Paper Bag Investor
@PaperBagInvest
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Searching for high-conviction, multiBAGger investment opportunities. Look from many angles, research deep, then invest big. 24% CAGR since 2009. IT’S IN THE BAG
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Pinned Tweet
I had the pleasure of interviewing
@Lemonade_Inc
's CEO and co-founder
@daschreiber
. We discussed investors' most pressing questions and the future of $LMND 🍋. It's a packed 1hr 9min. Thanks again Daniel!
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Tesla Q4 deliveries: 308,650
Rivian Q4 deliveries: 909
Tesla Q4 auto gross margin: 30.6%
Rivian Q4 auto gross margin: -709%
Tesla Q4 operating expenses: $2.2B
Rivian Q4 operating expenses: $2.1B
$TSLA $RIVN
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Tesla Q2 2011 vs Rivian Q4 2021
(soon after IPO)
Auto Rev:
$39M vs $54M
Auto Gross Margin:
22% vs -709%
OpEx:
$77M vs $2,071M
Net Loss:
$59M vs $2,461M
$TSLA vs $RIVN
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The Tesla bot is going to e 5’8” in height …. or…. 4’20”….
@elonmusk
I see what you did there.
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Lowering $TSLA price targets by 40% (or watching the stock drop 40%) because of temporary Shanghai shutdowns is like saying a rental property is suddenly worth 40% less because it sat vacant for a month.
All I know is $TSLA is a massive BUY at these prices.
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I liked $TSLA at $1200,
I liked it more at $1000,
I like it even more at $880.
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I think it's very probable that by February 1, 2023 $TSLA will be over $1500 per share. Which is a 66% upside over the next 10 months. Super bullish on $TSLA right now.
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If $TSLA does $6 EPS in 2023, they’re at a forward PE of 19.
Let that sink in.
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Say Tesla does $3/share earnings in Q4.
Annualized = $12/share.
Current price is $1062.
$1062/$12 = Annualized PE of 88.
The conclusion?
$TSLA is a bargain. 📈
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If $TSLA does $20 in EPS in the next 12 months,
at $894/share,
we’re at a forward PE of 45.
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Just your friendly reminder that if Tesla does earnings per share of $18 for 2022, at $889/share they have a forward PE of 49.
$TSLA
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After digesting the Tesla deliveries beat and considering where they are headed this year, I think it’s pretty probable $TSLA gains 50 to 100% over the next 12 months.
Not financial advice.
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Just did some browsing of the $TSLAQ side of Twitter, and the only remaining bear argument seems to be:
"It's all a fraud."
It's literally step 1 of the 5 stages of grief. $TSLA
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Why do people view the Cybertruck as impractical? Do they not understand the engineering behind it?
I see it as a 1st principles designed utilitarian vehicle. No rust, dents or scratches. Frame on outside = roomier inside. Raise/lower suspension. High manufacturability.
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If Tesla earns $15/share for 2022 (which imo is very likely)
they have a forward PE of 53.
$TSLA
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About to take delivery of a Tesla Model Y 🔥. One more for Q3. $TSLA
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Some personal news: my wife gave birth to our second child this weekend. Mom and baby are doing great. Life is a precious gift!
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Just drove $TSLA FSD (12.3.3) for the first time ever. It was extremely impressive. It’s not perfect, but it truly feels like a human is driving. I will continue to more thoroughly test.
Where I live we have harsh winters and this time of year there are unique challenges around
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So I discovered yesterday that new Model Y's on the used market in Canada sell for at least $10k over Tesla's price.
#demandproblems
$TSLA
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$TSLA Megapack BIG PICTURE math:
Tesla's goal is to deploy 1500 GWh of storage/yr in 2030 out of a 10k GWh market at that time
That's 375x what they did in 2021 (4 GWh)
That's = to 37 fully operational Lathrop plants.
36 more plants in 8 yrs = ~4.5 new plants/yr 🤯
@Zerosumgame33
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So Tesla Q1 earnings are up over 750% YoY, but the PE ratio is at 99.
Okay okay okay.
