Option Witch | FCF Could Push TSLA Stock 37% Higher, Short OTM Puts for Income

Barchart01-23

Tesla Inc. will report its Q4 earnings this week on Jan 24 (post-market close). The company could produce positive free cash flow (FCF), unique among EV makers. TSLA stock is at near-term lows and is...

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Stevenwml
01-23
Stevenwml
LFG!

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TSLA stock is at near-term lows and is...</p>\n\n<a href=\"https://www.barchart.com/story/news/23488059/tesla-stock-is-still-worth-considerably-more-based-on-its-free-cash-flow\">Source Link</a>\n\n</div>\n","source":"barchart_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Option Witch | FCF Could Push TSLA Stock 37% Higher, Short OTM Puts for Income</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nOption Witch | FCF Could Push TSLA Stock 37% Higher, Short OTM Puts for Income\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-01-23 16:19 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.barchart.com/story/news/23488059/tesla-stock-is-still-worth-considerably-more-based-on-its-free-cash-flow><strong>Barchart</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Tesla Inc.  will report its Q4 earnings this week on Jan 24 (post-market close). The company could produce positive free cash flow (FCF), unique among EV makers. TSLA stock is at near-term lows and is...</p>\n\n<a href=\"https://www.barchart.com/story/news/23488059/tesla-stock-is-still-worth-considerably-more-based-on-its-free-cash-flow\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"TSLA","symbol_name":"特斯拉","start_time":0,"source_url":"https://www.barchart.com/story/news/23488059/tesla-stock-is-still-worth-considerably-more-based-on-its-free-cash-flow","article_id":"2405680937","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2405680937","pubTimestamp":1705997954,"sourceInfo":{"source_id":"barchart_highlight","name":"Barchart"},"weMediaInfo":null,"summary":"Tesla Inc.  will report its Q4 earnings this week on Jan 24 . The company could produce positive free cash flow , unique among EV makers. TSLA stock is at near-term lows and is worth a good deal more.I discussed this in my last Barchart article 3 weeks ago, “Tesla Stock Still Has at Least 24% Upside Based on Its Free Cash Flow.” I suggested that TSLA stock could be worth $318 per share with a market cap close to $1 trillion  over the next year.Based on more recent numbers, I am revising my target price to $286.24 per share. However, that is still 35% over today's price.This is based on the company continuing to produce positive FCF, just as it did last quarter. It generated FCF equal to 3.4% of its quarterly revenue. In the prior year, its FCF margin was 3.87%. This makes Tesla the only North American company producing EVs that generates positive FCF from EV production.For example, the $180 strike price puts expiring on Feb. 9, 2024, which is 3 weeks from now, trade for $1.25 per contr","collect":0,"end_time":0,"defaultTopTitle":"barchart.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"TSLA":"特斯拉","TSLL":"Direxion Daily TSLA Bull 2X Shares"},"translate_title":"FCF可能推动TSLA股票上涨37%的期权，OTM为收益做空期权","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"TSLA":1,"TSLL":1},"content_text":"Tesla Inc.  will report its Q4 earnings this week on Jan 24 (post-market close). The company could produce positive free cash flow (FCF), unique among EV makers. TSLA stock is at near-term lows and is worth a good deal more. Based on more recent numbers, I am revising my target price to $286.24 per share. However, that is still 35% over today's price.FCF Could Push TSLA Stock 37% HigherThis is based on the company continuing to produce positive FCF, just as it did last quarter. It generated FCF equal to 3.4% of its quarterly revenue. In the prior year, its FCF margin was 3.87%. This makes Tesla the only North American company producing EVs that generates positive FCF from EV production.Moreover, we can use this FCF margin figure to produce a target price for TSLA stock.For example, analysts surveyed by Seeking Alpha estimate $117.45 billion in revenue for 2024. So, using the 3.87% FCF margin, Tesla could make $4.55 billion in FCF (i.e., $117.45b x 0.0387). That could lead to a $910 billion market cap using a 0.5% FCF yield metric (i.e., $4.55b/0.005). (I discussed using that FCF metric in my last article.) That is 34.9% higher than today's $674.5 billion market cap.In other words, TSLA stock could be worth 37.5% more than today's price of $208.8, or $286.24 per share.Analysts Still See Significantly Higher PriceOther analysts also see higher prices for TSLA stock going forward. This shows that the stock may have reached a near-term bottom ahead of its earnings release.For example, the average price target of 37 analysts surveyed by Refinitiv (as seen on the Yahoo! Finance TSLA site) is $228.65 per share. That reflects a potential upside of 7.76% from here.In addition, AnaChart.com, a new sell-side stock analyst tracking site, shows that 35 analysts have an average price target of $222.13 per share. That reflects a potential 4.68% upside in TSLA stock.My target is based on the company's FCF performance. The sell-side analysts tend to track the stock's performance, as can be seen in AnaChart's chart tracking of analysts' past recommendations.The bottom line is that TSLA stock seems to be nearing a low point, at least on a near-term basis. Once the company produces its earnings report, analysts are likely to revise their targets. If, as should be expected, Tesla continues to generate positive FCF, TSLA stock could end up reflecting a higher price.One way for shareholders to play this is to short OTM put options for extra income.Shorting OTM Puts for IncomeFor example, the $180 strike price puts expiring on Feb. 9, 2024, which is 3 weeks from now, trade for $1.75 per contract. That reflects an immediate 0.97% yield to the short seller (i.e., $1.75/$180.00).$TSLA 20240209 180.0 PUT$ TSLA Puts expiring Feb 9, 2024 - As of Jan. 22, 2024This is very attractive since the strike price is already 15% below today's price. In other words, the short seller would not be obligated to buy 100 shares unless TSLA falls over 15% in the next 3 weeks.That is an extra way for investors in TSLA stock to make income in the short term. They can do this while already owning TSLA stock without having to worry about having to give up their shares if the stock falls. In fact, if they are concerned that the shares could fall below $180.00 they can use the income generated (i.e. $1.25 sold at $180) to buy puts at the $175 or $170 strike price level. There would still be a positive net credit in doing so.The bottom line is that shareholders have ways to wait out this near-term weakness in TSLA stock. As long as the company keeps generating positive FCF, they could expect to see a higher price.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[{"id":266152936833176,"gmtCreate":1705999178260,"gmtModify":1705999182773,"author":{"id":"4100316437044830","authorId":"4100316437044830","name":"Stevenwml","avatar":"https://community-static.tradeup.com/news/6c709b93db815fb5a0c95b5f3ecd2c56","vip":1,"hat":"https://static.tigerbbs.com/b0a2963eb37c60c5d6d4a8dbcd266952","crmLevel":3,"crmLevelSwitch":1,"idStr":"4100316437044830","authorIdStr":"4100316437044830"},"htmlText":"LFG!&nbsp;","listText":"LFG!&nbsp;","text":"LFG!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/266152936833176","repostId":2405680937,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":11,"commentSize":1,"repostSize":1,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2405680937"}