Seeking Alpha

Tesla Motors Q2 earnings: What to watch

  • Analysts expect the Tesla Motors (TSLA -3.4%) to report a loss of $0.20 per share and $384.4M in revenue.
  • An update on production will be closely scrutinized. Last month, CEO Elon Musk said a run rate of 400 cars a week was a "walk in the park," but Tesla's share price appears to be already factoring in mass production in the near future.
  • Musk is likely to face some question on the potential impact of rule changes with ZEV credits. It's a good bet the exec will also brush aside any concerns over BMW's entry into the EV market.
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Comments (31)
  • Tales From The Future
    , contributor
    Comments (5787) | Send Message
     
    "Tesla's share price appears to be already factoring in mass production in the near future."

     

    Exactly, it doesn't matter to me with stock price at 140+$ if the 2013 production is 21k, 25, or 30k of the Model S.

     

    The current valuation prices in 100-200k units of a Gen III car - notably a car no outside investor has ever seen and with only rumored specs - that is 4 years away (remember Model X was also shifted back one year, there may be additional delays).

     

    There is no rational valuation, only future expectations about EVs in the mass market and a wildly successful Gen III car from TSLA.
    7 Aug 2013, 10:10 AM Reply Like
  • Esekla
    , contributor
    Comments (3675) | Send Message
     
    Agreed, from a valuation perspective it doesn't even matter any more how well the Model S sells. However, it will be interesting to see the actual sales #s of from a market demand perspective. Those should come in around 13K vehicles sold so far this year, or well over 5K in the most recent quarter. Tesla has no direct competition at the moment, but it is surely coming: http://bit.ly/18aMSed

     

    Tesla needs to wow now or one has to wonder how they will manage in years come when Toyota leverages its lead in battery research, or liquid nitrogen energy storage replaces vehicle batteries altogether.
    7 Aug 2013, 02:13 PM Reply Like
  • Agnes59
    , contributor
    Comments (408) | Send Message
     
    @Esekla: Tsla is Wowing the Analyst now. They just posted .20 profit against .17cent loss bet that was a shocker huh? I have no doubt in my mind ...Tsla will do just fine....Go Tsla!
    7 Aug 2013, 05:33 PM Reply Like
  • Esekla
    , contributor
    Comments (3675) | Send Message
     
    Well, non-gaap #s typically only wow retail investors. Analysts tend to dig deeper. For my part, I'm happy that the sales #s were in-line and just hope they can bring costs down for future models.
    7 Aug 2013, 05:44 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5790) | Send Message
     
    I expect a pullback in (TSLA). A decent valuation would be a good buying opportunity. This company won't die.
    7 Aug 2013, 10:16 AM Reply Like
  • Tales From The Future
    , contributor
    Comments (5787) | Send Message
     
    Agreed, there don't have to be extreme outcomes. I also separate company and stock. Even a great company can be over-valued. Lately the exuberance in TSLA has been off the charts with a market cap over 16bn.

     

    I will buy TSLA again at 50-60$ (one can ridicule me given recent stock prices that it may never come back to these levels, I'm patient).

     

    For now, I'm short.
    7 Aug 2013, 10:19 AM Reply Like
  • Alexander-the-Great
    , contributor
    Comments (36) | Send Message
     
    Your right Michael, the company will not die. It will only grow in the future.
    7 Aug 2013, 11:51 AM Reply Like
  • EatMyVoltage
    , contributor
    Comments (66) | Send Message
     
    Good idea to short a company that with it's second offering, produces a vehicle that is better than anything Mercedes, BMW or Audi have ever produced. Of course they weren't really trying before. Now that Tesla has done it, it will be easy for the big automakers to produce a better car.
    7 Aug 2013, 01:17 PM Reply Like
  • EatMyVoltage
    , contributor
    Comments (66) | Send Message
     
    You must be having a good day :)
    7 Aug 2013, 04:17 PM Reply Like
  • wigit5
    , contributor
    Comments (4218) | Send Message
     
    Should make for an interesting call; all I know is if anyone is able to create an EV car that charges to near full in sub 30 minutes (90% capacity) and can go 300+ miles on that charge ICE's could become the niche very quickly.

     

    I always like the idea of turning our roads into solar panels and having our EVs charge through the connection of the road to the 'tires'.