Thank you for the sale. $TSLA
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Some thoughts on $TSLA advertising
Elon is right that purchase price is incredibly important to demand. Macro environment with higher rates and recession concerns are a massive weight on demand. At some point rates should come down and demand will skyrocket.
But, Elon is wrong
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Had the pleasure of hanging out with
@EmmetPeppers
last night and he let me drive his Cybertruck for over 2 hours.
Some CT things that stood out to me from the drive:
- The suspension is incredible. I went over a pot hole at highway speed and it felt like nothing.
- Sound
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I love looking up articles showcasing public opinion of the past.
Here is an iPhone opinion piece from 2007. Sound at all similar to FUD we've heard for years (and continue to hear today) about $TSLA?
(cult like fans, legacy competition will easily destroy them)
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$LMND is firing on all cylinders. I plan to do a video this evening. 🍋
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Based on what I'm seeing, I will be getting a 10x to 20x on my $TSLA shares from current prices. 📈
Based on what I’ve just seen, I will be losing $200 a month. 😭
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I think Tesla’s next generation vehicle will be called the Model A
Model S
Model 3
Model X
Model Y
Cybertruck
Model A
Roadster
Semi
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Elon actually seems seriously serious about making $DOGE a global currency.
SpaceX launching satellite Doge-1 to the moon next year
– Mission paid for in Doge
– 1st crypto in space
– 1st meme in space
To the mooooonnn!!
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$LMND 🍋 In Force Premium vs Operating Expenses. Note how one is steadily rising and the other is flat. And bears say there isn't a clear path towards profitability ...
@Lemonade_Inc
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What many don’t realize is the value of $TSLA FSD rises exponentially as it gets closer to L4 and L5 capabilities. Sure, a driver assist feature isn’t that valuable to the market, but a vehicle that can safely drive itself with no one inside or monitoring? The value to
IMO, only $TSLA enthusiasts (10-15% of TSLA buyers) will pay $12K or $199/month for an excellent drivers’ assist tool. The premise by many TSLA enthusiasts who have been arguing with me for 5 years (and so far been wrong) is the car will drive itself without disengagement or
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How is $LMND 🍋 different than a legacy insurer?
The answer is they are built from the ground up on a fully digital platform with the ideal in mind.
This fully digital platform brings many qualitative advantages.
1. Efficiency in Administration
- all done in one simple app
-
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I see a lot of comments of people “selling everything” and “moving to cash”.
Sorry, but isn’t this the time to be buying more of the companies you love? That’s my plan. 🤷🏻♂️
Not investment advice.
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$TSLA feels like $AMZN in the early 2010s. Amazon’s revenue back then was growing exponentially as they took market share and mind share. But their earnings were flat. Most analysts misunderstood the long term potential of the strategy they were taking.
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@GadSaad
I'm just surprised that people take what a terrorist group of thugs says at face value.
Even without any detailed analysis (of photos etc) it seemed very obvious yesterday that this was not an Israeli attack. If you consider the incentives of each side, as well as the
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Well. Some not-so-great personal news:
I broke my wrist badly last night playing basketball. Taking it very easy and will evaluate what I’m capable of as days go on.
I still hope to make some $LMND video content around Q3, but if I’m even able to it will be less edited.
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$LMND 🍋 Q2 2024 Earnings Letter is Up!
I will post more thoughts in this thread.
79% Gross Loss Ratio!!
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I think 2026/2027 is going to be wild for $LMND. I have between now and when the market figures this out to accumulate shares. 🍋
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Honestly, probably next to no one was buying a Tesla with Bitcoin. So in a practical and operational sense, nothing really has changed. Tesla still owns it, and still no one is buying cars with it. 🤷🏻♂️
$BTC $TSLA
@WholeMarsBlog
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This makes sense imo.
✅Elon can still drive master vision
✅Lex can assemble eng team & execute
✅Removes Elon as face to blame for any Twitter complainers
✅Way less noise
✅Elon can spread attention more evenly across his companies
✅Lex is likeable and politically neutral
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In my recent interview with $LMND 🍋 CEO
@daschreiber
he gave me great kudos that my predictions for 2023 were closer than their initial guidance. See timestamped link to that statement here:
My prediction video from one year ago that he references is
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My favourite line item:
“ … expect our existing capital to suffice until we’re profitable.”
