Tesla, Inc. ($TSLA) Earnings (Q3 FY22)

 Tesla, Inc. ($TSLA) Earnings and Opinion:


Tesla is a company in the Consumer Cyclical sector and operates in the Auto Manufacturers industry. The company designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems in the United States, china, and internationally. Tesla was incorporated in 2003 and is currently headquartered in Austin, Texas. The company made its debut on the stock market in 2010.

Tesla Earnings Forecast:

  • Revenue of $21.45B missing expectations of $22.05B
  • Total Deliveries of 343,830 missing expectations of 357,937
  • Gross Margin of 25.1% missing expectations of 26.58%
  • Adj Diluted EPS of $1.05 beating expectations of $1.01
Opinion:
Tesla has been pretty volatile since its earnings came out on Wednesday. The stock saw a pretty choppy session on Thursday. However, they bounced back from all the negative sentiment right after the earnings report. Tesla showed that it isn't immune from all the economic challenges. The company saw some trouble with delivering vehicles (getting cars from factory to customer). The profits were hurt a little bit with the rising in shipping costs. The good news is that all plants are fully running now, and production looks to keep boosting, heading into the end of the year. Tesla saw 22,000 cars it produced, not be delivered in this quarter. The CFO warned that this could happen again in Q4, however, that it wouldn't be as drastic as this. The company does need to ramp up production in the last quarter to meet Elon's goal of producing 1.5 million cars this year. Elon shows a lot of promise in this company and is betting that it will, one day, be the largest company in the world (by market cap). Diving deeper into the earnings, we can see that revenue missed. EPS (adjusted) was a beat, but it didn't represent the overall profitability. Margins became slimmer this quarter with rising costs to produce these vehicles in Berlin and Austin. The FCF metric looked really nice, with a 24% beat on its expectations. Looking a little bit deeper into valuation, the company has always been relatively overvalued. It has come down a little bit this year, with the drop in the market. However, in terms of reality, it is still crazily overvalued. The EV/EBITDA is at 39.25, which is way above the median of 2.55. The P/E ratio is at 63.33 ,which is also way above the median of 6.57. You get the point, Tesla has some really high values in valuation metrics. In my opinion, I bought into the hype. I have faith in Tesla, just because I believe in their leader and what he can do. The business model does have a promising outlook too. With semi-truck deliveries happening at the end of this year, and the Cybertruck starting production in the middle of next year. We have seen plenty of problems with the new wave of EV, however, I think Tesla has done a mighty fine job of taking care of business. I am long Tesla $TSLA.


*Information from Bloomberg and Yahoo Finance 

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