Solving The Money Problem

$TSLA would likely get greater investor focus on FSD and AI in general by breaking out AI revs and profits as a fourth segment, in addition to Autos, Energy, and Services. Today, we estimate FSD is only $1B revs (out of $100B total revs) so likely not significant enough. But a segment that includes FSD, FSD licensing, robotaxi, Optimus, and Dojo would get a high P/E and could be measured and tracked by investors, which would be additive to TSLA’s valuation. @MartinViecha

What ails $TSLA? It’s increasingly difficult to justify a 55-60x P/E on a company with single-digit YoY sales growth until next gen 25K vehicle delivs start in 2026.

Let’s be real. $TSLA now trading at 44x forward eps - it’s lowest P/E since the 2023 1H lows (median 58x). We (and others) have been talking about 1Q WS deliv ests being too high for two weeks now so buy side consensus could already be discounting a 425-440K 1Q result. The San Jose trial next week could cause some uncertainty but in the end we believe this jury will side with TSLA’s view that TSLA has warned drivers using autopilot to stay fully engaged and be ready to take control at any time. We are encouraged that TSLA is now experimenting with digital advertising to convince ICE owners to go EV by emphasizing overall lower cost and charging convenience. Finally, we like that TSLA mgmt has so far resisted the urge to cut price going into quarter end which shows some much needed discipline.