Hey everyone me kevin here: all right office is still a mess, but i owe you an update on a tesla tesla had absolutely phenomenal earnings this week and it's actually down on the week. Well, we've got to talk about this and why i believe that if it weren't for the federal reserve this entire month, tesla would have already surpassed sixteen hundred dollars per share this month. It obviously hasn't, but let's talk about where my thesis is and my response to the folks who say tesla is just an extremely overvalued company. It's a dumb company to invest in and it's way too risky.

Let's talk about that because i think it's way too risky. Not to invest in tesla, okay, folks. First, this is not financial advice. These are my opinions.

Second, most companies have a single product or line of products that are extremely innovative and useful to customers, for example, take adobe. We love adobe, adobe, premiere, adobe photoshop, adobe lightroom, but once you acquire customers with an amazing product and you grow for many years in a row, what do you do once you've acquired them? Well, you try to prevent people from leaving to different services, like maybe going to final cut on the mac and no longer using premiere or whatever. Well, at the same time, maybe the company will continue to update their software to minimize people leaving and providing more competitive elements, but really at some point after you grow after you have your first sort of blow up your exponential growth, like oh, my gosh, everybody's, using Pdfs, remember: pdfs are a creation of adobes. You get this big growth curve, it almost seems exponential, but because of the law of large numbers, exponential can't go on forever with businesses, so you tend to have a leveling off.

This is what we call the s-curve slow growth at the beginning of a business exponential growth at the boom of a product or service, and then a capping out and to add growth. You end up having to add new types of businesses like analytics for ads, something that adobe is doing and that's great. It is now helping adobe achieve a wall street forecasted average growth rate of 12 for the next five years. Its projected earnings this year are 13.7 dollars, which means at 408 dollars per share its closing price.

Today april 22nd, here adobe sells for 30 times earnings simple all we did. There is divide the price by 13.7 cents or 70 cents of earnings boom. You get 30.. That's a multiple: it's a p ratio.

It's like a gross rent multiplier or once you get down the line more like a net rent multiplier, but don't worry so much about that for those real estate. Folks, they'll know what i mean when i say grm now. Another cool thing that you could do, though, is you can take this growth rate. We're going to do this with tesla as well that the company's growing at which is 12 and actually divide the multiple that you're paying for the company uh by the growth growth rate.

So if you take 30 times earnings that the company's selling for right now and divided by the growth rate, you get the peg ratio in this case that would be 2.19 approximately, because you're dividing 30 by a growth rate of about 12. okay makes sense. Now. This is also when most people look at the chart of a company like adobe and say: oh adobe, i'm paying about 2.19 in terms of a peg ratio.

30 times 2022 earnings it's down 27.5. This year to date, if you go out 12 months, it's down 20. So, in other words, it's been on a large downtrend and some folks might look at this and say: hey here's an opportunity to buy adobe at a discount, but wait a minute discount to what a euphoric stock market or is there some spectacular new, innovative growth coming To adobe see here, you're buying a falling stock with a 30 times earnings rate and a peg ratio of 2.19 thanks to the 12 growth rate, so you're investing in adobe for 12 growth and you're, paying 30 times earnings for that. Okay.

These folks might then also think well using similar metrics here. If we just look at price to earnings, tesla is ridiculously overvalued. I mean trillion dollar company for an auto manufacturer. That seems crazy, and this is unfortunately, where most investors completely misunderstand stocks.

Margins and tesla see tesla has phenomenally high margins and margins that are shockingly growing during inflationary times. Imagine when we don't have inflation and how much margin expansion we could get. We thought 30 percent in margins could be good, but when we get things like the cyber truck, we might actually be knocking on the door of 35 to 40 margins. But forget about that, for men forget about the fact that the company is becoming much more efficient than any car company to have ever existed before.

Tesla today, almost entirely is a car manufacturer, and at this point, if we stack up the numbers of tesla versus adobe, we find that tesla has an earnings per share of an estimate of about 15.9 this year at a thousand dollars. That means it's trading. For about 63 times, earnings, that's more than twice adobe's valuation right seems like a rip-off like adobe was trading for 30 times earnings. Why am i paying 63 times earnings for tesla kevin? Do you just proved yourself? It's a rip-off, well you're, going to miss the boat.

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Don't wait to start building your credit go check out scoremaster in the link in the description down below to get my special pricing. Okay, so i left off mentioning that adobe is selling for about 30 times. Earnings and tesla is selling for 63 times earnings, which makes it seem like you're, paying almost well actually a little bit more than two times the valuation for tesla. As you are adobe right, because you know they're selling for uh a pe of about 30 and the tesla's right around 60 63., but wait a minute adobe's growing at 12.

