting in the 16.0% operating margin.
Quarter-end cash, cash equivalents and investments rose sequentially by $1.1 Bn to $22.2 Bn in Q4, driven principally by the FCF of $1.4 Bn, partially offset by the debt repayments of $497 Mn.

Outlook

The company is planning to grow production as quickly as possible in alignment with the 50% CAGR target it started guiding to in early 2021. For 2023, it is anticipating to remain ahead of the long-term 50% CAGR with ~1.8 Mn cars for the year.

Key Risks

TSLA is exposed to risks related to COVID-19 pandemic, cyclical nature of industry, higher competition, etc.

Fundamental Valuation

EV/Sales Multiple Based Relative Valuation

Stock Recommendation

The stock has been valued using EV/Sales multiple based relative valuation (on an illustrative basis) and the target price so arrived reflects a fall of low double-digit (in % terms). A slight discount has been applied to EV/Sales Multiple (NTM) (Peer Average) (approx) considering the current trading levels as well as risks associated with the business.

Considering the current levels, leading momentum indicator charted into an overbought zone with 14-day RSI moved above 76, and risk associated a ‘Sell’ rating is assigned to “TSLA” stock at the current market price of USD 195.82 (as of February 07, 2023, at 06:48 AM PST).

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is February 7, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

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