🍋 $LMND 📈🔥
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The fact that Lemonade holds such extremely positive reviews (no matter where you check) is a strong signal. $LMND 🍋
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So the sentiment in $LMND 🍋 land is bad right now. BUT, the good news is that even though the stock price has fallen the fundamentals are GREAT.
Opex is flat. IFP, revenue, gross profit continue to climb, losses are shrinking and the path to profitability is ever clearer.
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How can you quickly quantify the opportunity for $LMND? Check out this math:
IFP Now = $800M
Loss Ratio = 75%
IFP Growth Rate = 30%
OpEx Now = $400M
OpEx Growth Rate = 5%
Market Cap Now = $1.2B
Operating profit y in x years would be:
y(x)=$800 (1-0.75)*1.30^(x)-$400*1.05^(x)
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Remember when $LMND 🍋 was trading at $16 after 5x’ing its IFP since their IPO and being on a clear path to profitability? Yeah, I remember that.
I bought more today ✅
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Legacy insurers literally can't compete with
@Lemonade_Inc
in the renters insurance market (or any other niche/smaller premium market) cause they don't have the efficiency of administration. $LMND is about half the cost as the next 4 best options for the same coverage and has
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$LMND 🍋 is up nearly 20% today as it’s tied in with $GME and other heavily shorted stocks being squeezed. Get your popcorn ready.
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The first things I’ll check in $LMND 🍋 Q4 letter will be:
✅ Loss ratio (>80% bad, 75-79% good, <75% great)
✅ IFP (<$730M bad, $730-$745M good, >$745M great)
✅ Adjusted EBITDA (<-$40M bad, -$39M to -$35M good, > -$34M great)
✅ 2024 Guidance (IFP growth of more or less than
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The doctors were surprised though when he came out like this:
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Some comparisons closer to their respective IPO dates:
Tesla Q2 2011 vs Rivian Q4 2021
(soon after IPO)
Auto Rev:
$39M vs $54M
Auto Gross Margin:
22% vs -709%
OpEx:
$77M vs $2,071M
Net Loss:
$59M vs $2,461M
$TSLA vs $RIVN
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Google Trend for "Lemonade Insurance" in the US is at an all-time high.
The last 4 June months were:
2023: 100%
2022: 76%
2021: 61%
2020: 79% (around IPO)
$LMND 🍋
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BREAKING: $LMND 🍋 Q4 results:
✅ Loss ratio of 77%
✅ IFP of $747M
✅ Adjusted EBITDA of -$28.9M!
✅ 2024 Guidance of $942M IFP and Adjusted EBITDA loss of -$155M
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Very smart move by Hertz to purchase Teslas and invest in EV infrastructure.
They’re setting themselves up to be robotaxi operators at scale. Listen to this from their CEO 👇 $TSLA $HTZZ
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NEW VIDEO IS OUT NOW:
Lemonade CEO Daniel Schreiber Interview 🍋🍋🍋
I interview the CEO of $LMND Insurance,
@daschreiber
and talk all things lemonade.
@Lemonade_Inc
➡️
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You need 3 things to solve FSD
Talent
Data
Compute
✅ Tesla is a top choice for engineers
✅ Tesla has a massive fleet of data
✅ Tesla compute is about to explode
It’s only a matter of time.
$TSLA
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$LMND had a very strong Q1. I will be doing a video tonight, but sharing some more immediate thoughts in the below thread as a I have time to 👇
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$LMND 🍋 is a rocket ship sitting quietly on the launch pad. It's only a matter of time before the market figures this out and it takes off. 🚀
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$LMND adj EBITDA of -51.7M for Q4 after guidance of -65M to -62M. This is the trend we want to see. 🍋
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$LMND 🍋 has about 1600 customers/employee while other insurers tend to have about 150 to 450.
