Tesla Inc. (NASDAQ:TSLA)

The financial data presents a series of key profitability metrics over five consecutive years, revealing distinct trends and fluctuations.

Net Income Attributable to Common Stockholders (US$ in millions)

The net income shows a substantial increase from 721 million in 2020 to a peak of 14,997 million in 2023, indicating strong growth in profitability during this period. However, there is a noticeable decline in 2024 to 7,091 million, suggesting a reduction in net profit compared to the previous two years.

Earnings Before Tax (EBT) (US$ in millions)

EBT follows a similar trend as net income with an increase from 1,154 million in 2020 to 13,719 million in 2022, demonstrating consistent earnings growth before tax considerations. A decline is observed in subsequent years, decreasing to 9,973 million in 2023 and further to 8,990 million in 2024, indicating pressure on earnings before tax.

Earnings Before Interest and Tax (EBIT) (US$ in millions)

EBIT increases significantly from 1,902 million in 2020 to a high of 13,910 million in 2022, reflecting enhanced operational profitability. Similar to EBT, EBIT declines afterwards to 10,129 million in 2023 and 9,340 million in 2024, which may point toward rising costs or reduced operational efficiency.

Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) (US$ in millions)

EBITDA demonstrates strong growth from 4,224 million in 2020 to a peak of 17,657 million in 2022. It dips noticeably to 14,796 million in 2023 but remains relatively stable into 2024 with a slight decrease to 14,708 million. This trend suggests that while cash-based profitability experienced robust growth initially, it faces some headwinds in later years, albeit with less volatility than net income and EBIT.

Overall, the data reflects an initial period of strong growth across all profitability metrics through 2022, followed by a downturn beginning in 2023. The moderation in profitability in the latest years could be attributable to various factors such as market conditions, increased costs, or strategic investments affecting margins. The relative stability of EBITDA compared to net income and EBIT in the final years indicates that non-cash expenses and interest/tax impacts may have amplified the reduction in net income.

The analysis of the financial data reveals significant volatility and changes over the observed periods in terms of enterprise value (EV), EBITDA, and the EV/EBITDA ratio.

Enterprise value (EV)

The enterprise value displays notable fluctuations. Initially, there is an increase from approximately 822 billion US dollars at the end of 2020 to about 928 billion by the end of 2021. This is followed by a sharp decline to approximately 530 billion in 2022. Subsequently, EV experiences a moderate recovery in 2023, rising to roughly 585 billion, before sharply increasing again to nearly 1.26 trillion by the end of 2024. This pattern suggests a period of volatility with a strong rebound in the latest year.

Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)

EBITDA shows a robust upward trend from 4.2 billion US dollars at the end of 2020 to a peak of 17.7 billion in 2022. However, this peak is not sustained as EBITDA declines somewhat to 14.8 billion in 2023 and remains almost stable at approximately 14.7 billion in 2024. The data indicates significant growth in profitability up to 2022 followed by a moderate contraction and stabilization thereafter.

EV/EBITDA Ratio

The EV/EBITDA ratio decreases markedly from a very high 194.58 at the end of 2020 to 96.39 in 2021, and further drops to 30 by the end of 2022, indicating improved valuation relative to earnings. Nevertheless, this ratio increases again to 39.53 in 2023 and rises more sharply to 85.66 in 2024. This suggests that while operational earnings grew considerably up to 2022 improving valuation multiples, the subsequent EV increases without proportional EBITDA growth have led to a rising EV/EBITDA, signaling a higher valuation multiple by the end of 2024 compared to the immediate previous years.

Overall, the data reflects a dynamic financial performance characterized by initial rapid growth in earnings, coupled with a fluctuating enterprise value leading to changing valuation multiples. The recent surge in EV outpaces EBITDA growth, resulting in increasing valuation ratios, which may hint at market optimism or changing investor expectations despite stable earnings.