Tesla Stock: Why I Remain A Buyer (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Tesla, Inc.'s automotive sales are resilient vs. amidst a challenging backdrop in the industry. The rollout of affordable models in H1 FY25 are a key volumes catalyst.
• Margin performance is at local highs but is likely to revert a bit, driven by fluctuations in the nature of energy business projects and lower average selling price pressures.
• Valuations are at a premium, driven by full self-drive and Optimus expectations. I believe this is acceptable, contingent on the timelines of robotaxis and FSD rollout being intact in FY25.
• The relative technicals vs. the S&P 500 point bullish after a false breakout down. The ratio prices are basing and forming a support, indicating readiness to move up over the coming months ahead.
• Prepaid expenses have been creeping up over the past few quarters, eroding cash flow conversion. This is something I am monitoring; a common oversight is for investors to focus on margin movements but ignore erosion in working capital intensity.

Read the full article here.