I happened to talk about Tesla, Inc. when I asked a friend out for dinner at the beginning of this year. Ta told me that a very important partner in their fund was optimistic about the company and kept buying. His internal point of view is:Now if you spend the money you bought on Tesla, Inc. to buy Tesla, Inc. stock, you will soon earn the second or even the third Tesla, Inc..

In the afternoon after talking to Ta, I reorganized some of my previous collection of data and opinions, looked at some conventional and unconventional analytical ideas on the market, and chose to increase my position on the second trading day, which was $400 +.

I'm sure no one could have imagined that only half a year later, Tesla, Inc. would become the world's largest car company by market capitalization, and its share price would break through the four digits to $1000 so quickly.

Time goes back a little bit. In 2018 and 2019, Tesla, Inc. and his founder Musk repeatedly made headlines in science and technology news, when it was mired in negative news:

1) the behavior of the founder leads to revulsion.Musk appeared on one of Joe Logan's popular podcasts, drinking whiskey, talking about the future of electric planes and smoking marijuana. Although this is legal in California, it is considered by the public to be anachronistic, so it has drawn bad reviews.

2) there were two major personnel earthquakes in the company.Dave Morton, its chief accounting officer, resigned just a month after joining the job. It is said that he chose to leave because "the public paid too much attention to the company"; soon after, Gabriel Toledano, the head of human resources, was also reported not to return to the company, after he had asked for leave for a long time.

3) failed to achieve the target of mass production.At that time, there were news reports that Tesla, Inc. 's production was in a bottleneck and it was almost impossible to achieve the promised production target of 6000 Model 3 cars a week.

4) faced with intensified competition, it was downgraded by Goldman Sachs Group.Goldman Sachs Group analysts have released a public report that Tesla, Inc. 's share price will fall 30% within six months, mainly because it is difficult to resist competitors (mainly Mercedes-Benz). And in the month when Mercedes-Benz's first all-electric model, the Mercedes-Benz EQC, was delivered to a small number of VIP customers in the European market, Tesla, Inc. 's share price did fall by 20% +

5) the founder's remarks caused controversy.His baseless accusations against British cave divers in the Thai cave rescue case and tweets about the possible $420 privatisation of Tesla, Inc. have been repeatedly questioned and even triggered an investigation by the US Securities Regulatory Commission.

In that darkest period of timeCash is running out, production capacity is insufficient, competition in the industry is fierce, founders and management are unstableAll these problems that may occur in a company on the verge of bankruptcy show up in Tesla, Inc..

But it survived and has come to this day.

In retrospect, Tesla, Inc. 's market capitalization has changed miraculously over the past five years: first it was lukewarm for three consecutive years, and then suddenly quadrupled in the fourth year, which is a miracle for a company with a mass of tens of billions.

So this aroused my curiosity:How to explain Tesla, Inc. 's skyrocketing market value? What exactly is reflected behind the change? Is it overrated now? A bolder assumption is whether this can be quantified.

In addition, personally, I still have some holdings that have not been sold. Rather than realise value now, I would like to witness history. (this view may change within a month. If it does, I will update it in time.)

First, throw out the core point of this article:For Tesla, Inc., its value has at least three layers: basic value, value at risk and emotional value. Among them, the basic value is determined by the discount of the company's future income, the value at risk (mainly) is determined by the delivery capacity and demand level (especially in the Chinese market), and the emotional value (mainly) is determined by Musk alone.

Basic value-discounted future cash flow

In the short term, the market is a voting machine; in the long run, it is a weighing machine. This is a famous saying inherited from Graham. If we want to confirm the basic value of Tesla, Inc., it is more appropriate to apply the mainstream valuation analysis method.

Generally speaking, for Internet companies, there are two common valuation ideas: absolute valuation and relative valuation. The former includes discounted cash flow (DCF) and dividend discounted model (DDM), while the latter includes P / E ratio, P / B ratio, P / S ratio, P/GMV and so on.

Unfortunately, as for Tesla, Inc., there is no better similar company to assist in valuation, so we can consider the method of absolute valuation. Specifically, the discounted cash flow method is relatively reliable.

There is no specific modeling to measure the current basic value of Tesla, Inc. 's fairness. But combined with Tesla, Inc. 's actual stock price and its financial indicators for the fourth quarter of 2016-2019, we can make an interesting observation.

It can be seen that at the end of these four quarters, Tesla, Inc. 's share price was $200,311,316,418 respectively.However, this trend is obviously not closely related to the changes in various financial indicators.

For example, revenue growth slowed in the fourth quarter of 2019, earnings per share fell compared with the same period last year, but the stock price rose well. Therefore, it is not credible to use fundamentals to explain Tesla, Inc. 's surge at the end of 2019.

Of course, Tesla, Inc. 's rising share price is not entirely a castle in the air. Quite a number of research reports by investment banks and other institutions show thatUsing the discounted cash flow method, the fair valuation for the fourth quarter of 2019 would be about $350.

Tesla, Inc. 's share price was about 36 per cent overvalued in the fourth quarter of 2019, compared with the real price of $478.

