Fundamental Analysis
Tesla’s mission is to accelerate the world’s transition to sustainable energy.
Tesla was founded in 2003 by a group of engineers who wanted to prove that people didn’t need to compromise to drive electric – that electric vehicles can be better, quicker and more fun to drive than gasoline cars. Today, Tesla builds not only all-electric vehicles but also infinitely scalable clean energy generation and storage products. Tesla believes the faster the world stops relying on fossil fuels and moves towards a zero-emission future, the better.
High level decisions on buy or sell for a stock should be driven by
1. The margin that the company makes. i.e. Out of $1 that the company sells how much does the company taken home.
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- Here we see TESLA makes a margin of 13% on Gross Level and about -20% on Net level This means that out of $1 that it makes a loss of $0.2.
2. The growth rates of the company on revenue, net income, EPS and Dividend. i.e. If it sold $1 last year how much more did it sell this year.
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- Here we see TESLA grew at a rate of 26% in the revenue and but the loss figure almost doubled.
3. The efficiency ratios of the company on Equity and Assets. i.e. How well is the company able to sweat each $1 that it puts to work in the company.
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- Here we see since TESLA is a loss making company the Return on Equity and Return on Assets are negative.
Here we see that TESLA scores poorly on the Growth figures, Efficiency Ratios and has a huge Debt/Equity ratio that may make repayment of Debt difficult.
Off course the cars look like they have been imported from another planet though. So if you have some risk capital that you don’t mind going to zero, then you should invest just that portion in TESLA, since you never know in 30 years, each car on the street in every city in the planet could be a TESLA electric car.
All these ratios can be found in the attached excel sheets and are based on the EDGAR report submitted by TESLA to the SEC. All the data on the above analysis can be found at the link below
Balance Sheet
Income Statement
