{"id":997,"date":"2024-01-22T02:01:02","date_gmt":"2024-01-22T02:01:02","guid":{"rendered":"https:\/\/muskmarketalert.com\/?p=997"},"modified":"2024-01-22T02:01:02","modified_gmt":"2024-01-22T02:01:02","slug":"maximizing-profits-navigating-teslas-positive-free-cash-flow","status":"publish","type":"post","link":"https:\/\/muskmarketalert.com\/maximizing-profits-navigating-teslas-positive-free-cash-flow\/","title":{"rendered":"Maximizing Profits: Navigating Tesla’s Positive Free Cash Flow"},"content":{"rendered":"

Tesla’s positive FCF suggests a 35% stock increase, with strategies like shorting OTM puts offering income opportunities.<\/p>\n

Tesla’s Free Cash Flow and Stock Value<\/strong><\/h2>\n

As Tesla Inc. (TSLA<\/a>) prepares to report its Q4 earnings on Jan 24, the spotlight is on its potential to produce positive free cash flow (FCF), a rarity among EV makers. With TSLA stock at near-term lows, it’s projected to be worth considerably more.<\/p>\n

Past Analysis and Revised Target Price<\/strong><\/h2>\n

In a recent Barchart article<\/a> titled \u201cTesla Stock Still Has at Least 24% Upside Based on Its Free Cash Flow,\u201d I predicted a target of $318 per share. However, with newer data, I’ve adjusted this target to $286.24 per share, still 35% above the current price.<\/p>\n

The Potential for a 35% Increase in TSLA Stock<\/strong><\/h2>\n

This projection is based on Tesla’s consistent production of positive FCF. Last quarter, Tesla’s FCF was 3.4% of its quarterly revenue, making it the only North American EV producer with positive FCF. Using this margin, and analysts’ revenue estimates for 2024, Tesla could see a $910 billion market cap, a 34.9% increase.<\/p>\n

Analyst Perspectives on TSLA Stock<\/strong><\/h2>\n

Other analysts echo this positive outlook. Refinitiv’s average target from 37 analysts stands at $228.65 per share, and AnaChart.com reports an average target of $222.13 per share, both indicating potential growth.<\/p>\n

Near-Term Stock Performance and Expectations<\/strong><\/h2>\n

With the upcoming earnings report, analysts may revise their targets. If Tesla maintains its positive FCF trend, TSLA stock could reflect a higher value. This near-term low point offers an opportunity for shareholders.<\/p>\n

Strategy: Shorting OTM Puts for Income<\/strong><\/h2>\n

An attractive strategy for investors is shorting out-of-the-money (OTM) put options. For example, the $180 strike price puts expiring on Feb. 9, 2024, currently trade at $1.25 per contract. This method offers a substantial yield and is a safeguard against a 15% stock drop in the short term.<\/p>\n

Conclusion<\/strong><\/h2>\n

Shareholders have strategies to navigate this near-term weakness in TSLA stock. As Tesla continues to generate positive FCF, expectations for a higher stock price remain strong, offering a promising outlook for investors.<\/p>\n

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