A Tesla’s store in Netherlands. Source: Flickr.
This article projects Tesla’s stock price from 2023 to 2024 based on investors sentiment in the latest 6 months which range from Sept 2022 to March 2023.
The stock price sentiment that we are using here refers to the price-to-revenue ratio, price-to-gross profit ratio, and price-to-operating income.
These ratios can be obtained by using the Tesla Stock Valuation Spreadsheet.
Coupled with these ratios, we will use the 2023 revenue, gross profit, and operating income estimates to project Tesla’s stock price.
Let’s get started!
Tesla Projected Stock Price Topics
1. How The Estimates Are Done
2. Vehicle Average Selling Price (ASP)
Revenue And Gross Profit By Segment Estimate
3. Automotive Sales Segment
4. Automotive Leasing Segment
5. Regulatory Credits Revenue
6. Energy And Storage Segment
7. Services Segment
Total Revenue And Gross Profit Estimate
8. Projected Revenue For 2023
9. Projected Gross Profit For 2023
10. Projected Operating Profit For 2023
Stock Price Estimate Based On Sentiment
11. Projected Stock Price Based On Revenue
12. Projected Stock Price Based On Gross Profit
13. Projected Stock Price Based On Operating Profit
Summary
14. Conclusion
How The Estimates Are Done
As Tesla is still pretty much an auto manufacturer, its vehicle delivery figure is the primary driver of its stock price.
Therefore, we will first figure out Tesla’s vehicle deliveries in 2023.
With car sales numbers available, we proceed to estimate the automotive sales revenue.
Next, we figure out the revenues for other business segments, including the leasing unit, regulatory credits, energy, and services.
Once we get the revenue by segment, we can estimate the gross profit by segment.
The total revenue and gross profit can be obtained by summing up the components.
Next, we estimate the operating expenses and obtain the operating profit.
With the projected total revenue, gross profit, and operating income available, we can estimate the stock price based on the price-to-revenue, price-to-gross profit, and price-to-operating profit ratios.
In short, the following is a summary of steps that detail the projection of Tesla’s stock price.
1. Vehicle delivery numbers
2. Revenue by segment
3. Gross profit by segment
4. Operating profit
5. Stock price based on investors’ sentiment
Let’s move on!
Vehicle Average Selling Price (ASP)
Tesla’s Vehicle Average Selling Price (ASP)
| Actual Results ($ Millions) | |||
|---|---|---|---|
| 2022 Actual | 2021 Actual | 2020 Actual | |
| Automotive Sales Revenue Excluding Regulatory Credits | $67,210 | $44,125 | $24,604 |
| Vehicle Deliveries NOT Subject To Leasing | 1,266,269 | 875,310 | 465,177 |
| Vehicle Average Selling Price ($ USD) | $53,077 | $50,411 | $52,892 |
Tesla’s vehicle average selling price can be obtained by having the automotive sales excluding regulatory credits and the vehicle delivery numbers not subject to leasing.
The table above shows that Tesla’s vehicle ASP in 2022 grew significantly higher over 2021.
However, in early 2023, Tesla also announced that it is cutting the price of its vehicles in China to increase demand.
Therefore, Tesla’s vehicle ASP may fall slightly in 2023.
To get an estimate of Tesla’s ASP for 2023, I am taking the average of the TTM figures reported in the last 4 quarters.
Therefore, Tesla’s estimated vehicle ASP number is about $52,080 on average.
Automotive Sales Segment
Tesla’s Automotive Sales Revenue And Gross Profit
| Estimate And Actual Results ($ Millions) | |||
|---|---|---|---|
| 2023 Estimate | 2022 Actual | 2021 Actual | |
| Vehicle Deliveries Not Subject To Leasing | 1,729,028 | 1,266,269 | 875,310 |
| Vehicle Average Selling Price ($ USD) | $52,080 | $53,077 | $50,411 |
| Automotive Sales Revenue | $90,048 | $67,210 | $44,125 |
| Automotive Sales Gross Margin | 26.6% | 25.5% | 25.7% |
| Automotive Sales Gross Profit | $23,953 | $17,611 | $11,710 |
Tesla’s automotive sales revenue is estimated to come in at $90 billion in 2023 based on an estimated ASP calculated earlier and roughly 1.7 million vehicle deliveries not subject to leasing.