The following figure shows more clearly, black is the real stock price change, blue is the basic value change:

It can be found that Tesla, Inc. 's share price has been overvalued since the fourth quarter of 2019. But it has not been corrected by the market for such a long time, it can be seen that there are other reasons that affect the real stock price, we then analyze the second layer-value at risk.

Value at risk-delivery capacity and market demand level

For Tesla, Inc., a big driving force behind the rise in share prices since the second half of 2019 has been the expectation that China's superfactory (Gigafactory) is about to deliver. In other words, the market takes into account not only the current real financial situation, but also the revenue that will be generated in the future.

With this catalyst, Tesla, Inc. 's value should not rigidly adhere to the future cash flow discount itself, but should also pay attention to the impact of new variables.

If we intercept several key information nodes, we can find out once again how Tesla, Inc. 's stock price has changed after adding value at risk:

In the above picture, black is the real stock price change, while red is based on the basic value, taking into account the positive impact of specific time nodes on Tesla, Inc. 's future delivery capacity, so as to get a new correlation.

This time, basic value and value at risk are taken into account at the same time, Tesla, Inc. 's stock price fluctuation is easier to explain. As you can see, this picture is much more reliable than the first one that only considers the discounting of cash flow.

And we'll see at this time.The fair value in the fourth quarter of 2019 has reached $360, a difference of $18 from the real share price of $478, which means the stock is about 4% overvalued.

But that's not enough. is there any reason behind the 4%? We went on to the third floor.

Emotional value-the market's likes and dislikes of Musk have nothing to do with fundamentals

Generally speaking, corporate premium / discount is not only reflected in its fundamentals and future revenue expectations, but also has a strong relationship with its attention and liquidity.

Take the simplest example. Affected by the epidemic some time ago, online office and remote video tools exploded, so Zoom became a big winner. Zoom Technologies Inc, which bears a striking resemblance to its name, has nothing to do with the business (the latter makes mobile phone accessories), but it has also been sought after by the market because of the surge in attention, with its share price rising from less than a cent to nearly $6.

The attention and "flow dividend" brought about by the same name can be classified as "emotional value", even if the company's fundamentals have not changed, but as long as it is seen by the market, it can be given new value (although this is often short-lived and easily faded).

As mentioned earlier, for Tesla, Inc., although basic value and value at risk are taken into account, there are still some gap between value and price that are difficult to explain, such as the $18 overvalued in the fourth quarter of 2019. In fact,This is largely due to the positive sentiment of the public and capital markets towards Musk at this stage.

Like, pay attention to Musk, so Tesla, Inc. 's activity began to rise, the resulting premium and positive strength can not be underestimated.

So to sum up, if you take the stock price of $478 in the fourth quarter of 2019 as the object of analysis, it includes at least three values-$350 basic value + $110 value at risk + $18 emotional value.

The inspiration from this perspective is that the first two will not change in the short term, or at least not much. But the emotional value is not necessarily.

Not long ago, the private space company Space X was in the limelight, and Musk, as the helmsman, naturally enjoyed the glory. But is it possible that public sentiment towards Musk will plummet in the future? Or is the stock price soaring as a result of rising confidence? It's all possible. Enough attention needs to be paid to this.

Finally, I expand some of my subjective views on Musk and Tesla, Inc..In fact, there are two points that most people may not understand:

First, from 1920s to the emergence of Tesla, Inc., there was no local cutting-edge car company that survived in the United States. Tesla, Inc. went public successfully in 2010, more than 50 years after the last listing of a local American car company.

That is, Tesla, Inc. is a precious only child.

Second, when the car first appeared, gasoline drive and electric drive coexisted. But at that time, both models had a lot of problems, and neither could be mass-produced. Later, Ford made it possible for fuel cars to be mass-produced by pipelining, and with the major improvements in spark plugs in 1912 to improve convenience and safety, fuel cars had an absolute advantage.

So in 1920, electric vehicles completely withdrew from the automobile market, and fuel vehicles dominated the industry until the emergence of Tesla, Inc. in the 21st century.

That is, Tesla, Inc. is an important reformer.

If you are still interested in studying the history of the industry, you will find that the early automobile industry needed to solve a lot of technical and market problems. From 1886 to 1915, thousands of car companies emerged, but most of them are dead today.

Like the early computer, Internet, mobile Internet and consumer goods industries, breakthroughs are possible only when someone is able to ask (and then answer) questions that have never been asked before.

Henry Ford once asked, "how can everyone own a car?" "in the end, his answer is not to produce a better car, but to build a better production system.

Jobs once asked, "how can everyone have a computer?" "in the end, his answer is not to make computers perform faster, but to have a simple operating system that makes the barriers for computers to use lower.

Morita Akio once asked, "how can young people have their own music?" "in the end, his answer is not better sound quality, but a more portable audio player.

Bezos once asked, "how can people shop online?" "in the end, his answer is not to meet all the subdivided needs through many unique websites, but to do a good job in logistics and distribution, so that people can buy smoothly and at ease.

Ask a good question and give the right answer. These are the valuable qualities of industrialists. And the products they finally created were the source of all the economic value later on. Sometimes we need to think.Why did stubborn engineers rather than smart businessmen change the world?

At this point, Musk's behavior can be evaluated, but no one is qualified to judge.