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Discussion Thread: Financial Analysis
Cristhian Torres-Hage
Department of Business, Liberty University
BUSI 530: Managerial Finance
Charles Smith
October 28, 2021
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Discussion Thread: Financial Analysis
Tesla is a technology company that designs, develops, and manufactures electric vehicles
and software as well as energy generation and storage systems internationally. Their cars can
be powered by the outlet in your garage or by the vast network of Tesla Superchargers which it
has installed nationwide. Tesla’s mission is to accelerate the world’s transition to sustainable
energy through increasingly affordable electric vehicles and energy products [ CITATION Gig21
\l 1033 ]. Although the company is known for making cars, it is considered by many to be a
technology company like Apple or Google that also makes cars.
The United States is the second largest market for vehicles sales and production in the
world selling over 17 million units four years in a row in 2018 [ CITATION Aut21 \l 1033 ]. The
market size, measured by revenue, is $82.6 billion in 2021. Electric Vehicles only make up 2.2%
of the global vehicle market share and less than 2% of the U.S. vehicle market share. This
means
that there is a lot of opportunity for EVs to expand and take more of the market share. Tesla
makes up 13.9% of the global EV market and 66.3% of all new EV registrations in the U.S. in
2021 [ CITATION Tes21 \l 1033 ].
Tesla recently made news having become the first carmaker manufacturer to surpass a
valuation of $1 trillion. Tesla delivered more than their estimated 232,000 vehicles for the
quarter and is set to increase their supply in the coming years with their new Gigafactory set to
open in Texas. Tesla stock has recently gone up to $1,077 from $782 per share just one month
ago. According to our textbook, “stock prices and company values summarize investors’
collective assessment of how well a company is doing, both its current performance and future
prospects. Thus, an increase in stock price sends a positive signal from investors to managers”
Automotive Industry United States. (2021, October). Retrieved from SelectUSA:
https://www.selectusa.gov/automotive-industry-united-states
Brealey, R. A., Myers, S. C., & Marcus, A. J. (2020). Fundamentals of Corporate Finance. New York:
McGraw-Hill Education.
Finance. (2021, October). Retrieved from Yahoo: https://finance.yahoo.com/quote/TSLA/analysis?
p=TSLA
Gigafactory. (2021, October). Retrieved from Tesla: https://www.tesla.com/gigafactory
Tesla Market Share. (2021, October). Retrieved from Business Insider:
https://www.businessinsider.com/tesla-market-share-drops-ford-gm-audi-2021-10#:~:text=From
%20January%20through%20June%202020,to%20Experian%20data%20published%20Monday.
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[ CITATION Bre20 \l 1033 ]. Yahoo Finance analysis shows that Earnings Per Share Actual on
9/29/2021 was $1.86 which overperformed the estimate of $1.59. For all of 2021 EPS is
currently at $6.03 and is expected to reach $7.91 for 2022. The revenue estimates are set to
increase by about $18 billion by the end of 2022 [ CITATION Fin21 \l 1033 ]. Based on this
information, Tesla is a recommended short-term investment and is a promising long-term
investment as well.
References