The gross margin averaged around 26.6% for the last 4 quarters on a TTM basis.
Therefore, the respective automotive sales gross profit is $24 billion in the same fiscal year.
Automotive Leasing Segment
Tesla’s Automotive Leasing Revenue And Gross Profit
| Estimate And Actual Results ($ Millions) | |||
|---|---|---|---|
| 2023 Estimate | 2022 Actual | 2021 Actual | |
| Automotive Leasing Revenue | $3,484 | $2,476 | $1,642 |
| Automotive Leasing Growth Rates | 40.7% | 50.8% | 56.1% |
| Automotive Leasing Gross Margin | 38.5% | 39.1% | 40.4% |
| Automotive Sales Gross Profit | $1,341 | $967 | $664 |
As automotive leasing is part of Tesla’s key segment, the assumption here is that this revenue segment will most likely grow aggressively in the future.
Therefore, the expected growth rate is estimated to come at 40.7% based on the TTM result since 2020.
With the 40% growth rate, Tesla’s automotive leasing revenue will come to $3.5 billion in 2023.
Tesla’s automotive leasing gross margin has been on a decline but only minimally as seen in the table above and may come to 38.5% in 2023 based on the TTM result in the last 4 quarters.
Therefore, the calculated automotive leasing gross profit is $1.3 billion for fiscal 2023.
Regulatory Credits Revenue
Tesla’s Regulatory Credits Revenue
| Estimate And Actual Results ($ Millions) | |||
|---|---|---|---|
| 2023 Estimate | 2022 Actual | 2021 Actual | |
| Regulatory Credits Revenue | $1,847 | $1,776 | $1,465 |
| Regulatory Credits Revenue Growth Rates | 4.0% | 21.2% | -7.3% |
Tesla’s regulatory credits revenue growth has significantly slowed in recent years compared to the earlier years.
I estimated that this revenue segment will only grow by about 4% in 2023 based on the average growth rates recorded in the last 4 quarters on a TTM basis.
Therefore, Tesla’s regulatory credits revenue may only come to about $1.8 billion in 2023.
There is no cost of sales associated with the regulatory credit revenue and therefore, the gross profit does not apply here.
Energy And Storage Segment
Tesla’s Energy Revenue And Gross Profit
| Estimate And Actual Results ($ Millions) | |||
|---|---|---|---|
| 2023 Estimate | 2022 Actual | 2021 Actual | |
| Energy Revenue | $4,886 | $3,909 | $2,789 |
| Energy Revenue Growth Rates | 25.0% | 40.2% | 40.0% |
| Energy Revenue Gross Margin | 1.4% | 7.4% | -4.6% |
| Energy Revenue Gross Profit | $68 | $288 | -$129 |
Similarly, Tesla’s energy segment may not have the same growth rate as that of the automotive sector but will still be considerably higher than the regulatory credits revenue.
Also, Tesla’s energy segment growth has significantly slowed in 2022.
Based on the average TTM growth rates recorded in the last 4 quarters, Tesla’s energy revenue growth rate totaled about 25%.
Therefore, Tesla’s energy and storage revenue is estimated to come to $4.9 billion in 2023.
The respective gross margin is estimated to be only 1.4% in 2023 as this revenue segment has been unprofitable in the last 4 quarters on a TTM basis.
As such, Tesla’s energy gross profit will only generate about $68 million in 2023.
Services Segment
Tesla’s Services Revenue And Gross Profit
| Estimate And Actual Results ($ Millions) | |||
|---|---|---|---|
| 2023 Estimate | 2022 Actual | 2021 Actual | |
| Services And Other Revenue | $7,726 | $6,091 | $3,802 |
| Automotive Revenue | $95,379 | $71,462 | $47,232 |
| Percentage To Automotive Revenue | 8.1% | 8.5% | 8.0% |
| Services And Other Gross Margin | 1.5% | 3.5% | -2.7% |
| Services And Other Gross Profit | $116 | $211 | -$104 |
Tesla’s services and other business segment is probably the least important to the company because it mainly serves as a complement to the automotive segment.
For example, it sells used vehicles, insurance products, accessories, and vehicle parts as depicted in this article – Tesla Services And Other Segment.
Therefore, it relates closely to the automotive segment.
