I'm sure the shorts understand what they are doing.
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I'm sure the shorts understand what they are doing.
bdy0627
Active Member
Yet another way to look at it is that Apple's brightest days are behind it in terms of its actual products relative to the competition. It's future is quite possibly not looking nearly as bright as it's past so the forward-looking market is pricing that in. The story-stock is now a big, slow company so it has lost a lot of its luster even though it has gobs of money. Isn't this also what we have seen with traditional auto companies?Another way to see it is that this potentially means that even after Tesla's success becomes obvious, maybe by the 5th GGF, there will still be another decade of double digits PPS growth.
bdy0627
Active Member
Wow, an analyst report that actually makes a ton of sense.
bdy0627
Active Member
I think TSLA is looking for a green day today. We will likely see capping by shorts to try to keep it under 334. We'll see how much firepower they have at this point.
this should help the macros for today: U.S. jobless claims fall to near five-month low
"The number of Americans filing for unemployment benefits fell more than expected last week, touching its lowest level in nearly five months, suggesting another month of strong job growth"
"The number of Americans filing for unemployment benefits fell more than expected last week, touching its lowest level in nearly five months, suggesting another month of strong job growth"
I think Gene Munster and Andrea James understand Tesla well. If an analyst doesn't have a long term view, it's difficult to value the company.
Welcome to Tesla Itay Michaeli...reasonable Citi analyst and top quartile of analyst rankings, thank you for your well thought out contribution.
Reciprocity
Active Member
Wow, that armature hour really works. You can just watch people on twitter react, both ways. Bulls crying that the stock should be up and Bears cheering and claiming the world is coming to an end. You would think that anyone who follows this stock knows its a great time to Just buy the Dip! Whom ever posted it, I love that video. That goes through my head every time the stock dips.
ValueAnalyst
Closed
If it breaks above $330 with strong volume, this stock can run, possibly into July 28.
I think this is a generally incorrect statement. Trading software very rarely picks a direction, most automated Trading software is just for market making, and market making is just a facilitator, not a driver of market direction.
There has been some discussion on if leverage makes sense at this point. Here are my thoughts. Not advice, just sharing ideas.
I believe for TSLA to overcome the current trading range (aprox 300 to 380), Tesla has to demonstrate "sustainable" profits and for a strong uptrend in stock price, sustainable "growing" profits.
Looking at purely financials we are about to see a series of terrible quarters.
- We all know Q2 financials are expected to be terrible. Basically worst EPS ever.
- Q3: Musk said in previous calls that at low volumes Model 3 will have negative gross margins. That will be on top of growing operating costs (SG&A and R&D) and potentially growing interest expenses. So Q3 financials will be even worse than Q2. Thus yet another worst EPS ever.
- Q4: We had some analyst notes saying that Management is hoping for a positive gross margins on M3 for Q4. I read that as aiming for break even gross margin. This I believe is with the assumption that the ramp goes as expected (reaching 5K/week run rate in Dec). Tesla almost always misses timelines at least by a bit. So whether there will be break even gross margin or not is up in the air. Even then OpEx and other stuff will keep growing. In all likelihood Q4 will also be terrible. There is a good chance that Q4 will be worse than Q3 in terms of EPS. Potentially recording one more worst ever.
2018 Q1 is probably where we will find ultimate relief in financials. The ER for that would be in early May 2018. Up until then I feel like the stock price will be highly speculative.
Obviously the company has a very promising future. That's why the valuation is where it is. But for TSLA to make substantial gains beyond that, I believe Tesla will have to show proof of execution through financials. In other words, the present valuation is all about promise. But here on out it will be more about execution. Show solid volumes, show healthy margins. Then there will be ever more belief in the next round of projects (Semi, Y, AD, etc.).
Considering all this I am inclined to not carry any leverage at all for the next several quarters. On the other hand, except my 401K, every last dollar is invested in TSLA. So I am not worried about missing any upside. Just talking about leverage, I don't believe the risk is worth the reward.
I believe for TSLA to overcome the current trading range (aprox 300 to 380), Tesla has to demonstrate "sustainable" profits and for a strong uptrend in stock price, sustainable "growing" profits.
Looking at purely financials we are about to see a series of terrible quarters.
- We all know Q2 financials are expected to be terrible. Basically worst EPS ever.
- Q3: Musk said in previous calls that at low volumes Model 3 will have negative gross margins. That will be on top of growing operating costs (SG&A and R&D) and potentially growing interest expenses. So Q3 financials will be even worse than Q2. Thus yet another worst EPS ever.
- Q4: We had some analyst notes saying that Management is hoping for a positive gross margins on M3 for Q4. I read that as aiming for break even gross margin. This I believe is with the assumption that the ramp goes as expected (reaching 5K/week run rate in Dec). Tesla almost always misses timelines at least by a bit. So whether there will be break even gross margin or not is up in the air. Even then OpEx and other stuff will keep growing. In all likelihood Q4 will also be terrible. There is a good chance that Q4 will be worse than Q3 in terms of EPS. Potentially recording one more worst ever.
2018 Q1 is probably where we will find ultimate relief in financials. The ER for that would be in early May 2018. Up until then I feel like the stock price will be highly speculative.
Obviously the company has a very promising future. That's why the valuation is where it is. But for TSLA to make substantial gains beyond that, I believe Tesla will have to show proof of execution through financials. In other words, the present valuation is all about promise. But here on out it will be more about execution. Show solid volumes, show healthy margins. Then there will be ever more belief in the next round of projects (Semi, Y, AD, etc.).
Considering all this I am inclined to not carry any leverage at all for the next several quarters. On the other hand, except my 401K, every last dollar is invested in TSLA. So I am not worried about missing any upside. Just talking about leverage, I don't believe the risk is worth the reward.
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jhm
Well-Known Member
I agree. That said, I have ended up slightly leveraged in the form of out-of-the-money puts which I expect to expire. If they execute, I end up slightly leveraged in the form of an actual margin loan, which I will promptly close by selling other (non-TSLA) stock.
bdy0627
Active Member
Great post! In my opinion, this is a very reasonable assessment of the next 9 months. It is likely that in 2 years, accumulation at the current stock price turns out to be a great idea. On the other hand, it is certainly possible that there is a much better price point to add shares and/or leverage in the coming months, particularly the next 4 months. If Tesla succeeds on their FSD planned for December of this year, I believe that will have a huge effect. Of course, that could easily slip by several months.
My approach at this point has been to remain moderately leveraged through M3 reveal and then back off to shares. That has turned out to be a great plan until early July. Bears will definitely be pointing to the Q2 and Q3 financials in support of their argument that Tesla isn't going to make any money, which may well drive the stock price down. Q4 may well be bad too. Of course, public sentiment may be very high on the M3 and that may ultimately affect the market. Hard to say.
I believe that's the Batman syndrome, die the hero or live long enough to become the villan.....
bdy0627
Active Member
bdy0627
Active Member
I've been reading some of the posts on the AP2.0 thread. Sounds like it is still not to parity with AP1, now 8+ months after release. It is way behind schedule. There has to be serious doubt about Musk's timeline for FSD in just 5 months. Hopefully, AP2 will be better than AP1 by then, but ready for a FSD coast to coast trip???? I'm not going to bet on that.
This might be on a case by case basis. I test drove a AP hardware 2 Model X a month back. Compared to the AP hardware 1 Model X I test drove in November, they felt to be on the same level. This is just my experience test driving cars 6 months apart. It's possible AP1 hardware made progress between November and June.
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