Tesla (Nasdaq: TSLA) is one of those unique “battleground stocks”. People either love it or hate it…and quite passionately!

The financial media is also manic depressive when it comes to coverage. One week, they’re euphoric about how AI and electric vehicles will be trillion-dollar markets and that Tesla is well-primed to accelerate into both of them. The next, they’re pointing out Elon Musk’s recreational drug use, his failures at side projects like Twitter/X, and why quarterly deliveries came in so far short of expectations.

Investors are understandably confused on what they should be paying for Tesla’s stock. Shares have traded hands for as low as $138 and as high as $300 during this past year. If you were to ask what’s a fair price to pai for the stock, you’ll get responses that are similarly all over the map.

So it seems like now is the right time to address Tesla’s valuation. To sort through all of the uncertainties, the optimistic highs, the pessimistic lows, the politics, and the personalities to come up with a objective opinion of what Tesla’s stock is worth.

The Discounted Cash Flow

Determining an intrinsic price per share will once again include a discounted cash flow valuation model. I’ve previously built DCFs to support my claims that the small satellite launcher Rocket Lab (Nasdaq: RKLB) is a significantly undervalued and is worth $22 per share, that the South Korean online marketplace Coupang (NYSE: CPNG) is fairly valued and is worth $19 per share, and that the digital advertising platform The Trade Desk (Nasdaq: TTD) is moderately overvalued and is worth $62 per share.

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Yet Tesla’s an entirely different animal. This is one of the most complex companies in the market, led by one of the most innovative people on the planet. There are a thousand moving pieces — both figuratively and literally — and they’re changing every year. And while Tesla is already a world-class supplier of electric vehicles, it’s also quickly becoming a leader in AI, solar power production, battery storage, and a half dozen other businesses as well (including flamethrowers and tequila).

It would be nearly impossible to nail down Tesla’s valuation to two decimal points without admitting all of its uncertainties.

Some of these uncertainties are financial or operational, and they’re largely within Tesla’s control. Such as how it will raise capital to fund its Gigafactory expansion. Or how quickly it can introduce new models and then ramp up their production.

Others are market-driven and can’t be directly controlled, though they can certainly be influenced. Such as how many Teslas will sell in China. Or how much people will be willing to pay for the Cybertruck.

And still other uncertainties lie beyond Tesla’s control. Such as government subsidies that might stimulate the demand for electric vehicles. Or whether Elon “Funding Secured” Musk will make another faux pas that might attract the wrath of regulators.

Let’s Get This Party Started

But even with the known-knowns, the known-unknowns, and the unknown-unknowns, it’s still worth the valiant effort for us to put a stake in the ground and estimate Tesla’s intrinsic valuation. It will us help to calibrate expectations, and how those expectations might currently be influencing its extremely-volatile stock price on any given day.

I just began my Tesla valuation adventure earlier this morning. I’m three cups of coffee in, with an entire box of Dunkin’s original that’s open and ready to go.

I’ll share the initial DCF and price target as a free 7investing article, though the real fun is taking place in our Community Forum. This is where I share all of my inputs and assumptions, and I also continually update them throughout the year. Here’s a link to join our 7investing Community Forum.

Before we jump in, I’d like to share a personal note of appreciation. This is something I take quite seriously, but I also have a lot of fun with it. I really enjoy getting to dive deep into several of the market’s most innovative companies. And then also share my insights in a way that is valuable to other investors. Investing is a long-term journey, and it helps to have a guide to navigate along the way. Thank you for giving me the opportunity to do what I love and am passionate about.

So let’s put our foot on the accelerator. I’m looking forward to finding out what’s really under the hood at Tesla with you this week.

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