Tesla's moat score of 64 and management score of 76 point to a business with a defensible position and capital discipline, reflected in low leverage at 0.1x debt to equity. Set against that is a return on invested capital of just 3.0% and a gross margin of 18.0%, figures that describe a company converting less of its advantage into current profitability than the moat and management scores alone would suggest.
The share price of $332.81 sits far above every valuation anchor in the model: $16.20 on a margin of safety basis, $27.23 on a 10-cap basis, and $42.98 on a payback basis, which is also the consensus buy price. That gap is captured in the margin of safety score of 5. At a price to earnings ratio of 308.2x and a free cash flow yield of 0.4%, the price is asking for a great deal of future performance to be delivered, even though the model already uses a 15.0% growth assumption that is capped below the 25.0% growth actually measured from Tesla's history, a deliberately conservative choice built into these numbers.
The tension is between a business with real underlying quality, as the moat and management scores show, and a price that leaves almost no room for anything to go wrong relative to that already conservative growth assumption.
| Price | $364.27 |
| Market cap | $1.4T |
| P/E ratio | 337.3x |
| Return on invested capital | 3.0% |
| Gross margin | 18.0% |
| Debt to equity | 0.10x |
| Free cash flow yield | 0.4% |
| Growth rate used | 15.0% |
| Growth rate measured | 25.0% |
| Exit multiple assumed | 30.0x |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Tesla Inc. rather than accepting ours.