Over the past few months, there's been a lot of fear, uncertainty and doubt surrounding tesla stock people on all types of social media platforms are selling tesla stock and bearish coverage on tesla has garnered substantial attention. Lately, on the flip side, many say that tesla stock will reach monstrous highs without much calculation behind those kinds of price targets on both sides of the debate. There's a lot of misinformation with the majority of the misinformation coming from the bearish side, for example, this video, which is blown up recently and has over 2.4 million views, claims that tesla obtains lithium from young children overseas in order to criticize tesla's ethics. It is also obvious to the young children working in your overseas living minds.

However, the truth was that picture shown in the article was from a cobalt mining congo that tesla does not directly source cobalt from and indirectly obtains cobalt only from qualified refiners. In this video. I will cover the simple truth about the value of tesla stock and dispel any myths about tesla along the way full disclaimer. As many of you already know, i'm a long-term tesla shareholder, but i am extremely conservative with my numbers in comparison to other bulls that you'll soon see welcome to caskians academy.

If you're new to the channel, please consider subscribing for more content like this and let's get right into it. Tesla has multiple revenue streams that are all in different sectors. So it's difficult to project and calculate the value of tesla stock. However, by dissecting each revenue stream, one by one, we can get a relatively accurate estimate on the future of tesla.

Over the past few weeks, there have been so many investors focusing on the short term, with reports coming in about tesla's delivery numbers for certain months in china day after day. These types of concerns are not only unnecessary, but also detrimental for those who are interested in looking at the bigger picture. In fact, when talking about how some investors were underwhelmed by tesla's battery day, elon musk said sell your stock, i don't care lately. Many investors have also been capitulating which manifests how those investors did not do enough research prior to investing in tesla stock and other assets that they sold.

This image perfectly demonstrates how, in the short term, the market acts on how the majority perceives a stock. If almost all speculators are greedy, then the price may be peaking in the short term. On the contrary, if almost all speculators are fearful, then the stock price will likely go up in the short term for the following calculation, i'll, be projecting a bull base and bear case scenario mainly because there are many uncertainties in the stock market and the economy at Large, there are three main revenue: drivers for tesla, automobile deliveries, energy and potentially insurance note that there are other sources of revenue for tesla, such as regulatory credits and trading cryptocurrencies. On a side note, there's been a lot of misinformation surrounding regulatory credits where some are saying that tesla's profit comes from the government.

The majority of regulatory credit revenue does not come from the government. It comes from other automakers that pay tesla in order to help them meet carbon emission requirements. Nevertheless, i left regulatory credits out of the following calculations, because those are one-time payments that will likely decrease in the future. This spreadsheet shows the full case scenario for tesla, where tesla hits its goal to deliver 1 million vehicles in 2021, which has leaked in a meeting with tesla's workers.

After that, a projected vehicle delivery growth of 60 in 2022, 50 from 2023 to 2025 and 35 percent growth in 2026.. The first catalyst for these deliveries include giga shanghai's production ramp up the opening of giga berlin and giga texas, along with the ramp up of the cyber truck semi and roadster. Following that, potential catalysts include the opening of giga india, a 25 000 tesla and further ramp up with all vehicles in tesla's lineup. Next i projected tesla's average selling price per vehicle over the years, which decreased as cheaper vehicles like the 25 000 tesla were unveiled using.

These two numbers i calculated tesla's total vehicle revenue over the coming years. Then i projected tesla's insurance and energy revenue with insurance, only accounting for three point: four percent of vehicle revenue and energy at six point: five percent of vehicle revenue. Finally, i projected tesla's gross in profit margin to account for tesla increasing the price of fsd as it develops in the economies of scale. Ultimately, i chose a gross margin of 41 and a profit margin of 19.

To put this into context, ford recently reported a profit margin of 9 in march of 2021, and ford spends billions on advertising does not have autopilot, which is a high margin service and also pays massive fees to dealerships. Using all of these numbers, i calculated tesla's total revenue and projected an estimate for tesla's price, their earnings and price-to-sales ratio going forward. I used the price-to-earnings ratio of 35 by 2026 and a price-to-sales ratio of 10. with these two numbers in handy i calculated tesla's valuation based on these ratios for the 2026 valuations.