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To make a radical product change, it must be more compelling than the state quo. Tesla did this with EVs over gas vehicles.
F150 lightning is arguably equal to or worse than its gas counterpart, so how do they expect customers to switch to it en masse?
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My interview with Daniel is up!
I had the pleasure of interviewing
@Lemonade_Inc
's CEO and co-founder
@daschreiber
. We discussed investors' most pressing questions and the future of $LMND 🍋. It's a packed 1hr 9min. Thanks again Daniel!
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Well, we've been driving our Tesla Model Y for a few weeks now and while it's absolutely incredible, puts a smile on your face just driving it, and basically a spaceship on wheels, I did notice that one panel gap is 1mm out of tolerance and now I'm furious. What a terrible car.
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@AlbertBridgeCap
Cell industry is a good example⤵️
• Before iPhone: many brands, many models, little differentiation
• After iPhone: AAPL dominates & takes vast majority of the profits w/ just a few models. Many other smartphone models in the market, but little profit
TSLA = the AAPL of Auto
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$LMND Car is now in Washington. It’s 7th state. 🍋
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$LMND 🍋is handling over 30% of customer email tickets automatically with generative AI. Three months ago it was 20% and the quarter before that it was 7%. Customer rating or satisfaction or success appears to be 4.3/5.
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@garyblack00
Hey Gary, it's not a money making investment for him. He bought purely as an avenue for protecting free speech now and into the future.
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There are 3 main concerns for $LMND
1. Loss ratio is too high
2. Customer churn is too high
3. Operating costs are (you guessed it)…too high
If they don't improve, it'll go bankrupt. But if they do, the upside is enormous. Let’s look into why all 3 *should* improve over time👇
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When house prices are falling, it's called a "buyer's market". It's a positive thing for those looking to buy.
An overall bear market is the same thing. It's a positive thing for long-term investors, as you can buy more of your favourite companies, for less.
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"Connecting the dots, the picture that emerges is of a business that is adding customers faster, with each customer paying more, resulting in an expanding business and increasing efficiencies." $LMND Q3 🍋
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$LMND Q1 results are in 🍋
✅IFP of $653M vs guidance of $636M
✅Adj ebitda of -$50.8M vs guidance of -$64M
Great quarter. Guidance was/is sandbagged.
Stock is up 15% after hours.
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Just editing video now. This quarter has got me excited. Continued execution and accelerating timelines. Buckle up.
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And we’re up a mere 8.5% today 💪🍋$LMND
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$LMND Car is going to be HUGE. 🍋
LTV10 is now live - bringing enhanced Car loss prediction, inflation adjustments, a new data pipeline to handle massive telematics data, and much more.
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$LMND customer churn from 12 months prior. This is a very encouraging trend. 📉 🍋
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Excellent Q1 🍋
highlights of
@Lemonade_Inc
's Q1 2024 results:
🚨 Acceleration Alert: Expecting net cash flow breakeven by EOY '24!
✅ Top line: At $794 million
✅ Revenue grew by 25%, while OpEx remained almost flat (at +2%) Y/Y
✅ Loss Ratio down 8% Y/Y to 79%
✅ Gross Profit climbed 110% Y/Y
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In a recent interview Daniel said $LMND 🍋 has "2 and a quarter million or so customers".
If we assume a linear growth of customers through this quarter, we will end Q3 at about 2.336M customers. A net change of 168k customers! This would be the highest customer growth
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Incredible FSD maneuver:
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End of February will be ~2 years of mostly horizontal trading for $LMND 🍋. You know what they say ... the longer the base the bigger the breakout.
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Some quick and dirty 2030 math:
If they sell 1500 GWh of storage
= 384k Megapacks (@ 3.9 MWh/pack)
If they sell at $2M/pack
= $768B in rev
If op margin is 10% and PE is 10 on this part of business (these are just a guess at this point)
= $768B in market cap from energy storage
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90% of
@Lemonade_Inc
’s customers are first time insurance buyers. Wow.
What an incredible stat. 🍋 $LMND
(at least this was true a few years ago and is likely still similar now)
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Second $LMND investor day is scheduled:
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