Hi YXI friends,

As TSLA is a community favourite, I will keep today’s note entirely free. Please read to the end - Section 4 is packed full of actionable quantitative insights.

The YXI Profile aims to provide a complete overview of the asset's historical fundamentals, forward estimates, and quantitative characteristics. It should be very clear and straightforward to follow.

This note may be particularly relevant to long-term investors who want to look past the daily noise and news headlines and understand how their assets behave over the long term.

All of the charts in this note were developed using proprietary analytical tools to provide a unique set of insights for YXI Premium subscribers.

We update this note every quarter, one business day after the earnings report. The goal is to create a long-term rolling report on the asset so you can easily look back on what happened before.

You can find the rest of the Mag-7 profiles here

DISCLAIMER: This newsletter is strictly educational. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.

TSLA’s latest quarter has negated the prior growth declines, with revenue up 12% YoY.

Q3 was the first quarter of double-digit growth in over two years. In 2020-2023, TSLA was a growth juggernaut, posting quarterly growth rates of 40-80%, even though its share price failed to escape the 2022 bear market.

TSLA’s trailing-twelve-month revenue is still around flat, due to the negative quarters of Q1 and Q2.

TSLA’s gross margin has been very steady around 16-18%. Long-term, Musk wants to bring this up to 25%+.

The free cash flow margin has improved substantially in the past quarter, with 6 straight quarters of positive FCFs.

TSLA’s EBITDA (earnings before interest, tax, depreciation, and amortisation) and EPS have declined in the past year.

TSLA’s CapEx has been reasonably consistent over the past two years (high single digits to low teens).

Since Q2 2020, TSLA has generated positive free cash flow in all but one quarter (Q1 2024), though it is not aggressively growing either.

TSLA sits with comfortably high cash levels, meaning balance sheet resources are not a source of its capacity constraint for the Robotaxi or Optimus production.

Here are the key financial metrics from the past four quarters. I have designed the table this way so we only focus on the key top-line, profit, and cash flow metrics.

Here are Wall Street's forward estimates. Wall Street sees a flat Q4, after the EV tax credit rush last quarter, with a potentially significant bump in Q1.

However, overall, WS expects only a high single-digit increase in revenue next year. This means it is not meaningfully accounting for potential Robotaxi revenue in 2026. This will be a key catalyst for future price movements.

Here are the summary valuation metrics over time, including the NTM metrics (using today’s share price).

Compared with Q4 2024, TSLA’s top-line valuation - EV/ Sales has appreciated from 12.9x to 15.4x, but is cheaper on a growth-adjusted basis (EV/ Sales / Growth from 13.6x to 9.9x today).

From a PE perspective, TSLA has grown from 191x in January to 311x today, an appreciation of 62%.

This valuation metric lends a lot of fuel to the bears, who cannot wrap their head around TSLA’s valuation (or PLTR’s) ever. Some have even accused TSLA of being a cult stock.

TSLA’s valuation is based on the TAM of the Robotaxi and Robot Humanoid industries and its leading position in them. This makes the existing financial metrics less relevant for interpreting the market moves.

Compared against its own history, TSLA currently trades over 2 standard deviations from its 3-year median, across all valuation metrics.

There is a reason to be careful here: the higher these multiples go, the more sensitive the stock becomes to negative catalysts (e.g., further delays in the Robotaxi network or factory production issues).

TSLA likes the year-end run-ups around November and December, but doesn’t do very well in the spring.

TSLA’s YTD performance of 16% is similar to SPY, but with much greater volatility. 2025 is a middle-of-the-pack year against the past decade.

Investors can get very frustrated owning TSLA because it spends very long periods in deep drawdowns (20%-60%), while the upward moves occur very rapidly.

TSLA trades with a positive correlation with SPY but a neutral correlation with TLT over the past 90 days.

December is a relatively quiet month for TSLA. In contrast, March, April, and November are volatile periods.

This is a chart of TSLA’s 5-minute interval average returns in the past 20 days. In this period, investors aggressively bid up TSLA at the market open.

Our follow-through analysis suggests the best time to buy TSLA is when it falls by more than 10% in a single day. TSLA typically rises by 17% after 1 month and 44% after 3 months. Watch out for these.

Buying TSLA after the RSI reaches 70 is much less lucrative over the subsequent 3 months.

Here are the days when TSLA moved by more than 10% in a single day.

Here are the days when TSLA declined by more than 10% on a single day.

Here are the times when TSLA hits RSI > 70 (red dots) or <30 (green dots).