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Discussion in 'TSLA Investor Discussions' started by DougH, Feb 11, 2016.
Tesla Reports Fourth Quarter Loss of $320 Million | Inc.com
You are missing the overall picture. Risk to tesla is running out of cash before getting model 3 out. What we heard last night is that they won't. There is no need to raise cash, will be cash positive while completing giga factory ramping up model X production and developing model 3/ tesla energy. They are unstoppable now. Last years loss was incurred by building up stores/dealerships/superchargers/increased manufacturing capabilities and world wide expansion. So tell us what did you accomplish last year?
You can try and sugarcoat it but it's not a great report. The good news is that it's not a terrible report and the projected Model S 2016 sales numbers are very good.
You need to put it in the context. The loss is because Tesla spent a lot of money for R&D and Capex so it can grow into a much larger company in the future. Should Tesla stop here and only make S and X they will actually be generating a lot of profit. The product magin of S is among the highest in the industry and X will be reaching that point too according to Elon.
Of course but continuing missed estimates further erodes shareholder confidence. I think the glue here is the analysts trust Elon. Not sure how long that trust will last.
Which estimates did they miss? Feel free to elaborate which ones and whatever miss matters for the long term.
My confidence in them increased significantly after this report.
My confidence increased because of Wheeler. My hope is that he can stand up to EM, when needed. He has a path to not having to go back to the credit markets.....IMO, THAT is the reason that TSLA stabilized....The market would have punished TM/TSLA severely if there was a hint that they would need to raise more money in this macro environment.
Here's what I was referring to:
Earnings: Losses widened at Tesla Motors (NASDAQ:TSLA) as the firm reported adjusted loss of ($0.87) per share. Analysts have said that they expected Tesla to report earnings of $0.12 per share – but it is glaring that profits were elusive for the electric vehicle maker once more in Q4 2015. Tesla missed estimates by a massive 833% and it marked a 569% drop from a loss of $0.13 in the year-ago quarter
Revenue: The firm also showed weakness on the revenue front as it posted revenue of $1.75B below the consensus estimate of $1.80B in revenue. The firm missed revenue expectations by 2.8% but revenue was up 59% on a year-over-year basis
Not really. The entire R&D budget is $190m, and Capex depreciation is $143m ($333m). So that's pretty much the loss right there, but it doesn't tell the whole picture.
One big issue is that they have $124m of income that they had to defer due to lease accounting. This is already money they have in their bank account, they can spend it, but they can't count it as income for this quarter. It's a stupid way of accounting for Tesla. I guess that flipside is if Tesla has 0 sales for the next 3 years, they'll have $100m per quarter of "income" - but if Tesla has 0 sales for even a quarter they'll be bankrupt. Lease accounting works ok if you're Ford and your lifecycle is measured in decades... not so much if you're Tesla. Until Tesla stops growing rapidly for about 3 years they'll perpetually have this lease elephant on their back.
The other number you should really be concerned about is the $264m in sales, administrative & general expenses. This isn't an investment or R&D expense. It's purely operational and recurring. And that's a tad too high on $1.21b of revenue.
Stock went up despite the report. Did analysts think it would be worse?
Yeah, the increased focus on cost and cash is great. Dropping of 85KWh is one example. This is a similar story as with Google and their change of CFO.
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They don't guide for EPS so it is just analysts guesses based on very little. Same story as with Amazon.
Which number is the important one: 2.8% or 59%?
You should be looking at the "earnings" side. A miss is a miss but nice try.
Who cares what shortsighted "shareholders" think. They are welcomed to sell their stock and go buy some other companies that they have confidence with. I have absolute confidence that Elon and his team will make Tesla one of the greatest company and I'm willing to wait.
If Tesla runs out of money and needs to issue a secondary stock offering, I believe it will make a difference what stockholders think...
Tesla's investors care. In order to get to where we all want them to be they need to increase shareholder value so they will be in a position to be one of the greatest companies. I'm long and am profitable until it goes below 19 but institutional investors are purely data driven.
I don't look at quarter to quarter numbers and couldn't care less if anyone does. You could of course sell yours and take a pretty decent profit if you want to go along with the Wall Steet game. I'm not doing that though. Short term stock price variation is not of my concern because I'm holding it for a long term when I see a company that has a great potential.
That is true but nothing there indicates that they will need to do that in the near future. They actually say they will become cash flow positive this quarter and for the rest of the year. So we'll see.