Our research shows that Tesla, Inc. is a SELL based on a target price of US$139, implying a downside of 31%. We derive our target price from a DCF-based valuation.
Read MoreWhat is Weighted Average Cost of Capital (WACC)?
The WACC is the average cost of raising capital from all sources, including equity, common shares, preferred shares, and debt. It represents the required return firms should earn to satisfy their investors.
Read MoreWhat Is Present Value?
The present value is the current value of future cash flows at a specific rate of return. The present value indicates that an amount of money today has a higher value than that same amount in the future.
Read MoreWhat Is Cost of Equity?
To compensate for the risks that shareholders take, firms pay them in return. The theoretical return the firm pays its shareholders is known as the cost of equity. In other words, the cost of equity is the rate of returns a firm pays to its shareholders.
Read MoreWhat Is Inflation?
Inflation is when the prices of goods and services increase over time. While the prices of goods and services increase, the purchasing power or value of money decreases.
Read MoreWhat Is Future Value?
Future value is the value of a current asset at a specific time in the future calculated based on an assumed growth rate.
Read MoreWhat is the Capital Asset Pricing Model (CAPM)?
CAPM is a measure used by investors to evaluate the expected return on investments. It allows investors to diversify their investments to achieve the desired return based on the risk of each investment.
Read MoreWhat Is Time Value of Money?
Time value of money describes how the sum of money that you hold currently is worth more than the equivalent sum in the future.
Read MoreWhat Is Equity Risk Premium?
Equity-risk premium is the difference between expected returns from the stock market and the expected returns from risk-free investments.
Read MoreWhat Is Risk-Free Rate?
The risk-free rate is the ‘theoretical’ minimum rate of return on investments with no risk.
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