Is Tesla the next? Peloton Let's talk about that in this video and we're going to make comparisons not only between the cash flows of the two companies, the income of the two companies, but we'll also be analyzing lead times. What news did we hear about Tesla today that we need to address? And what about Congress What did they have to do with all of this? Especially on an election day? Well, let's analyze if Tesla is the next Peloton stock set to lose 80 percent of its value in just a one-year time frame and boy oh boy. if you look at Peloton stock, it's not a roller coaster you would have wanted to ride down. You would have started at an IPO level of somewhere around 32.26 to 32 you would have ridden the wave up to 171 and dropped all the way down to sub ten dollars. again. Now that is a roller coaster, but it's one that some say is coming for Tesla and that this run that we've had for Tesla is now not only in a downtrend, but it's just the beginning of the downtrend. Let's analyze the differences between Peloton and Tesla in this video right after I Mention that. Thank you for being here I Really appreciate you. Okay, so the Peloton disaster. We remember that I've made multiple videos about Peloton back when it was around 113 dollars per share talking about why I was changing my mind and selling my Peloton stock. Unfortunately, I didn't sell it at the top at 171, but I did sell right around 113. and the reasons that led up to me selling Peloton stock were massive inflections in the fundamentals of the business. First, we saw that Google search Trends were dropping off a cliff for Peloton bikes. In addition to that, Alexa.com reviews showed that the website analytics for Peloton were starting to suffer. We noticed that page hits and average time on website were both declining substantially more than they previously had, suggesting that consumers were changing their tastes and preferences, maybe not being so interested in exercise bikes that are useful for when you're stuck at home and under under lockdown or quarantine. So we noticed this at the same time as all of a sudden Peloton's lead times for their bikes dropping from about 6 to 12 weeks all the way to one to two weeks, which is almost just your basic shipping time. In addition to that, Peloton slashed the price of the Peloton bike from over twenty five hundred dollars to the lower 2000s and eventually under two thousand. Today, they have so many of these bikes in inventory, which inventory is the worst thing to have because what happens is inventory needs to be maintained. You ended up having Rustgate and the disasters that Afflicted Peloton regarding Rustgate of Peloton bikes starting to rust, they had not only a death involving their new treadmill which led to the freezing of sales of their treadmill which is also not very good for the company overall. But the there were a lot of things that suggested uh oh, We've got some problematic headwinds ahead of us and sure enough Peloton did and the stock plummeted from 113 dollars down to under 10 dollars. So what is similar between Peloton and Tesla And then let's compare what's different and the different part is going to be very, very important because right now Tesla is trading for 194 dollars at the time of this recording and I Hate to say it, their vehicles are just becoming more available now. While it's nice that people might not have to wait as long for a Tesla, the biggest concern that individuals have is not that they won't get their Tesla soon enough if they want to order a Tesla, but rather that going into a recessionary environment or likely being in a recessionary environment already And and that environment being very uncertain in terms of how long it'll last could ultimately lead to well, less people buying Teslas And when demand goes down, obviously, lead times are going to go down like Peloton. Now there is another reason lead times could be going down, But let's take a look at what we can analyze regarding demand. First, we notice that the Model Y performance has a November potential estimated delivery date. We can see that right here. the long range has a December estimated delivery date. That essentially means if you wanted to get a Model Y, you could get it within the next month. The Model X has A little bit more extended lead times if you want the regular model X all going all the way out to March before these become available. That's about five months, but that's where the lead times end. All of the other lead types for the model X Plaid all of the Model S's available and the model 3s available all have lead times that include potential delivery in November which means they're essentially immediately available and If there are Teslas that are immediately available. We would expect there would be some kind of existing inventory under existing inventory. in this tab, which there didn't used to be an existing inventory. This used to be zero. a few weeks ago, there were six cars available within 200 miles of my ZIP code. Now, unfortunately, when I click on model threes, there are