Tesla Motors Inc (TSLA): Goldman Sachs Group, Inc. (GS) Valuation of a Super Ball Stock

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A few comments:

The projection goes three years out (that wasn’t stated, but easy to figure out).

    “Next Gen” apparently refers to the Model X, a cross-over vehicle, slated to launch about late 2014.

      I’d assume the nearly 50-50% mix between Model S and Model X sales in the pessimistic scenario holds true for the two other scenarios, too.
      The operating margins were derived using Tesla Motors Inc (NASDAQ:TSLA)’s guidance (15%). For context: Volkswagen’s Audi unit and BMW had margins of 11.0% and 10.8%, respectively, in 2012. Remember, Tesla has a direct sales model, so there’s no dealer cut.

          The optimistic scenario could prove understated because it doesn’t include revenue for anything other than producing vehicles. A few what-ifs:

          What if Tesla’s work supplying SolarCity with batteries for solar energy storage proves successful, and results in more solar revenue in the future?

          (In June, SolarCity announced it would begin testing Tesla Motors Inc (NASDAQ:TSLA)-supplied 8-kilowatt lithium-ion battery packs at 100 sites, with a goal of rolling out battery-storage solutions for its solar-power generating rooftop systems in 2015. The power generated by solar panels during daylight would be stored in the battery packs at night, eliminating dependence on utilities’ net metering programs. CEO Lyndon Rive — Tesla CEO Elon Musk’s cousin — said declining battery prices will mean his systems can include storage and still beat utility rates for consumers in California and Hawaii, according to an LA Times article. If this proves so, it should be a big boon to SolarCity.)
          (SolarCity, in turn, has been providing solar-powered canopies for Tesla’s Supercharger stations. Musk is hoping to increasingly leverage the synergy between the two businesses.)
          What if Tesla expands its production of electric drive train components for other automakers? (It recently wrapped up supplying components for Toyota’s RAV4 EV and is now working on a powertrain for Daimler’s Mercedes-Benz B-Class Electric Drive.)

            Takeaway

            Investors and potential investors in any stock should keep in mind the market tends to over-react to both good and bad news. Additionally, it often reacts to “non-news” — that which is not relevant to a company’s business performance, as was the case here.

            Goldman Sachs Group, Inc. (NYSE:GS)’s three-scenario picture can be a handy tool for gauging valuation. Bulls and bears alike might want to use it as they take in Tesla Motors Inc (NASDAQ:TSLA)’s quarterly earnings going forward. (Tesla’s second quarter earnings are scheduled to be released on August 7.)

            The article Tesla: Goldman’s Valuation of a Super Ball Stock originally appeared on Fool.com and is written by BA McKenna.

            BA McKenna has no position in any stocks mentioned. The Motley Fool recommends Tesla Motors Inc (NASDAQ:TSLA). The Motley Fool owns shares of Tesla Motors Inc (NASDAQ:TSLA). BA is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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