Rivian doesn’t need to be the next Tesla. From what I saw on the Rivian subredddit it has many diehard fans. 70% of American car market is SUV’s and trucks. Rivian can be very successful without being the next Tesla.
Even Tesla in the future is not guaranteed to be as dominant as it is today. It doesn’t sound likely to me that everybody will drive the same brand of cars.
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Archive link: https://archive.md/3ikZU
Rivian Automotive Inc. is another company that could soon benefit from Wall Street’s infatuation with electric vehicles. The Irvine-based manufacturer, which is preparing for an initial public offering, would have a market capitalization of $63 billion if its shares price at the top of its forecasted range. That would place the company among the top 15 most valuable car makers.
The electric truck maker, which has a software development and engineering office in Palo Alto, is expected to raise about $9.9 billion in its IPO. That would surpass the amount raised by Uber Technologies in its 2019 offering and would be the biggest IPO since Alibaba raised $25 billion in 2014.
How tall is Mike?
I actually read the whole thing. You can play with the spreadsheet inside to get to your own fundamental value of Tesla. He’s the first to admit that he has been wrong on Tesla for the last 10 years, but I found this line compelling:
That said, I believe that Tesla is a “trade”, not an “investment”, and that perspective provides answers to four questions that you may have about the stock.
Reason being that small trivial news moved the stock a lot on either side. Those moves can’t be explained by fundamental analysis. So the conclusion may be that fundamental analysis is just hopeless with a “trade” stock driven by personality, stories and momentum. Anyway, I appreciate his integrity not to cover up or make excuses, but to go back and look for mistakes he made in his past analyses.
It means don’t trust any valuations by Finance experts, GIGO.
I don’t think it’s a matter of trust. Everybody needs their own metric to evaluate an investment. It can be fundamental-driven like the professor’s. It can be TA-driven like yours. It can be story and founder driven like VC’s. Or a mix of different approaches.
Which lane one picks depends on personality. No need to trust anybody. Just eat your vegetables and do your own homework. But it doesn’t hurt to be exposed to different approaches.
Fundamental valuations are needed.
Problem is the assumptions going into many of such models end up being wrong.
Problem #1: He assumes a slower growth rate than what Tesla is currently aiming for
Problem #2: He assumes margins will go down, and that software revenue won’t contribute signficantly.
Problem #3: He assumes little contribution outside to profit outside of cars.
I think all 3 assumptions are wrong.
Actually, a 650 billion valutation from Damodaran is bullish.
Did you play with his spreadsheet? What’s your own valuation?
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Exactly what I have said. GIGO. A monkey can do just as well.
Edmund’s review.
Could well surge to over 100B tomorrow.
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