At Tesla Motors (TSLA), we believe that our price objective of $460 is well-supported by a thorough sum-of-the-parts (SOTP) analysis. By valuing each of Tesla’s core business segments individually, we can gain a more complete understanding of the company’s potential for growth and profitability.

Firstly, we value Tesla’s Automotive business at 8x EV/EBITDA based on our long-term (LT) EBITDA forecast. This valuation range is comparable to that of Tesla’s peers, indicating that the company’s automotive segment is fairly valued.

Next, we turn to Tesla’s Robotaxi, FSD, Optimus, and Energy Generation & Storage segments. We employ a discounted cash flow (DCF) analysis to estimate the present value of each segment’s future cash flows, using conservative assumptions and a long-term growth rate of 4% for auto deliveries and FSD subscriptions. For Optimus, we assume a 40% penetration rate in US manufacturing and 35% in US households by 2040. Similarly, for Energy, we assume an 11.2% weighted average cost of capital (WACC) and a long-term growth rate of 3%.

By considering each segment’s unique characteristics and growth potential, we arrive at a total valuation of $460 per share. This estimate takes into account the company’s diverse revenue streams and its position as a leader in multiple industries, making Tesla an attractive investment opportunity for those seeking long-term growth and returns.