As such, I am using the percentage of service revenue to automotive revenue to project this revenue segment for fiscal 2023.
As shown in the table above, Tesla’s services revenue will hit $7.7 billion in 2023 based on the ratio of 8.1%.
This ratio is calculated based on the average of the ratio in the last 4 quarters on a TTM basis.
Similarly, Tesla’s services segment also has been profitable in 2022 and therefore, the gross margin is estimated to come in at 1.5% for 2023.
At a gross margin of 1.5%, Tesla’s services gross profit will hit $116 million.
Projected Total Revenue For 2023
Tesla’s Projected Revenue For 2023
| Estimate And Actual Results ($ Millions) | |||
|---|---|---|---|
| 2023 Estimate | 2022 Actual | 2021 Actual | |
| Automotive Sales | $90,048 | $67,210 | $44,125 |
| Automotive Leasing | $3,484 | $2,476 | $1,642 |
| Regulatory Credit | $1,847 | $1,776 | $1,465 |
| Energy And Storage | $4,886 | $3,909 | $2,789 |
| Services And Other | $7,726 | $6,091 | $3,802 |
| Total Revenue | $107,990 | $81,462 | $53,823 |
| Total Revenue Growth Rates | 32.6% | 51.4% | 70.7% |
With all revenue components available, we can proceed to estimate the total revenue for 2023.
As shown in the table above, Tesla’s total revenue in 2023 is projected to come in at $108 billion, which represents a growth rate of about 33% over 2022.
The estimated total revenue and the growth rate for 2023 are quite reasonable as Tesla’s revenue growth has been on a decline since 2020.
Projected Gross Profit For 2023
Tesla’s Projected Gross Profit For 2023
| Estimate And Actual Results ($ Millions) | |||
|---|---|---|---|
| 2023 Estimate | 2022 Actual | 2021 Actual | |
| Automotive Sales | $23,953 | $17,611 | $11,710 |
| Automotive Leasing | $1,341 | $967 | $664 |
| Regulatory Credit | $1,847 | $1,776 | $1,465 |
| Energy And Storage | $68 | $288 | -$219 |
| Services And Other | $116 | $211 | -$104 |
| Total Gross Profit | $27,325 | $20,853 | $13,606 |
| Gross Profit Growth Rates | 31.0% | 53.3% | 105.2% |
| Gross Margin | 25.3% | 25.6% | 25.3% |
Tesla’s projected gross profit for 2023 is estimated to come in at $27 billion, a rise of 31% over 2022.
As Tesla’s gross profit growth rates have been on a decline since 2020 as the company is getting larger, the projected figure and the respective growth rate for 2023 look quite reasonable.
Moreover, the respective Tesla’s gross margin of 25.3% for 2023 also was in line with that from prior years, indicating that the projected gross profit for 2023 was reasonably estimated.
Projected Operating Profit For 2023
Tesla’s Projected Operating Profit For 2023
| Estimate And Actual Results ($ Millions) | |||
|---|---|---|---|
| 2023 Estimate | 2022 Actual | 2021 Actual | |
| Gross Profit | $27,325 | $20,853 | $13,606 |
| R&D Expenses | $4,104 | $3,075 | $2,593 |
| SG&A Expenses | $5,184 | $3,946 | $4,517 |
| Total Operating Expenses | $9,287 | $7,021 | $7,110 |
| Operating Income | $18,038 | $13,832 | $6,496 |
| Operating Income Growth Rates | 30.4% | 112.9% | 225.8% |
| Operating Margin | 16.7% | 17.0% | 12.1% |
To estimate Tesla’s operating income, we first need to determine the operating expenses.
While Tesla’s R&D and SGA expenses have been on a rise, the respective ratio to total revenue has been on a decline as depicted in this article – Tesla Operating Costs.
Therefore, I am using the 2022 ratio to estimate Tesla’s R&D and SGA expenses as this ratio was at record lows as of 2022.
The estimated figures show that Tesla’s incurred R&D expense for fiscal 2023 is $4.1 billion while that of SGA expense is $5.2 billion.
The total operating expense for 2023 is expected to be $9.3 billion, roughly 33% higher than the 2022 figure.
As a result, Tesla’s operating income for 2023 is projected to come in at $18 billion, a rise of 30% over 2022.
