Tesla's Strong FCF Margins Could Imply TSLA Stock is Worth Over $500

Core Insights - Tesla, Inc. generated $3.9 billion in free cash flow (FCF) in Q3, which is over 14% of its sales, indicating strong financial performance [1][6] - The stock could be undervalued by over 15%, with a potential price target of $502 per share if FCF remains robust in the upcoming year [1][3] - Tesla's revenue increased by 11.6% year-over-year to over $28 billion, driven by a surge in orders before the expiration of a significant tax subsidy [4][6] Financial Performance - In Q3, Tesla's FCF was $3.99 billion, representing 14.2% of its $28.1 billion in sales [6] - The trailing 12-month FCF was $6.834 billion, which is 7.15% of total revenue of $95.633 billion [6] - Year-to-date (YTD), the FCF margin stands at 6.85%, with projections suggesting a conservative estimate of 3.425% for Q4 [7] Future Projections - Analysts forecast an average revenue of $110.32 billion for 2026, reflecting a 15.6% increase from the current year's estimates [5] - Based on these forecasts, FCF for 2026 could rise to approximately $5.74 billion, assuming a 6% FCF margin [8]