I estimated tesla's valuation to be at two thousand two hundred fifteen dollars and fourteen cents based on earnings and three thousand three hundred thirty one dollars and four cents based on sales. Subsequently, i took the average of these two valuations to obtain an estimated 2026 valuation for tesla stock of 2, 773 dollars and nine cents in the bull case from tesla's current stock price. This implies over 31 growth in tesla stock every year in the next 5.5 years. In the base case, i used more conservative numbers such as 950 000 deliveries for 2021 and delivery, slowing all the way down to 35 year-over-year growth in 2026.

Despite the release of the 25 000 tesla, the next two rows represent roughly the same calculations and the row under that represents tesla's insurance revenue, which i estimated to be 2.5 percent of tesla's vehicle revenue afterward. I assume that tesla's energy department would slow down to 18 year-over-year growth from 60 year-over-year growth in 2021.. When it comes to earnings, i used a 2026 gross margin of 36 and a profit margin of 18 using the revenue numbers from before. I calculated the total revenue and then used a 2026 pde ratio of 30 and a p-to-s ratio of 8 for the last valuation portion, using the same method as before.

I ended with the valuation for tesla stock of 1491.70, which is an average growth rate of over 17 year-over-year and tesla stock price over the next 5.5 years. In the bear case, i used much more conservative growth numbers for vehicle deliveries, which mainly ranged from 25 to 30 growth rates. Next, i projected a higher average selling price per vehicle due to a slower release of the 25 000 tesla and the potential for less full self-driving growth. In the bear case.

After that, i estimated tesla's insurance revenue in 2026 at 2.5 percent of vehicle revenue. Then i assumed that tesla's energy department would have its growth slow down from 40 percent to 15 percent per year. Lastly, i projected a gross margin of 33 percent and a profit margin of 15 for tesla in 2026.. Finally, using a pde ratio of 30 by 2026 in a pds ratio of 7, i calculated an estimated valuation for tesla stock of 890 and 55 cents by 2026..

If this spare case occurs as projected tesla's stock price would still grow 7.33 year-over-year in the next five years, which is honestly not too bad, especially in the bear case. However, we're still not done yet, as in the final valuation model, i estimated that there was a 25 percent of the bowl case happening a 50 chance of the base case happening and the 25 chance of the bear case happening using these numbers. I calculated an estimated stock price for tesla stock of 1 61.76 cents by 2026.. At this valuation, the compounded annual growth rate for tesla stock price would be over 20 year-over-year, which is pretty incredible overall.

I believe i used quite reasonable numbers, as they did not even include the potential for tesla's ride-sharing network restaurants, which, by the way, can be explained in the top right corner in a-trac and all the other sectors that tesla can enter like licensing out battery technology. On a side note, i believe it's quite ridiculous, that some claim that tesla's regulatory credits make up the majority of tesla's earnings when regulatory credits only represented five percent of tesla's total revenue in 2020. Not only that, but tesla cannot obtain regulatory credits without manufacturing vehicles. So it's not some kind of free revenue source.

Clearly tesla's primary business is its vehicle business right now, but i also stand back to the potential for accelerating growth in the energy sector. In conclusion, despite all the fear, uncertainty and doubt surrounding tesla, it seems like tesla stock is actually valued relatively low at the moment, given the upcoming growth rates for tesla, this growth ahead is extremely clear, as tesla is only continuing to develop its full self-driving platform, expand Its gigafactory network ramp up the production of existing vehicles and release and manufacture a 25 000 tesla. Let me know what you think about my valuation model down below by the way the spreadsheet i showed in this video is available for all patreons. If you're interested in seeing my valuation spreadsheets my brand new 25 000 portfolio, which i have a goal of growing to 100 000, my main portfolio buy and sell alerts and more check out my patreon in the first link down below.

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