Tesla Q3: Assessing Elon Musk's Execution Ability Objectively

Oct. 20, 2022 10:47 PM ETTesla, Inc. (TSLA)F, GM23 Comments

Summary

  • Elon Musk never fails to pull his PR stunts, and this Q3 earnings report is no exception.
  • The Tesla thesis, to a large degree, is a Musk thesis. Bears and bulls seem to disagree more fiercely on him than anything else.
  • After reviewing financial data objectively, I found it hard to argue against his execution ability.
  • He not only met 11 of the 12 tranches (mostly growth-oriented), but also improved Tesla’s profitability, efficiency, and capital structure significantly.
  • There are certain risks associated with Musk, but overall I see him as a highly effective CEO and a positive catalyst for the Tesla thesis.
  • Looking for a helping hand in the market? Members of Envision Early Retirement get exclusive ideas and guidance to navigate any climate. Learn More »

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Theo Wargo

The investment thesis

The Tesla (NASDAQ:TSLA) thesis, to a large degree, is an Elon Musk thesis. The man and the company are inseparable. TSLA bears and bulls disagree more fiercely on Elon Musk than anything else. In the comment section of

Chart: Tesla (<a href='https://seekingalpha.com/symbol/TSLA' title='Tesla, Inc.'>TSLA</a>) financial metrics

Source: author and Seeking Alpha data.

Chart: Tesla (<a href='https://seekingalpha.com/symbol/TSLA' title='Tesla, Inc.'>TSLA</a>) financial metrics

Source: author and Seeking Alpha data.

Chart: Tesla (<a href='https://seekingalpha.com/symbol/TSLA' title='Tesla, Inc.'>TSLA</a>) financial metrics

Source: author and Seeking Alpha data.

Table: Tesla (<a href='https://seekingalpha.com/symbol/TSLA' title='Tesla, Inc.'>TSLA</a>) balance sheet

Source: author and Seeking Alpha data.

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This article was written by

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** Disclosure: I am associated with Sensor Unlimited.

** Master of Science, 2004, Stanford University, Stanford, CA 

Department of Management Science and Engineering, with concentration in quantitative investment 

** PhD,  2006, Stanford University, Stanford, CA 

Department of Mechanical Engineering, with concentration in  advanced and renewable energy solutions

** 15 years of investment management experiences 

Since 2006, have been actively analyzing stocks and the overall market, managing various portfolios and accounts and providing investment counseling to many relatives and friends.

** Diverse background and holistic approach 

Combined with Sensor Unlimited, we provide more than 3 decades of hands-on experience in high-tech R&D and consulting, housing market, credit market, and actual portfolio management. We monitor several asset classes for tactical opportunities. Examples include less-covered stocks ideas (such as our past holdings like CRUS and FL), the credit and REIT market, short-term and long-term bond trade opportunities, and gold-silver trade opportunities. 

I also take a holistic view and watch out on aspects (both dangers and opportunities) often neglected – such as tax considerations (always a large chunk of return), fitness with the rest of holdings (no holding is good or bad until it is examined under the context of what we already hold), and allocation across asset classes.

Above all, like many SA readers and writers, I am a curious investor – I look forward to constantly learn, re-learn, and de-learn with this wonderful community.

Disclosure: I/we have a beneficial long position in the shares of F either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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