In-Depth Look at Tesla's Financial Health
By Terry Bingman, Financial Analyst
1. Executive Summary
Tesla Inc. (NASDAQ: TSLA), based in Austin, Texas, is a leading company making electric cars and clean energy products. Tesla also works on future technologies like artificial intelligence and robotics.
As of June 21, 2024, Tesla's stock price is $183.01, with a market value of $573.46 billion. This means the total value of all Tesla shares added together is over half a trillion dollars. Let's break down how the company is doing financially and consider its stock price for future investments.
2. Company Overview
Business Activities:
- Electric Vehicles (EVs): Tesla makes and sells electric cars like Model S, Model X, Model 3, Model Y, Cybertruck, and Tesla Semi.
- Energy Solutions: Tesla also offers batteries for storing energy (Powerwall) and solar products like solar panels and roofs.
- Emerging Technologies: The company invests in cutting-edge tech like AI and robotics.
Key Data (as of June 21, 2024):
- Stock Price: $183.01
- Market Cap: $573.46 billion
- 52-week Range: $138.80 – $299.29
- P/E Ratio: 46.81 (how much you pay for $1 of Tesla's earnings)
- CEO: Elon Musk
- Employees: 140,473
Jargon Explained:
- Market Cap: The total value of a company's shares.
- P/E Ratio: Price-to-Earnings Ratio—helps to see if a stock is over or under-valued. Example: A P/E of 46.81 means you pay $46.81 for every $1 Tesla earns.
3. Financial Performance Analysis
3.1 Historical Stock Price Analysis
Price Movements:
- December 2023 – January 2024: Stock fell from $252.54 to $212.19 due to market concerns.
- January – April 2024: Continued to fall due to worries about profits.
- April – June 2024: Recovered somewhat but stayed unpredictable.
3.2 Balance Sheet
| Quarter | Cash & Short-Term Investments | Total Assets | Total Liabilities | Total Equity | Shares Outstanding | Return on Assets (%) | Return on Capital (%) |
|———|——————————-|————–|——————-|————–|——————–|———————–|———————–|
| Q1 2024 | $26.86 billion | $109.23 billion | $44.05 billion | $65.18 billion | 3,189,196,167 | 2.71 | 3.95 |
| Q4 2023 | $29.09 billion | $106.62 billion | $43.01 billion | $63.61 billion | 3,184,790,415 | 5.15 | 7.60 |
Key Takeaways:
- Liquidity: Tesla has a lot of cash, suggesting strong financial health.
- Profitability: The Return on Assets (ROA) and Return on Capital (ROC) have decreased, meaning Tesla made less profit from its assets and capital.
3.3 Income Statement
| Quarter | Revenue ($) | Operating Expense ($) | Net Income ($) | Net Profit Margin (%) | EPS ($) | EBITDA ($) | Effective Tax Rate (%) |
|———|————-|———————–|—————-|———————–|———|————|———————–|
| Q1 2024 | $21.30 billion | $2.53 billion | $1.13 billion | 5.3 | 0.34 | $2.42 billion | 26.34 |
| Q4 2023 | $25.17 billion | $2.37 billion | $7.93 billion | 31.5 | 2.27 | $3.30 billion | -262.53 |
Key Takeaways:
- Revenue: Money from Tesla's sales has dropped in Q1 2024, leading to fewer profits.
- Profit Margins: Tesla's profit margins have shrunk, meaning they keep less money after expenses.
3.4 Cash Flow Statement
| Quarter | Net Income ($) | Cash from Operations ($) | Cash from Investing ($) | Cash from Financing ($) | Net Change in Cash ($) | Free Cash Flow ($) |
|———|—————-|————————–|————————-|————————-|————————|———————-|
| Q1 2024 | $1.13 billion | $242 million | ($5.08 billion) | $196 million | ($4.73 billion) | ($2.89 billion) |
| Q4 2023 | $7.93 billion | $4.37 billion | ($4.80 billion) | $887 million | $599 million | $730.88 million |
Key Takeaways:
- Cash from Operations: Tesla's cash from daily activities is down, showing less operational efficiency.
- Free Cash Flow: Negative free cash flow in Q1 2024, indicating potential cash problems.
Terminology Examples:
- Free Cash Flow (FCF): Shows how much money Tesla has after its expenses.
- Example: If you get $500 a week and spend $400 on bills, your free cash flow is $100.
4. Stock Price Prediction
Factors Influencing Stock Price:
- Market Sentiment: How investors feel can move stocks up or down.
- Example: If people are worried, they may sell, causing the price to drop.
- Financial Performance: Tesla's revenues, profits, and cash flows impact stock prices.
- Innovation and Product Development: New products and tech from Tesla can boost its stock.
- Regulatory Environment: Clean energy laws can help Tesla grow.
Short-term Forecast (Next 3 Months):
Based on current data, Tesla's stock is expected to stay between $170 to $200. The next earnings report and market conditions will play a big role.
Long-term Outlook (Next 12 Months):
If Tesla continues to innovate and improve, the stock could rise to $220-$240. This depends on successful strategies and staying ahead in tech.
5. Conclusion
Tesla is a key player in electric cars and clean energy. Despite some recent financial challenges, its future looks promising. Investors should watch for financial performance and market trends.
Disclaimer: This analysis is for informational purposes. Do your own research and consider your risk before investing.