How does that compare to tesla, ah well? Tesla is actually growing at more than 50 percent. If you believe what elon said - and that's average over the next five four to five years, unless of course all of a sudden consumers decide they hate teslas, that would be a big risk factor right. If, if consumers all of a sudden decided they hate teslas, i promise you. This tesla will crash faster than a model s plaid carrying netflix's earnings.

That's really bad, but wait a minute. Sixty percent growth is literally five times the growth of adobe for only twice the price, so you're getting five times the growth for twice the price and you're paying a peg ratio of about one. Because, again, you take that pe ratio 2022pe of about 60 to 63 divided by the growth rate of the 60, that's about one, so you're paying twice the price to get five times the growth you're getting less than half on the peg ratio. This actually in terms of a growth stock, makes tesla bargain that makes tesla at least two and a half times more attractive than adobe.

Now some folks might disagree with that again. If people stop buying tesla cars, you've got a big problem, but now we've got to think about the s-curve of demand for tesla because see tesla is more than just a vehicle manufacturer. It's really a holding company. If you think about it, there are four major other s-curves that we haven't even talked about and i'm not even considering the cyber trucker semi truck.

No, no, those are all part of the cars businesses. It's all part of the big five businesses, the cars and the four others think about the big businesses. They have number one: cars, duh, high margin, cars, high quality cars, some of the safest cars to ever exist on the road. That's number one and everybody wants one number, two full self-driving chips, ai and autonomy.

It's almost like an, and i know this sounds a little crazy, but it won't be crazy in the future. I expect it's almost as if tesla has its own qualcomm and nvidia in its portfolio that it's holding that's because tesla makes incredible chips, in-house they're, not making chips for you to play video games or for you to play. You know, with bitcoin they're a chip maker to learn real world artificial intelligence, to train neural nets and to make our cars more efficient, use less power react quicker, better, faster and, of course, more efficiently than ever before, see they're an ai developer and a chip maker. If you want chips to mine again, you know bitcoin or you just want a regular ai developer and chip developer.

I think in the future, nvidia and qualcomm are going to be great companies. Maybe at some point in video, with their partnership with lucid, will bring out some form of lane keep assist. They have a partnership so we'll see but see tesla's, not just a car company. It's a car company and a chip company and an ai company.

That's business! One and business two think of business: three: a battery and energy company they're, making their own supply number four they're, an insurance company, one of uh warren buffett's greatest home, runs at least as told by his uh biography, warren buffett and the snowball of wealth. One of his greatest home runs was going heavy in on geico early and you might think bo, but it's it's too late for tesla right. I don't think so, because then you've even got business number five robotics and i think an easy way to visualize this and how impactful uh these s-curves could really be in the future is is really by understanding the power of being a battery maker and an ai Developer and a robotics manufacturer, we think that the car business is everything. That's it.

You know once the car businesses, you know, hits the top of its growth curve it's over for tesla. Let's see the beautiful thing is, and i saw this from uh value analyst number one on twitter. This is somebody that i met uh at the uh rodeo parties in austin, texas, cool guy. Take a look at this folks.

I think you'll like this. What we're so used to as the s-curve is right here. This is your electric vehicle s-curve. Now i might disagree with the size of some of these, but what tesla is is actually a company that has compounding s-curves and right now, you're only paying for this green section right here.

That's what you're paying for you're paying for the green. That means you're getting fsd and robo-taxi for free. That's the self-driving, the fsd, the chip side right. That means you're getting a battery manufacturer, potentially even here in the future.

A lithium miner we'll see what elon ends up pulling out of his hat you're. Getting an energy company essentially for free, but look at the biggest of the s curves, that's almost like investing in the best possible robotics startup ever folks, ai robots, it's not just manufacturing robots! That test like in seller, license it's the future of robotics in our homes. The optimus these are the things that you're betting on with tesla you're, not just betting, on electric vehicles and, quite frankly, even if you were betting on electric vehicles, tesla is two and a half x more attractive than adobe, thanks to its phenomenal growth perspective. Again, if you don't believe in the growth perspective, don't invest in tesla, because we can't yet value fsd robo taxi, because we just haven't seen it full scale.

Although i watch fsd videos every day - and i know it's getting better and better and better one day i'll get an invite to fsd, we know the battery business is getting better and better and better and they're. Probably the folks over at tesla are probably some of the most brilliant minds for battery engineering and then, of course, that optimus robot so long story short, i'm really happy. I am super heavy in on tesla and all of this nonsense, right now with the federal reserve, is creating a delicious, short-term buying opportunity, we'll see on the other side of this madness, and your goal is not financial advice. How many tesla shares can you stack up? See the next one bye.