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Articles/megaposts by sleepyhead
- Thread starter sleepyhead
- Start date
Oh its the most expensive brokerage fee you will ever pay. The stock was probably trading for $27 and I am sure I paid double that to get the share. I also got her a share of McDonald's so we get a check for $0.77 every quarter which is cute-annoying.
Q4 ER Exuberance
I am extremely optimistic going into Q4 ER, as I was going into Q2 and Q3. In hindsight though, there were many red flags going into Q3 ER that I simply ignored and hoped for a positive outcome. The outcome was positive as Tesla had a really good Q3, but the market just decided to penalize it for no good reason (as proven by today's stock price).
I used DaveT's model to whip up some estimates for Q4. Note that my Q2 numbers were pretty spot on, but Q3 numbers were a little too optimistic, whereas DaveT's Q3 numbers were spot on. I am expecting a lot more optimistic numbers than most, mostly because I believe that the price increases that took place in August finally worked their way in for the most part in Q4. All numbers are Non-GAAP:
Rev $740m
ZEV $10m
GM 27.3%
ASP $102.9k (very similar to Q3, since decline in Sig sales will be offset by price increase). This is excluding GHG, CAFE credits, with those it is closer to $105k.
R&D $60m
SG&A $83m
Other income $3m (positive FX)
shares diluted 139m
EPS $0.48
I admit that my scenario is probably a little bit too optimistic, but this is what I honestly believe should happen. But since the analyst consensus is half of that, I might be missing a small piece to the puzzle somewhere.
The key to this ER though will be 2014 guidance and I am very optimistic about it, in most part thanks to this article:
Tesla needs to hit these numbers to sustain its gains - The Tell - MarketWatch
From the article:
Consensus EPS $0.22
Rev $679m (will beat that by at least $50m IMO)
They need to achieve 25% GM in Q4, and...
"Similarly, anything Musk says about 2014 deliveries will be crucial. It’s the one basic metric Tesla shares with every other car company, regardless of the technology they use. Currently, analysts are looking for about 29,000 vehicle deliveries this year, though some estimates run as high as 32,000."
Seriously? Tesla is already going at a 29k run rate in Q4 and 2014 is about three things: "growth, growth, growth"
I am expecting guidance of 40k units, with 15k in US, 15k in Asia and 10k in Europe. But even 35k guidance would blow out all of the analyst's estimates, hence I am very optimistic on this ER.
Consensus 2014 EPS estimate is calling for $3.2b in sales or roughly 30k cars sold (expecting higher ASP's in China, since many will be fully loaded), while we should be getting more development revenue due to Mercedes B class, and maybe even some battery storage revenue from SCTY; maybe even some Model X revenue. But the main increase will come from high ASP China. With 35k to 40k units guided analysts will have to adjust their revenue expectations to $3.5b - $4.5b which could put more upward pressure on the stock.
On the CC 6 and half months ago Elon said that constraints will be resolved in 6 months. So the time is now and I expect an announcement that batteries are not a constraint anymore and that they are ready to run at 1000/week in a very short period of time (less than two months).
Giga Factory news will be most welcome, because it makes the Gen 3 Vaporware become a little bit more believe. If they have concrete plans in place with all partners selected then it will be a huge boost to TSLA. If they are "still working on it" then it might have a slight negative impact. Also, if they announce a need to raise a lot of capital for the factory, such as $2b, then it might cause 10% downward pressure on TSLA (of course that could be offset by 20% upwards pressure leading to a 10% gain tomorrow in this hypothetical scenario).
Overall, I am extremely optimistic going into the ER today, and have a very hard time trying to come up with a scenario that would cause the stock to fall by a significant amount. The most realistic negative scenarios that I can imagine are:
- Operating costs growing out of control, more than 25% QoQ
- Need for big capital raise
- Softening demand (I don't think it is softening, but we never really know)
- CAPEX growing out of control
- Lawsuits, recalls, design flaws or other remote possibilities that none of us are thinking of. I would give a 1% chance of something materializing in this category.
- Sell the news. This is one that worries me a bit, but if the news is great then you can't sell it. I am expecting great news, because when you preannounce good news, you always leave a bunch more good stuff for actual ER.
On the positive side we also have China and I have been saying this for 6 months now: Demand in China is HUGE! I really hope that they make a comment on this, but if they don't then you can always look at the reservation tally on the balance sheet to see if it is growing.
I have spent a good part of this trading week trying to unhedge some of my "covered" calls in order to maximize my long TSLA exposure going into this ER.
