To The Moon

In today's edition, we will track the fundamental readings of long-term bullish companies in strong (TigerTrade Top 1 Gainer) concepts each week and look forward to your attention and discussion.

Disclaimer: Capital at risk. This is not direct financial advice or a recommendation to acquire or dispose of any investment, but for communication only.

The calls for a new bull market continue as the S&P 500 Volatility Index hits pre-pandemic lows.

The best-performing industries are tesla concept, new energy vehicle, industry 4.0, China education and lidar concept.

Considering the different perceptions of the stock, this time TigerPicks choose  $Ford(F)$ to have a fundamental highlight to help users understand it better.

$Ford(F)$

The opening of $Tesla Motors(TSLA)$'s superchargers may prove to be Ford's tailwinds, significantly aided by the latter's diversified strategy across sedan/truck/commercial EVs.

While it remains to be seen if Ford may achieve its ambitious 2023 production targets, it has taken great steps to strengthen its lithium supply for over 3M EVs.

Combined with its high-margin and high-growth BlueCruise, we may see Ford's top and bottom lines recover from these depressed levels as more embrace its EV and SaaS offerings.

Continues To Grow

Ford Motor Company has dramatically raised its stock prices with the surprising announcement of the Supercharger collaboration with Tesla. While the eventual opening up has been expected for the latter to access federal funding, F's early deal suggests that the management has bought into the "large, reliable, and efficient charging system" offered by the EV leader.

We suppose this cadence is great for F as well, due to its lower battery capacity of between 226 miles for the standard range and up to 320 miles for the extended range, compared to TSLA's current offerings of between 267 and 375 miles.

Tesla Superchargers also offer a faster charging option of up to 200 miles within 15 minutes, compared to F's existing BlueOval Charging Network at 54 miles within 10 minutes or those offered by ChargePoint (CHPT) at 100+ miles within 30 minutes.

As a result of the Supercharging, we believe F's drivers may be better assured of their driving and towing range, the latter of which has been a teething problem for many F-150 Lightning users, as opposed to the more expensive and longer-ranged battery options.

Ford's Mach-E VS Tesla's Model Y

Ford's Mach-E VS Tesla's Model Y

Ford may receive "free exposure" to the largest group of EV users, namely TSLA drivers, potentially attracting new buyers, since over 60% of Mach E customers are new to the brand, significantly aided by the lowered prices. By early May 2023, the automaker has further cut prices by up to $4K, triggering lower entry points of $42.99K for Mach-E, compared to the $48.88K for TSLA's Model Y.

With Mach-E boasting a more attractive price from $39.24K onwards (after deducting the $3.75K tax credit) compared to Model Y at $41.38K (deducting the $7.5K), we suppose F's EV demand may continue to grow ahead, significantly aided by the model's handsome features.

With TSLA's superchargers to be open to F's user base by early 2024, we may see more comparisons between the two automakers' sedan/ SUV offerings then, potentially shifting the balance in demand.

The first generation of EV to be profitable by the end of 2024

F has guided profitability for its first-generation electric vehicles on a pretax basis by the end of 2024, significantly aided by its robust COGS efficiency of -$5K for the Mach-E by the end of 2023.

This is on top of its growing success in the Ford Pro SaaS, BlueCruise, with the miles-driven expanding tremendously to 70M (+66.6% QoQ) by the latest quarter, similarly triggering the expansion in its subscription revenues (+64% QoQ) and total subscriptions to 600K.

Given the early success of its high-margin software business across fleet management, telematics, and charging, we remain confident in F's resilience ahead, significantly aided by its market-leading position in the Active Driving Assistance System segment by early 2023.

The Consumer Report has placed F's BlueCruise ADAS firmly at the top, scoring 84 points, topping $General Motors(GM)$ Cruise at 75 points and TSLA's Autopilot at 61 points. With such a promising development, we will not be surprised if the former's SaaS proves to be a tremendous top and bottom-line driver moving forward, with it already obtaining regulatory approval in the UK and EU thus far.

F YTD EV/Revenue and P/E Valuations

F YTD EV/Revenue and P/E Valuations

The same optimism was not reflected in F's valuations, which continue to be moderated to NTM EV/ Revenues of 0.95x, compared to its 5Y mean of 1.16x. Then again, we suppose this is linked to its legacy automaker status, since General Motors' valuation is similarly impacted to 0.86x, with TSLA remaining highly buoyant at 5.89x thus far.

This is despite the supposed expansion in F's top line at a CAGR of 5.5% through FY2025, compared to its historical cadence of 0.5% pre-pandemic and 1.2% during the pandemic. The same was observed with GM at -4.4% pre-pandemic/ 4.5% pandemic/ 3.6% through FY2025, with TSLA already expected to decelerate (albeit still with an excellent growth rate) from 52% pre-pandemic and 49.1% pandemic to 25.3% through FY2025.

F 1Y Stock Price

F 1Y Stock Price

Then again, we are not overly concerned for now, since F has already successfully rebounded from its previous October and December 2022 support levels of $11s. As a result, we continue to rate the stock as a Buy here, if the exercise consequently lowers long-term investors' dollar cost averages.

This is going to be huge for Ford

The partnership between Ford and Tesla came as a big surprise and it is a win-win for both companies, especially for Ford. Ford was the second-largest seller of electric vehicles in the U.S. in 2022 after Tesla and the announcement opens up Tesla’s vast Supercharger network in North America to Ford EV owners. For Tesla, it is a big win because Ford is the first major manufacturer that adopts Tesla’s charging ports. Ford has said that it is going to equip all its future electric vehicle models (starting in FY 2025) with Tesla's NACS charging ports which makes the purchase of a Ford EV a lot more compelling. Customers that drive a Ford EV can therefore access Tesla’s high-density, fast-charger network in addition to charge points found at Ford’s proprietary Blue Charge Network. The partnership also highlights that rival auto makers can collaborate on important issues which I believe will ultimately help drive electric vehicle adoption in the U.S.!

Stock Price Forecast:

Here are the target price forecast for the future 12 months from analysts on CNNMoney.com.

The 18 analysts offering 12-month price forecasts for Ford Motor Co have a median target of 13.00, with a high estimate of 22.00 and a low estimate of 10.00. The median estimate represents a -5.39% decrease from the last price of 13.74.

Hope this analysis helps you get more understanding of the company's whole image, Tiger Picks will follow up the monthly performance as a longterm track.

Resource:

https://seekingalpha.com/article/4609032-ford-envy-coming-soon-tesla-superchargers

https://seekingalpha.com/article/4608371-ford-hits-a-homerun-with-tesla-partnership

What are your thoughts on $Ford(F)$?

Are you more bullish on Ford or $Li Auto(LI)$?

Please leave your comment below.