MASTERS IN FINANCE EQUITY RESEARCH TESLA MOTORS, INC COMPANY REPORT CONSUMER GOODS 05 DECEMBER 2014 STUDENT: FREDERIC MÜLLER (#774)
[email protected] Emotionally Charged? Recommendation: BUY Vs Previous Recommendation Buy Profitability is determined by mass-market entrance Price Target FY15: 249.22 € . As of today the company is serving a luxury niche Vs Previous Price Target 221.71€ market. The successful exit into the mass-market lies at the very Price (as of 02-Jan-2015) 180.10 € heart of Tesla’ profitability. Therefore the share price will highly Reuters: TSLA.OQ, Bloomberg: TSLA:US depend on the acceptance of electronic vehicles as a substitute for conventional cars. 52-week range (€) 103.71 – 221.04 Market Cap (€m) 23.443,97 . EV market growth is driven by technological break- Outstanding Shares (m) 124.62 throughs as well as governmental incentives. The latter is still 50 day moving average 186.78 Source: Bloomberg lacking sufficient engagement in many countries. Our model ex- 180% 200% pects the company to be profitable after taxes only in 2016, despite 160%180% Company vs PSI20 140%160% 200 140% perceptible revenue growth, implying negative EPS until then. R&D 120% 120% 100%150 100% expenses are as high as 13.79% of revenues in 2014 demonstrat- 80% 80% 60%100 60% ing the firm’s intentions to tackle technological innovations. 40% 40%50 . High CAPEX will diminish cash flow to investors over 20%20% 0%0%0 01/1412/1302/1401/1403/1402/1404/1403/1405/1404/1406/1405/1407/1406/1408/1407/1409/1408/1410/1409/1411/1410/1412/1411/1401/1512/14 01-01-08 01-03-08 30-04-08 29-06-08 years to come with projected positive cash flows in 2018.