My prediction is that we see at least a 10% move in TSLA tomorrow; 70% chance it goes up past $220, 20% chance it goes below $180, 10% of something in between.
I am extremely optimistic if you haven't noticed, but it Elon and company decide to sandbag guidance or if there are some unexpected delays, then it could really hurt the stock price.
Good Luck to all!
I am extremely optimistic going into Q4 ER, as I was going into Q2 and Q3. In hindsight though, there were many red flags going into Q3 ER that I simply ignored and hoped for a positive outcome. The outcome was positive as Tesla had a really good Q3, but the market just decided to penalize it for no good reason (as proven by today's stock price).
I used DaveT's model to whip up some estimates for Q4. Note that my Q2 numbers were pretty spot on, but Q3 numbers were a little too optimistic, whereas DaveT's Q3 numbers were spot on. I am expecting a lot more optimistic numbers than most, mostly because I believe that the price increases that took place in August finally worked their way in for the most part in Q4. All numbers are Non-GAAP:
Rev $740m
ZEV $10m
GM 27.3%
ASP $102.9k (very similar to Q3, since decline in Sig sales will be offset by price increase). This is excluding GHG, CAFE credits, with those it is closer to $105k.
R&D $60m
SG&A $83m
Other income $3m (positive FX)
shares diluted 139m
EPS $0.48
I admit that my scenario is probably a little bit too optimistic, but this is what I honestly believe should happen. But since the analyst consensus is half of that, I might be missing a small piece to the puzzle somewhere.
The key to this ER though will be 2014 guidance and I am very optimistic about it, in most part thanks to this article:
Tesla needs to hit these numbers to sustain its gains - The Tell - MarketWatch
From the article:
Consensus EPS $0.22
Rev $679m (will beat that by at least $50m IMO)
They need to achieve 25% GM in Q4, and...
"Similarly, anything Musk says about 2014 deliveries will be crucial. It’s the one basic metric Tesla shares with every other car company, regardless of the technology they use. Currently, analysts are looking for about 29,000 vehicle deliveries this year, though some estimates run as high as 32,000."
Seriously? Tesla is already going at a 29k run rate in Q4 and 2014 is about three things: "growth, growth, growth"
I am expecting guidance of 40k units, with 15k in US, 15k in Asia and 10k in Europe. But even 35k guidance would blow out all of the analyst's estimates, hence I am very optimistic on this ER.
Consensus 2014 EPS estimate is calling for $3.2b in sales or roughly 30k cars sold (expecting higher ASP's in China, since many will be fully loaded), while we should be getting more development revenue due to Mercedes B class, and maybe even some battery storage revenue from SCTY; maybe even some Model X revenue. But the main increase will come from high ASP China. With 35k to 40k units guided analysts will have to adjust their revenue expectations to $3.5b - $4.5b which could put more upward pressure on the stock.
On the CC 6 and half months ago Elon said that constraints will be resolved in 6 months. So the time is now and I expect an announcement that batteries are not a constraint anymore and that they are ready to run at 1000/week in a very short period of time (less than two months).
Giga Factory news will be most welcome, because it makes the Gen 3 Vaporware become a little bit more believe. If they have concrete plans in place with all partners selected then it will be a huge boost to TSLA. If they are "still working on it" then it might have a slight negative impact. Also, if they announce a need to raise a lot of capital for the factory, such as $2b, then it might cause 10% downward pressure on TSLA (of course that could be offset by 20% upwards pressure leading to a 10% gain tomorrow in this hypothetical scenario).
Overall, I am extremely optimistic going into the ER today, and have a very hard time trying to come up with a scenario that would cause the stock to fall by a significant amount. The most realistic negative scenarios that I can imagine are:
- Operating costs growing out of control, more than 25% QoQ
- Need for big capital raise
- Softening demand (I don't think it is softening, but we never really know)
- CAPEX growing out of control
- Lawsuits, recalls, design flaws or other remote possibilities that none of us are thinking of. I would give a 1% chance of something materializing in this category.
- Sell the news. This is one that worries me a bit, but if the news is great then you can't sell it. I am expecting great news, because when you preannounce good news, you always leave a bunch more good stuff for actual ER.
On the positive side we also have China and I have been saying this for 6 months now: Demand in China is HUGE! I really hope that they make a comment on this, but if they don't then you can always look at the reservation tally on the balance sheet to see if it is growing.
I have spent a good part of this trading week trying to unhedge some of my "covered" calls in order to maximize my long TSLA exposure going into this ER.