From the perspective of margin, Tesla’s operating margin total 16.7% for fiscal 2023, which is roughly in line with that of 2022.
In short, Tesla’s operating profit for fiscal 2023 has been reasonably projected as the growth rate, as well as the margin, are not on the extreme end of the parameters.
Projected Stock Price Based On Revenue
Tesla’s Projected Stock Price Based On Total Revenue
| Stock Price Projection For Period Between 2023 And 2024 | |||
|---|---|---|---|
| Upper Range | Average | Lower Range | |
| Projected Total Revenue For 2023 ($ Millions) | $107,990 | ||
| Price To Sales Ratio (6-Month Internal) | 30% Above Average | Average | 30% Below Average |
| 10.4 | 8.0 | 5.6 | |
| Projected Market Cap ($ Millions) | $1,123,101 | $863,924 | $604,747 |
| Shares Outstanding At 2% Annual Growth Rate (In Thousands) | 3,227,385 | ||
| Stock Price ($ USD) | Upper Range | Average | Lower Range |
| $348 | $268 | $187 | |
| Shares Outstanding At 8% Annual Growth Rate (In Thousands) | 3,417,231 | ||
| Stock Price ($ USD) | Upper Range | Average | Lower Range |
| $329 | $253 | $177 | |
The projected revenue for 2023 was calculated earlier based on the discussions above and is expected to come to $108 billion for fiscal 2023.
For the price-to-sales ratio, I am using the Tesla Valuation Spreadsheet to gauge investors’ sentiment for the latest 6 months which range from Sept 2022 to March 2023.
However, you can do 1-year, 2-year, or 5-year to get the average, high, and low PS ratios.
As investors’ sentiment toward Tesla’s stock has been on a decline, the valuation from the perspective of revenue also has been on a decline.
As such, I am using a 30% margin to get an idea of the upper and lower end of the projected stock price.
This 30% margin can work as a safety margin.
Therefore, Tesla’s projected market capitalization based on the 2023 revenue estimate is between $1.1 trillion and $605 billion as shown in the table above.
In terms of share outstanding, I am using 2 scenarios.
The first scenario depicts that Tesla’s share outstanding will grow at 2% in 2023 while the second scenario depicts a larger share outstanding growth of 8%.
In the worst scenario, Tesla’s projected stock price from 2023 to 2024 is between $329 and $177.
As of March 2023, Tesla’s stock price was traded at $184 USD and was close to the lower end of the projection based on revenue, indicating that investors’ sentiment was quite bearish at the moment.
Projected Stock Price Based On Gross Profit
Tesla’s Projected Stock Price Based On Total Gross Profit
| Stock Price Projection For Period Between 2023 And 2024 | |||
|---|---|---|---|
| Upper Range | Average | Lower Range | |
| Projected Total Gross Profit For 2023 ($ Millions) | $27,325 | ||
| Price To Gross Profit Ratio (6-Month Internal) | 30% Above Average | Average | 30% Below Average |
| 39.4 | 30.3 | 21.2 | |
| Projected Market Cap ($ Millions) | $1,076,616 | $827,956 | $579,296 |
| Shares Outstanding At 2% Annual Growth Rate (In Thousands) | 3,227,385 | ||
| Stock Price ($ USD) | Upper Range | Average | Lower Range |
| $334 | $257 | $179 | |
| Shares Outstanding At 8% Annual Growth Rate (In Thousands) | 3,417,231 | ||
| Stock Price ($ USD) | Upper Range | Average | Lower Range |
| $315 | $242 | $170 | |
The projected gross profit for 2023 was calculated earlier based on the discussions above and is expected to come to $27 billion for fiscal 2023.
For the price-to-gross profit ratio, I am using the Tesla Valuation Spreadsheet to gauge investors’ sentiment for the latest 6 months which range from Sept 2022 to March 2023.
However, you can do 1-year, 2-year, or 5-year to get the average, high, and low P/Gross Profit ratios.
As investors’ sentiment toward Tesla’s stock has been on a decline, the valuation from the perspective of gross profit also has been on a decline.
As such, I am using a 30% margin to get an idea of the upper and lower end of the projected stock price.
This 30% margin can work as a safety margin.