     

    http://bit.ly/1cbI8uG
    7 Aug 2013, 10:18 AM Reply Like
  • ursf
    , contributor
    Comments (162) | Send Message
     
    @tftf ............ which is all good enough for me and many more forward looking investors. Not everything in life and not everything in Wall Street is based on "rational valuation" only. After having made 150% return in three months on a long term investment in TSLA shares, I would even be willing to wait a few years for the "rational" value to catch up with the "emotional" value. That is, of course, because I believe in Elon Musk's vision, work and already achieved "impossible" feats. And the number of people around the world taking notice of EM and his achievements is growing exponentially.
    Also, don't forget that the number of additional purely emotional (for the moment) factors is very open. Just throw in "pick-up truck", to mention but one. While I think the share price will develop in a choppy way, this story will continuously be fed by "emotional" elements which will keep bolstering the share price. It may continue to be a few years behind rational valuation but it will be hard to catch up if you are chasing this share. And yes, at some point in the future (3 years, 5 years, 10 years?, anyone's guess today) the appl will drop from 700 feet to 400 feet..... But that is something I will start worrying about much later.
    7 Aug 2013, 10:29 AM Reply Like
  • wigit5
    , contributor
    Comments (4218) | Send Message
     
    an EV pickup is a terrible idea.
    7 Aug 2013, 10:41 AM Reply Like
  • Sellinpanic
    , contributor
    Comments (691) | Send Message
     
    Precisely. From my viewpoint I have a huge chunk of my portfolio anchored at an average price of 66$ with TSLA so if tftf is correct, we'll meet there. Otherwise I'll hold tightly on TSLA shares for at least 3-5 years out and see what the future brings, hopefully bigger gains than so far.
    7 Aug 2013, 10:46 AM Reply Like
  • Alexander-the-Great
    , contributor
    Comments (36) | Send Message
     
    EV Pickup is a great idea. Elon also said he will sell every type of vehicle. Pickup, Convertible, sportscar, etc...

     

    I need a small pickup. I do work in the city and parking is a problem. Smaller sized vehicles are helpful.
    7 Aug 2013, 12:08 PM Reply Like
  • Water Brothers Financial Co...
    , contributor
    Comments (379) | Send Message
     
    your naivete is perfect in understanding how bull markets create fantasies and how they come down so hard, so quick . They won't warn you three years before this stock tumbles; you are competing with thousands of other players who will all sell the instant reality hits. You are designing pick-up trucks for them like it was a lego game not a billion dollar business needing designers, spec. engineers, environmental engineers, test tracks, manufacturing plants, financing, marketing. It took Elon twelve years to get a car out there - and one that loses him about 20,000 a unit. You will be able to buy this stock at 25 again, except you won't want it.
    7 Aug 2013, 12:23 PM Reply Like
  • Tales From The Future
    , contributor
    Comments (5787) | Send Message
     
    @ursf: "After having made 150% return in three months on a long term investment in TSLA shares,"

     

    Congratulations to you.

     

    In your position, I would have sold out 90% of my position at 140+$ and kept the rest for fun. How much upside is left at these prices ?

     

    PS: Again, I wouldn't compare AAPL with TSLA. First, AAPL could/can outsource and scale its manufacturing and ramp up millions of units within months, TSLA can't. Second, AAPL can produce/resell digital goods with no inventory or mft. costs. Third, TSLA (as all car manufacturers) has huge upfront investment and personnel costs, quite different markets.
    Taking your pick-up truck example, it may take *years* for TSLA to design and build one.
    7 Aug 2013, 12:58 PM Reply Like
  • ursf
    , contributor
    Comments (162) | Send Message
     
    Who looks naive today, mysterywriter? And I did not say that "they will warn me three years before this stock tumbles". Of course there is a huge risk in trying to time this right and one may take a loss with a timing error for this stock. Just like most of the short bets have taken huge losses so far. All I said is the there is still enough potential of additional "emotional" factors which will help this stock to grow until we reach the saturation point at which it will take a relative dive. But given my luckily low entrance level, I will start worrying about that once the stock surpasses $300. And I like to repeat: Rationals are good. But they are not the only thing which drives valuation. I will let you know once I will naively drive my new Model S-85 which I will have earned based on my naive assumptions. (Spoiler alert: I am about 8% in stock price away from that goal, after today's 15%+ increase.)
    8 Aug 2013, 03:05 PM Reply Like
  • JPBark
    , contributor
    Comments (167) | Send Message
     
    What happens if the street is wrong on the $0.20 per share loss, what if it is a $0.10 per share profit?
    7 Aug 2013, 10:47 AM Reply Like
  • wigit5
    , contributor
    Comments (4218) | Send Message
     
    the stock will go up? I would venture to guess though that the commentary will be more important then the numbers... if numbers mattered the stock wouldn't be above 100$
    7 Aug 2013, 11:00 AM Reply Like
  • Mark T. Phillips
    , contributor
    Comments (578) | Send Message
     
    That's anyone's guess JPBark... Since so much of TSLA's valuation is based on future expectations, current earnings won't matter as much. I think a lot of focus will be on operating margin, production numbers, expected demand, etc.

