Tesla's surprising new valuation from former portfolio manager

Former Fidelity portfolio manager George Noble posted a sum-of-the-parts, or SOTP, valuation for Tesla on X

For newer Flankers, SOTP valuations are a great way to value a business that have multiple segments.

SOTP aims to look at the value of a company’s different business units to see if the market is missing something

Here's what he saw:

• Tesla's car business is worth $60B, or $18/share

• Tesla's battery storage is worth $20/share

Those are (currently) Tesla's two business units.

Then there are the AI-related businesses. If Waymo, Alphabet's robo-taxi business, is worth ~$100B (based on private-market valuations), then Tesla is worth ~$30/sh, Noble estimates.

If robot maker Boston Dynamics is worth $39B, then Tesla's Optimus is worth ~$12/sh.

This puts Tesla's fair value between $80-$122/sh.

Compare this to the current stock price of $451/sh... damn.

There is a single-word answer for why Tesla has such a premium valuation: story.

Noble's counter, "While not precise, this back-of-the-envelope calculation is far more realistic than the fanciful/irresponsible figures cited by the narrative promoting [Tesla] momentum investors who worship at the [altar] of price,” wrote Noble."

I still hold my Teslas position I took back in 2016, and I don't have any intention on selling. I like the company, I think they do have a good story.

Historically, Tesla has been able to achieve their lofty goals, albeit certainly not on schedule.

He has a fair rebuttal to my position.

Sentiment: Slightly bearish