Tesla Valuation Multiples

						The "Stepping Stone" Year
[Thousands of Dollars]	Actual For Last					Year T+1
NOPAT Statements	Historical Year	Year 1	Year 2	Year 3	Year 3	Year 4
Net Sales	150.0	200.0	250.0	300.0	350.0	371.0
Cost of Goods Sold	-75.0	-100.0	-125.0	-150.0	-175.0	-185.5
Gross Profit	75.0	100.0	125.0	150.0	175.0	185.5
SG&A Expenses	-30.0	-40.0	-50.0	-60.0	-70.0	-74.2
Depreciation	-7.5	-10.0	-12.5	-15.0	-17.5	-18.6
EBIT	37.5	50.0	62.5	75.0	87.5	92.8
Interest	0.0	0.0	0.0	0.0	0.0	0.0
EBT	37.5	50.0	62.5	75.0	87.5	92.8
Taxes (40% rate)	-15.0	-20.0	-25.0	-30.0	-35.0	-37.1
NOPAT	22.5	30.0	37.5	45.0	52.5	55.7
Required Net Working Capital:
Req Cash+Receivables+Inventories	50.0	66.7	85.0	102.0	119.0	129.0
Minus: Payables+Accruals	-25.0	-33.3	-41.7	-50.0	-58.3	-61.8
Req Net Working Capital (RNWC)	25.0	33.3	43.3	52.0	60.7	67.2
Increase in RNWC		8.3	10.0	8.7	8.7	6.5
Fixed Assets Schedule:
Net Fixed Assets (NFA)	50.0	66.6	83.3	100.0	116.7	123.7
Increase in NFA		16.7	16.7	16.7	16.7	7.0
Plus: Depreciation		10.0	12.5	15.0	17.5	18.6
CAPEX		26.7	29.2	31.7	34.2	25.5

Based on the comparable companies listed in the excel template, calculate 12 month multiples of revenue and EBITDA and estimate a value for Tesla as of 12/31/17. Reference the excel spreadsheet attached to the assignment drop box.

What other factors should you consider to correctly value Tesla as a public company? What were/are the analysts saying regarding the stocks future performance (i.e., Buy, Hold, Sell, etc.)?

What was Teslas enterprise value as of 12/31/17? If you were considering investing in Tesla, would you say the stock was overpriced, underpriced or fairly valued in the public markets as of 12/31/17, and why?

We will not develop a discounted cash flow (DCF) model for Tesla, but I did want to ask one question about the discount rate that you would use if you were developing a DCF model for Tesla. If the average cost of capital for the automotive industry is ~8.5%, would the cost of capital for Tesla be higher, equal to, or lower than the average cost of capital and why?