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Q3:
5,700 cars delivered,
$633 million in revenue
$0.34 EPS
22% gross margin excl. ZEV
The reason why TSLA is down 10% has to do with the following items from shareholder letter:
We expect our non-GAAP profitability to be about consistent with Q3. Analyst estimates were for $0.20, so another $0.12 in Q4 is a disappointment. This is the major reason for the sell-off.
Other less than stellar items include:
25% increase in R&D in Q4 and 20% increase in SG&A.
Q3 results were good, but guidance is disappointing. No 2014 guidance doesn't help either.
Q4 consensus was 0.20 and they guided towards 0.12 or so.
That is why the stock is tanking.
This has nothing to do with Q3 results which were good.
Sleepy, looks to me like ASP came in at $105k! (ex 10mm ZEV and ~8mm GHG)
And guiding for similar ASP next qtr. I find that incredible, but...
I worried about this, too, but my read is that a lot of the stock compensation is defined in terms of # of shares. As the share price has risen dramatically, so to has the cost of the share-based comp.-GAAP loss getting bigger QoQ. I don't really care about GAAP, but the stock-based compensation worries me a lot.
I worried about this, too, but my read is that a lot of the stock compensation is defined in terms of # of shares. As the share price has risen dramatically, so to has the cost of the share-based comp.
I worried about this, too, but my read is that a lot of the stock compensation is defined in terms of # of shares. As the share price has risen dramatically, so to has the cost of the share-based comp.
I don't know Sleepy, I think this is one of those situations where analysts and money managers reevaluate. I know we are down a ton right now, but the main thing holding price targets back was execution risk. The letter (to me) is another thing to allay that fear.
I also think Sg&a expenses aren't necessarily a negative. In this quarter Tesla had to do a ton of hiring because of international roll out. These will stabilize in due time.
Granted, in my mind I wrote off my Nov 200's but I still think there's a possibility of a run by the end of this week. Elaine Kwei, Andrea James, and Deutsche are probably reassessing and will revise up or reaffirm the hold because of gross margin progress and performing at or above their expectation. Except now there is the dimension of global demand.
I wrote a couple of weeks ago that TSLA is now a buy and hold investment and people like bonnie, who stay true to this strategy will be ok. It doesn't matter if the stock goes down to $10 tomorrow if it ultimately ends up at $1000 in the future. I also wrote that playing options during earnings does not give you a good risk/reward ratio like it did in Q1 and even Q2. It will be very hard to make money with short term options on TSLA. I recommend taking a buy and hold strategy.
+1. The beauty of common stock is that if you're invested in a good company you can wait out the bumps in the road even if it takes a couple extra years. With options, you're not just betting on the company but you're betting on timing as well. It's exponentially more difficult.
+1. The beauty of common stock is that if you're invested in a good company you can wait out the bumps in the road even if it takes a couple extra years. With options, you're not just betting on the company but you're betting on timing as well. It's exponentially more difficult.
Sleepy, do you have any thoughts on why Tesla decided not to include any 2014 production guidance in the shareholder's letter? After all the information on 2014 and 2015 production goals was provided by Elon during the visit to Germany, and he did throw around some numbers, including the plnanning " kind of next generation production line for the S and X".
The second question is regarding their use of stock as a part of compensation packages. Do you think that because of this Elon has an incentive to do some targeted release of additional information to prevent further erosion of the stock price.
I am basically a long term investor, but am using margin and options as a share accumulation tool. I feel your pain as I am also likely to take heavy loss with the Nov 16 call spreads. Ironically this ER call was all about exceeding expectations on how agressively company is planning major expansion of the production, short, medium and long term, and this is, after all, what supposed to firm up valuation that is not based on current performance, but can only be justified in context of rapid company growth.
I am also not certain that Tesla will even give out Q4 guidance. I hope they do, but I think chances are less than 85% you stated; imo more like 60%. But I have not been following TSLA for that long, so I am not sure what their tradition has been. If they do announce FY14 guidance that will mean that supplier constraints have been resolved or are on the verge of being resolved. Therefore, any FY14 guidance will be good news since that means that there is visibility. But I agree that the number has to be at 40k to make a big impact.