over 20 model threes available within 200 miles of my ZIP code. Not only that, though, if I type in 33324 which is a South Florida ZIP code I also get vehicles available about six. If I go to, let's go to Chicago we throw in a Chicago zip code. what do we get? We also get about seven Vehicles available. So we're starting to see more availability of vehicles on Tesla's website and Lead times for new vehicles that aren't just hanging out are also coming down substantially. And this is leading a lot of people to say that's it. Tesla's the next Peloton he's going down. But what's different between the two companies and that's really important and we're going to talk about that difference right now. Talk about spreadsheets and the big differences. I Do want to remind you though, that link down below is the biggest 60 off start to our Black Friday sales event Ever. This is the Black Friday coupon code. Prices will not be better on Black Friday This is it. Take advantage of it before that coupon code expires on Black Friday and I'm happy to announce that we are pre-selling the Elite Hustlers University course. This is all about making more money. 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All of the content for that course and the live streams and the videos. all of that starts Black Friday which we're really excited about. so get in before Black Friday All right. so what's different between Peloton and Tesla Look at this: Peloton was losing in the quarter ending September 30th, 2021 Four million dollars per day and in the quarter ending September 30th This year they're still losing four million dollars per day from operations. They can't figure out how to make money. On top of that, they've had a CEO transition and they're totally clueless in terms of how to manage their cash because they have so much inventory that they're burning their inventory almost at an opera. Well, they are an operating loss just to try to figure out how to keep the Pelton system spinning. This is really different from Tesla. Instead of losing four million dollars per day, Tesla's cash provided in Q2 which is when Shanghai their most productive Factory was shut down was about 25 million dollars per day and in Q3 when Shanghai came alive again, it bumped up to about 50 million dollars per day in cash. That Tesla is generating operating profits, not losses, and these numbers are getting better and expected to be even larger in the fourth quarter. This is phenomenal and even if you subtract out the amount of money they're investing into factories like the 1.8 billion dollars they spent in Q3, they still had over three billion dollars of free cash flow left over. So already you've got two massively different companies, one that actually prints money Tesla and one that doesn't Peloton Now Sure, lead times are going down for Teslas but that could be for a good reason. see: Elon Musk has told us he thinks the wait times are actually really bad for Tesla because they just encourage somebody to go buy another electric vehicle from another dealer or another manufacturer Because hey, people don't want to wait for the for a new car. When they make the decision to buy a new car, they want a new car now so they can go buy a fuel efficient Prius from Toyota. They might go do that instead of waiting for a Tesla Now maybe they'll buy a Ford Maki Or they'll buy a pickup truck or whatever they want to buy. So this is where some are saying that Tesla's falling lead times are actually just going to enable Tesla to expand the number of customers they could have at Tesla and actually capitalize more market share during the recession than any other. Electric Vehicle Manufacturer Can during the recession? Think about that? From an exciting point of view, that basically means Tesla could eat the competition alive while printing cash, taking more market share in a recession. while the other companies can't even produce a profitable electric vehicle, look at Ford For example, they don't have a profitable electric vehicle. They ate it. They lost a lot of money on the Uh Mach E model and they're still losing money. That's scary. Contrast that with Tesla it means Tesla can just continue to make more cars and hopefully take away customers from companies like Ford or GM or other electric vehicle companies. And then when we come out of this recession and it's boom time for everyone again, Tesla's now already so much further ahead because I truly believe once people get into the Tesla ecosystem, they don't leave. It's kind of like you get into Apple and then you feel like you're stuck. I Don't see people trading out of a Tesla once they own a Tesla And this brings up this idea that maybe in the short term we're seeing a little bit of fun because some believe a republican-controlled congress which could potentially happen might end up trying to unwind the inflation Reduction act which promises large tax credits for electric vehicles with certain conditions and electric batteries and so on as well as solar panels and everything starting in 2023 which could also be a