     

    I expect TSLA to beat on guidance but it's anyone guess how the market will react given how much of optimism there is already baked into the share price.
    7 Aug 2013, 11:07 AM Reply Like
  • Alexander-the-Great
    , contributor
    Comments (36) | Send Message
     
    If there is no future, then why own the stock? or any stock? Can Elon produce for the future? If he can then the stock has a future. Just like our own lives we live for the future, not for today. And we live for a purpose.

     

    Yes a Purpose Driven Life. Tesla has a purpose.
    7 Aug 2013, 12:12 PM Reply Like
  • Agnes59
    , contributor
    Comments (408) | Send Message
     
    @Alexander-the-great: Excellent Summation. I may add, everyone here was born with a purpose. Elon has a purpose of Nikola's vision come to life. And yes they made a profit as well.
    7 Aug 2013, 05:47 PM Reply Like
  • palmharbor11
    , contributor
    Comment (1) | Send Message
     
    These emails are always AFTER the fact of a nose dive in the price of TESLA.
    As an owner...I would like an email BEFORE the market to say:
    Simply: for reasons A, B.C D, we expect TESLA to take a dive
    of X or Y.
    No esoteric information AFTER ITS TAKE A DIVE.
    7 Aug 2013, 02:39 PM Reply Like
  • MoreInfoPlease
    , contributor
    Comment (1) | Send Message
     
    Tesla doubled production of the Model S from 400 to 800 and is still back ordered. I'm expecting an adjustment to expected units sold during the call and a subsequent adjustment to expected revenue for the year etc. The ZEV stuff won't actually happen till October and won't go away completely so there will still be that revenue stream to add to increased sales. As for the drop today I expect it's people happily taking profit from record highs before the inherent risk of an earnings call. Good for them, that's just smart investing. For their sakes, though, hopefully they only shave their positions as earnings seems way more likely to do good things for the stock than bad or mediocre.
    7 Aug 2013, 02:40 PM Reply Like
  • wigit5
    , contributor
    Comments (4218) | Send Message
     
    You can order a model S today and get it in less than 8 weeks, I'm not sure you can call that back ordered. You are getting a custom made vehicle ask any other car brand to custom make your vehicle and it'll probably take that long to get it...
    7 Aug 2013, 03:21 PM Reply Like
  • dugnology
    , contributor
    Comments (34) | Send Message
     
    I would like to "punch myself in the face" for selling at $68 and only getting a 2.5 bagger. I will have to remember to sell off only my initial investment and let the rest ride. I have been waiting for the pullback, and when it comes, I hope I recognize it. Look at Green Mountain Coffee.
    7 Aug 2013, 02:52 PM Reply Like
  • PeterJA
    , contributor
    Comments (3668) | Send Message
     
    The pullback just came today. Sounds like you didn't recognize it, but you still have an hour.
    7 Aug 2013, 03:05 PM Reply Like
  • BigJ1260
    , contributor
    Comments (206) | Send Message
     
    came in at $405M vs $383M Est - and blew away EPS at $0.20c vs (0.17c) Est.

     

    Key will be commentary on margins and how Rebates effected EPS this qtr- and fcst for next Qtr and Europe
    7 Aug 2013, 04:11 PM Reply Like
  • Esekla
    , contributor
    Comments (3675) | Send Message
     
    Pretty much everything in-line with expectations. I was hoping for a little more in terms of vehicles sold, but they are still on-track with their overall plan.
    7 Aug 2013, 04:12 PM Reply Like
  • ThetaDecay
    , contributor
    Comments (107) | Send Message
     
    Beat on revenue and surprised with better gross margins.

     

    Margins expansion --> multiple expansion
    7 Aug 2013, 04:38 PM Reply Like
  • Esekla
    , contributor
    Comments (3675) | Send Message
     
    I'm not sure why the gross margins are really a surprise, but I certainly hope you're right, and that the 26 cent GAAP loss becomes a profit soon.
    7 Aug 2013, 04:44 PM Reply Like
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