My prediction is that we see at least a 10% move in TSLA tomorrow; 70% chance it goes up past $220, 20% chance it goes below $180, 10% of something in between.
I am extremely optimistic if you haven't noticed, but it Elon and company decide to sandbag guidance or if there are some unexpected delays, then it could really hurt the stock price.
Good Luck to all!
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Well Sleepy...you're off...by three orders of magnitude!!!!!....on your shares out. Your "other income" is interesting, too...
That is all.
Corrected. Thanks.
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Unhedged more positions with this dip to $194. I think that shorts are piling in to take advantage of a huge decline, because if it happened in Q3 it will happen again in Q4.
I really hope that the weakness today is mostly due to short sellers piling in, with a small shake-out of weak longs. I wouldn't be surprised to see a huge short squeeze in TSLA starting tomorrow. Either that or the stock will tank, I really don't see any scenario where TSLA stays around $190-$200 post ER. The moves will be big tomorrow.
Just fyi, I've heard Dougherty (Andrea James) estimate is $721.6m and EPS $0.25. I'm considering those numbers as rough "analyst expectations" since some of the lowball analyst estimates haven't been updated in months and shouldn't be considered.
If those are expectations then we will probably be relying on guidance for our catalyst(s). Even if the whisper number is 5% above those numbers I am not sure financials will catapult the price and lead to a short squeeze
ditto- many never bothered to change estimates after the 6900 cars announcement. Investors who have pitched the stock to $200 are expecting along these line imo. they'll need $.30+ to beat
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agree- strong forecast and MegaF will make or break from where we are.
TSLA Just Robbed the Shorts Again
I was thinking about the 500k car number in 2020 and did some back of the napkin calculations:
2020
350k Model E
150k Model S/X
I have heard Elon say that the Gen 3 will cost $X (where X is 30k or 35k) in today's dollars, so he will adjust for inflation if necessary.
In 2020 the base price will be $40k (or more) for the base bare bones model due to inflation (stocks go up due to inflation as well and people always forget that variable).
The longer range model, which a lot more than half will be buying, base price will be $50k. P version at $65k base and you have an ASP with option take of at least $60k per car. And the Model S/X an avg. ASP of $120k.
350k*$60=$21b in revenue
150k*$120=$18b in revenue
And then I would bet another $5b or more from battery storage. Quite possibly some revenue from used cars and you have:
$50b in sales in 2020. 25% gross margin (lower margins for Model E of about 20%, will be offset by higher margins on battery storage devices) and 10% net margin, you are looking at $5b in earnings in 2020. $30 EPS and a high end 50x PE would give TSLA a $1500 share price. A modest 30x PE and you are still at $900.
This is what I would take as the base case scenario if everything goes as planned without any monumental setbacks, which are a real risk to a growing company. I am sure that there will be plenty of setbacks. Lets just hope that none of them are big.
If TSLA has to delay plans for 2-3 years then we might see a $500 - $800 share price in 2020 at best. If TSLA fails then obviously it will be trading in the teens or double digits at best.
But if Tesla exceeds expectations and does 700k cars in 2020 or even more as per JB's presentation at Stanford, then we might see $65b in revenues or more and a $2000 share price if done without any major share dilution.
They really pulled it off not to dilute shareholders this time around and yet raised twice as much money as in May. Just spectacular!
This is truly a huge victory for TSLA longs today, and the shorts might start running for the hills tomorrow.
I wouldn't be surprised to see Adam Jonas revise his numbers to reflect the 500k cars in 2020 vs. 371k that he used to come up with $320 price target. He might not do it tomorrow, but he might throw a hint that he will have to revise his price target in the near future. And then raise PT later. Or he could come out tomorrow with a revised $360 price target.
I heard Ben Kallo on CNBC today and he was pleasantly surprised at the low $5b price tag. I think that a lot of happy analysts are going to come out in praise of TSLA tomorrow.
Great news on the Gigafactory announcement today. A lot better than I (or for that matter anyone else, especially Kass) expected. I was thinking 7% dilution, but as it stands if they do a 30% conversion premium and the stock closes at a modest $260 tomorrow then we are looking at a $338 conversion price. So at best you will need to issue 5.5m shares. That is about 3.9% dilution or so. Your next gigafactory will cost less than 2% dilution (or none at all if paid for with internally generated cash). I bet that Tesla just issues shares in 2019, 2021 instead of cash, which will be used to build out new factories.
"Probably not a good idea to be short TSLA right now."
Now that may change next week or maybe even Friday...
...but tomorrow is not that day.
Southwest Airlines non-stop sounds good. Lets hope we all make it there.