big Catalyst for more sales. However, as long as Joe Biden as President, I don't believe that Biden will actually sign something to overturn the inflation reduction act. So I actually don't believe that's a very good reason to suggest that that EV stocks are falling because Republicans might try to end the inflation reduction act which again has has a large Uh Energy tax credit component to it. But what you do have is fud from a recall this morning. Yet another recall led to yet some more fud over at Tesla and and the world of people who like to bag on Teslas Take a look at this tweet that I sent this morning I sent this tweet headlines everywhere Tesla Steering Failure Recall Stock drops Tesla down five percent panic and then those are like the headlines I Mean, look at some of these headlines Okay, Recall plagued Tesla calls back another 40 000 cars over possible steering issue. Then none of these say this in the headline, but when you read the actual article, you see a little note at the bottom of all these fud stories that say this is a voluntary recall that requires an over-the-air software update. Could you imagine seeing all of these alerts when Apple sends you a software update for your phone Recall plagued Apple requires users to install update voluntarily. It's quite sad. Honestly, it's quite sad. So what do we actually think for Tesla Like Bottom line: What do we actually think for Tesla Well, I actually think this is a phenomenal opportunity to understand that the market is emotional. The market is like a little child. It's stupid in the short term. In the short term, it's gambling. That's all the market is is. In the short term, it's just gambling. It's a casino. In the long term, we can actually evaluate what true fundamentals are. and my belief is that you don't even need to give any dime of credit to full self-driving revenues from Tesla. Uh, you give some obviously in the revenue per vehicle, but you don't have to give anything to semis cyber truck insurance. Robo taxis the the bot that can't walk which I'm actually really optimistic on. uh, but you know people like to make fun of it. You don't have to give any credit to that. As long as Tesla can maintain about a 29 uh, profit margin. gross profit margin on on the sale of vehicles Tesla should be worth should be worth about 481 dollars at the end of 2025. And since Tesla right now is trading for about 190 bucks, that would represent a 26 percent compounded annual return over the next four years, That's actually pretty incredible. 23, 24, 25. Wait a minute. That's only three years away. Oh oh, I'm gonna change that to three years. That would represent a 36.3 percent compounded annual rate of return. And if Tesla can get that margin back and maybe even above 30 percent, let's change this to Uh 31 margin. So 69 expense. Oh my Gosh. Tesla Stock could shoot up to 546 dollars per share. A compounded annual rate of return over the next three years of 42 every single year? This is phenomenal. This is phenomenal. Now, what could hurt this is a lower P E ratio. But I don't believe that Tesla's P E ratio in the future can really be lower than their growth rate. In fact, their P E ratio could be as high as two times their earnings growth rate. And right now, we expect Tesla earnings to be growing roughly at about 50 percent. So about 1.1 times for a PEG ratio Tesla has pricing power. Tesla has substantial growth, and it makes little sense to see that Tesla's P E ratio would converge anytime soon to levels as low as what you see with Google or Apple which Apple's usually around, you know, 27 to 30.. Google's uh, relatively low. but then again, their growth has slowed substantially. They're somewhere around 12.

we don't actually expect to see numbers like that or like the stagnant vehicle manufacturers who are around like nine times earnings, right? Uh, we don't expect to see that for Tesla uh, until probably in the 2030s when Tesla's growth actually slows. But in the short term, there are a lot of fears that Tesla is not a good company to invest in during a recession because people won't buy cars. and so far that's being evidenced by lower lead times. I Think that is a reasonable concern, but I actually think these lower lead times are a huge benefit to Tesla and the Tesla Community Because this recession is going to be the time where Tesla just eats up all the competition. Obviously, not all of it. But I expect their market share to substantially increase during the recession, whereas other companies will likely see their market shares decline during the recession as they panic because of recessionary costs and losses which Tesla doesn't have, they're printing money. So have I changed my opinion on Tesla? Not at all. If anything, it looks even juicier right now than it did at you know, 210 or 220 or 230 or 240. But hey, you know what? That's what the market does. It goes up and down and folks, thank you so much for watching. Check out those programs on building your wealth down below, especially the new Hustlers course and we'll see in the next one.