Part 6/7:
By incorporating these risk factors, the model arrives at a more realistic and conservative valuation for Tesla's future cash flows.
Calculating the Share Price Targets
Based on the risk-adjusted DCF analysis, the model generates share price targets for Tesla. These targets are not static but rather dynamic, as they are updated annually to reflect the changing landscape and the 10-year forward-looking nature of the valuation.
The model suggests that Tesla's fair value share price, including the risk factors, could be around $328 in 2024. However, the model also projects that this price target could rise to between $640 and $999 by 2025, as the future cash flows are factored in.