Cheers!
I was thinking about the 500k car number in 2020 and did some back of the napkin calculations:
2020
350k Model E
150k Model S/X
I have heard Elon say that the Gen 3 will cost $X (where X is 30k or 35k) in today's dollars, so he will adjust for inflation if necessary.
In 2020 the base price will be $40k (or more) for the base bare bones model due to inflation (stocks go up due to inflation as well and people always forget that variable).
The longer range model, which a lot more than half will be buying, base price will be $50k. P version at $65k base and you have an ASP with option take of at least $60k per car. And the Model S/X an avg. ASP of $120k.
350k*$60=$21b in revenue
150k*$120=$18b in revenue
And then I would bet another $5b or more from battery storage. Quite possibly some revenue from used cars and you have:
$50b in sales in 2020. 25% gross margin (lower margins for Model E of about 20%, will be offset by higher margins on battery storage devices) and 10% net margin, you are looking at $5b in earnings in 2020. $30 EPS and a high end 50x PE would give TSLA a $1500 share price. A modest 30x PE and you are still at $900.
This is what I would take as the base case scenario if everything goes as planned without any monumental setbacks, which are a real risk to a growing company. I am sure that there will be plenty of setbacks. Lets just hope that none of them are big.
If TSLA has to delay plans for 2-3 years then we might see a $500 - $800 share price in 2020 at best. If TSLA fails then obviously it will be trading in the teens or double digits at best.
But if Tesla exceeds expectations and does 700k cars in 2020 or even more as per JB's presentation at Stanford, then we might see $65b in revenues or more and a $2000 share price if done without any major share dilution.
They really pulled it off not to dilute shareholders this time around and yet raised twice as much money as in May. Just spectacular!
This is truly a huge victory for TSLA longs today, and the shorts might start running for the hills tomorrow.
I wouldn't be surprised to see Adam Jonas revise his numbers to reflect the 500k cars in 2020 vs. 371k that he used to come up with $320 price target. He might not do it tomorrow, but he might throw a hint that he will have to revise his price target in the near future. And then raise PT later. Or he could come out tomorrow with a revised $360 price target.
I heard Ben Kallo on CNBC today and he was pleasantly surprised at the low $5b price tag. I think that a lot of happy analysts are going to come out in praise of TSLA tomorrow.
Great news on the Gigafactory announcement today. A lot better than I (or for that matter anyone else, especially Kass) expected. I was thinking 7% dilution, but as it stands if they do a 30% conversion premium and the stock closes at a modest $260 tomorrow then we are looking at a $338 conversion price. So at best you will need to issue 5.5m shares. That is about 3.9% dilution or so. Your next gigafactory will cost less than 2% dilution (or none at all if paid for with internally generated cash). I bet that Tesla just issues shares in 2019, 2021 instead of cash, which will be used to build out new factories.
"Probably not a good idea to be short TSLA right now."
Now that may change next week or maybe even Friday...
...but tomorrow is not that day.
Southwest Airlines non-stop sounds good. Lets hope we all make it there.
Cheers!
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@sleepy
Nice run down. Thank you for that
I was under an impression from the rhetoric that GigaF output would be used up by E. And that would project as the 500k unit volume. I think the SX is on top of that (especially with GigF providing battery storage output as well). In addition, I think by 2020 battery storage revenue will be higher.
Thanks again. And looking forward to contributing to your trip!
Nice run down. Thank you for that
I was under an impression from the rhetoric that GigaF output would be used up by E. And that would project as the 500k unit volume. I think the SX is on top of that (especially with GigF providing battery storage output as well). In addition, I think by 2020 battery storage revenue will be higher.
Thanks again. And looking forward to contributing to your trip!
I agree with you, but...
...there are always some setbacks and things don't always go as planned. Maybe Tesla doesn't reach full production until 2021 and only makes enough batteries for 350k Model E in 2020.
I don't use perfect numbers like all analysts keep in their spreadsheets. I do all of my math in my head and it is just as accurate as any analysts numbers, or actually more accurate because these analysts are way too bearish, and I am talking about the biggest bulls here the AJ Twins (I am going to coin that term). Adam had 371k cars in 2020. And they spend days on their models and I spend 10 seconds or less on mine
I always have some numbers that are too optimistic, so I offset those with some conservative estimates elsewhere. It all evens out.
Norse
Active Member
I guess Solarcity will buy some of these batteries.
And have Tesla now showed us that there won't be further dilution down the road?
And have Tesla now showed us that there won't be further dilution down the road?
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