Tesla will have lower shipping cost to European buyers once the Berlin factory begins to ramp.ī.
#Clerks soundbyte full#
its factories are not yet operating at full efficiency and.the full impact of recent price increases is not yet in the numbers.
#Clerks soundbyte software#
Tesla, like Apple did for phones, is increasing the high margin software and subscription components of sales.Yet, we believe they will still go up from here as: As we forecast in prior letters, Tesla gross margins have been rising and in its most recently announced fourth quarter were the highest in the industry. For the Model X, delivery dates were even longer. As of December 31, wait times for the standard Model 3, Model Y and Model S were approximately 10-11 months while the more expensive high-performance version of each had delivery times of 2-3 months. Rather than overspending to secure more supply (a major error by Peloton), Tesla has chosen to raise prices and to prioritize production of more expensive (and more profitable) versions of its products. While Tesla has made and will continue to drive up capacity by launching multiple new factories, supply of parts has prevented the factories from operating at capacity. This has been partly based on a substantial surge in demand and partly due to a shortage of some parts. And this is before the Cyber Truck with it’s over a million pre-orders, has come to market. Tesla demand has far outstripped supply, as backlog increased steadily during 2021. Tesla will continue to outperform the market (it closed at $810/share)Ī.Of course, I cannot predict that the roughly 59% average decline in revenue multiple among these stocks represents the bottom…as I never know where the bottom is.Ģ022 Stock Recommendations (Note: base prices are as of February 25, 2022)
Given the compression in revenue multiples across the board in tech stocks, the opportunity for investing appears timely to me. While revenue growth at Tesla and CrowdStrike were not impacted in a similar way by the pandemic as both had more normal revenue growth patterns in 20, they still saw share performance significantly trail revenue growth for the past year. While Zoom is the most extreme situation of the four companies in Table 2, each of the other three have had a similar whipsaw of its revenue growth rate and in each case its stock soared in 2020 only to heavily trail revenue growth in 2021 despite its 2-year CAGR being above pre-pandemic levels in every case. Yet, its share price is now roughly only 10% above where it was 2 years ago and down 63% from January 1, 2021. The 2-year CAGR was 151% and Zoom had over 6 times the revenue in Q3 2021 than it did 2 years earlier. Instead, the growth rate soared in 2020 and the jump was followed by additional growth in 2021. Such a high rate of growth usually declines each year barring some abnormal situation. In Q3 2019, Zoom’s revenue growth was 85%.
This clearly did not occur over the last 14 months as illustrated in Table 1. In the introduction to my picks last year, I pointed out that over time share appreciation tends to correlate to revenue growth. For 2022, the 6 stocks I’m recommending are Tesla, DocuSign, Amazon, Zoom, CrowdStrike and Shopify (the only new one on my list). What is interesting is that the company performance of those I like continues to be stellar, but their stocks are not reflecting that. Starting in November of 2021 the Tech sector has taken a beating as inflation, potential interest rate spikes, the Russian threat to the Ukraine (followed by an invasion), a Covid jump due to Omicron and supply chain issues all have contributed to fear, especially regarding high multiple stocks. Suffice it to say the recap will be of a down year after posting my best year ever in 2020, but that means (at least to me) that there is now an opportunity to build a portfolio around great companies at opportune pricing. Because I don’t want to delay recommendations further, I am going to publish the recap of 2021 picks after the new Top Ten blog is out. On the other hand, it turns out that the steep decline in tech valuations affords an opportunity for acquiring recommended stocks at much lower cost than they were on January 2. On the one hand, I’m mortified that my annual Top Ten list has been delayed by 2 months. The past year has been extremely busy for me and the decline in blogs produced has been one of the consequences.
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