Therefore, Tesla’s projected market capitalization based on the 2023 gross profit estimate is between $1.1 trillion and $579 billion as shown in the table above.
In terms of share outstanding, I am using 2 scenarios.
One grows at 2% while the other one will grow at a much larger growth rate of 8%.
In the worst scenario, Tesla’s projected stock price from 2023 to 2024 is between $315 and $170.
As of March 2023, Tesla’s stock price was traded at $184 USD and was close to the lower end of the projection based on gross profit, indicating that investors’ sentiment was quite bearish at the moment.
Projected Stock Price Based On Operating Income
Tesla’s Projected Stock Price Based On Total Operating Income
| Stock Price Projection For Period Between 2023 And 2024 | |||
|---|---|---|---|
| Upper Range | Average | Lower Range | |
| Projected Total Operating Income For 2023 ($ Millions) | $18,038 | ||
| Price To Operating Profit Ratio (6-Month Internal) | 30% Above Average | Average | 30% Below Average |
| 63.6 | 48.9 | 34.2 | |
| Projected Market Cap ($ Millions) | $1,147,223 | $882,063 | $616,903 |
| Shares Outstanding At 2% Annual Growth Rate (In Thousands) | 3,227,385 | ||
| Stock Price ($ USD) | Upper Range | Average | Lower Range |
| $355 | $273 | $191 | |
| Shares Outstanding At 8% Annual Growth Rate (In Thousands) | 3,417,231 | ||
| Stock Price ($ USD) | Upper Range | Average | Lower Range |
| $336 | $258 | $181 | |
The projected operating profit for 2023 was calculated earlier based on the discussions above and is expected to come to $18 billion for fiscal 2023.
For the price-to-operating profit ratio, I am using the Tesla Valuation Spreadsheet to gauge investors’ sentiment for the latest 6 months which range from Sept 2022 to March 2023.
However, you can do 1-year, 2-year, or 5-year to get the average, high, and low P/Gross Profit ratios.
As investors’ sentiment toward Tesla’s stock has been on a decline, the valuation from the perspective of operating income also has been on a decline.
As such, I am using a 30% margin to get an idea of the upper and lower end of the projected stock price.
This 30% margin can work as a safety margin.
Therefore, Tesla’s projected market capitalization based on the 2023 operating profit estimate is between $1.1 trillion and $617 billion as shown in the table above.
Again, 2 scenarios are used for Tesla’s share outstanding.
One grows at 2% while the other one will grow at a much larger growth rate of 8%.
In the worst scenario, Tesla’s projected stock price from 2023 to 2024 is between $336 and $181 based on the estimated operating income.
As of March 2023, Tesla’s stock price was traded at $184 USD and was close to the lower end of the projection based on operating profit, indicating that investors’ sentiment was quite bearish at the moment.
Conclusion
Tesla’s Projected Stock Price For The Period From 2023 And 2024
| Stock Price Projection For Period Between 2023 And 2024 | |||
|---|---|---|---|
| Upper Range | Average | Lower Range | |
| By Revenue | $329 | $253 | $177 |
| By Gross Profit | $315 | $242 | $170 |
| By Operating Income | $336 | $258 | $181 |
As shown in the table above, Tesla’s projected stock price can range from the highest at $336 to the lowest at $170.
For your information, Tesla’s stock price was traded at $184 when this article was published, which means the stock was roughly 80% below this price.
Also, at the current stock price, Tesla’s stock valuation was at the lower end of the projection, illustrating the bearish sentiment of investors at this moment.
While the projection of Tesla’s stock price is based on all the latest figures, the results here are to be reviewed and revised from time to time, preferably on a quarterly basis when Tesla releases its quarterly results in 2023.
Moreover, investors’ sentiments can change considerably within just a few months.
Therefore, all the ratios used in this article need to be updated frequently to reflect the latest sentiment.
Lastly, you can get all the ratios that reflect investors’ sentiments through the Tesla Valuation Spreadsheet.
References and Credits
1. All financial figures in this article were obtained and referenced from Tesla’s quarterly and annual filings which are available in Tesla Investor Relations.
2. Featured images in this article are used under the creative commons license and sourced from the following websites: Thomas Hawk and jbdodane.
Disclosure
The content in this article is for informational purposes only and is neither a recommendation nor a piece of financial advice to purchase a stock.
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