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Hi @luvb2b I get different Q1 and Q2 dpo and dio results when deriving straight off the Qs.
I use a rolling quarterly AP average and net the quarterly change in inventory. What's your calc?
For example, 6/30 dpo:
[(6/30AP + 3/31AP)/2] / [(6/30COGS + 6/30Inv - 3/31Inv)/91]
Great modeling. QQ does the gross margin for model 3 seem a bit high. I thought they were trying to get to 16% at some point in the qtr but now for the whole qtr.
Headwinds to company est:
-not at 6k per week
-Logistics nightmare
Tailwinds to company est:
-dual motor %
-M3P %
Maybe I missed part of the thread where this was discussed.
luvb2b, really great work on your forecast for Q3/Q4...
I appreciate how much work was involved in setting it up, and then continuing to update it...
As you may notice, this is my first post, and yes, your post made me sign up! So well done!!
Anyway, the reason I'm posting is, there are two things I'm concerned about on your projections...
The first one, ZEV credits, is a small one, but the SG&A, I think there's no way that can be even close...
ZEV credits:
I think those will turn out to be $0...
I could be wrong, but there was an interesting thread - two threads, actually - on Twitter regarding these...
Anyway, he sold me, but at the very least, worth a read even if you choose to disagree..
Hoping you can read these threads - (don't know if you have a Twitter account)
People's Grain on Twitter
People's Grain on Twitter
@luvb2b When your buy the car, there's a destination and doc fee of $1200. This is not part of the ASP I suppose. Is that right?
Thanks for your Feedback !
Mathematically you are Right.
But from an Accounting perspective the common equity is Changed by the P&L result (+60.112) , changes in common stock (I am not Aware of) and other comprehensive loss / income that is normally not significant.
Therefore from my Point of view I do not understand the increase of common equity.
Would be great to get some insights here.
Cheers
… |
total opex - one time items |
stock based comp |
stock based comp in cogs |
non-gaap opex |
non-gaap opex qoq %chg |
… |
s deliveries |
x deliveries |
s+x deliveries |
3 deliveries |
3 production |
lease s/x % veh |
avg price s+x |
avg price model 3 |
revenue |
auto sales ex 3 |
auto sales mod 3 |
auto leasing |
1 time autopilot |
zev credits |
total auto |
energy storage |
solarcity |
grohmann |
services/other |
total revenue |
cost of revenue |
auto sales ex 3 |
auto sales mod 3 |
auto leasing |
total auto |
energy storage |
solarcity |
grohmann |
services & other |
total cost of rev |
gross profit |
auto gaap ex 3 gm |
auto-zev ex 3 gm |
model 3 gm |
auto-zev incl 3 gm |
storage gm |
scty gm |
grohmann gm |
services gm |
opex |
tesla r&d |
tesla sg&a |
1 time costs |
solarcity r&d |
solarcity sg&a |
total opex |
op income |
interest inc |
interest exp |
scty interest |
other income exp |
1time scty gain |
pretax income |
income tax |
net income |
non-cont int. |
net inc to common |
basic shares |
diluted shares |
diluted gaap eps |
gaap net income |
+ stock based comp |
+ one time scty |
non-gaap net income |
non-gaap diluted eps |
dio |
dpo |
balance sheet |
current assets |
cash & eq. |
restricted cash |
accts rcvbl |
inventory |
prepaids+other |
total current assets |
op lease vehicles |
solar energy sys |
pp&e |
intangible assets |
goodwill |
mypower rcvbls |
restricted cash |
other assets |
total assets |
current liabiliites |
accts payable |
accrued liabs+other |
deferred revenue |
resale value guar |
cust deposits |
curr debt+leases |
curr solar bonds |
total current liabs |
lt debt+leases |
solar bonds |
rel party conv debt |
deferred revenue |
resale value guar |
other lt liabilities |
comm stk warrants |
capital lease oblg |
total liabilities |
commits/contings |
rdmbl ncis in subs |
conv senior notes |
nci in subsidiaries |
common equity |
cash flow statement |
cash flows from ops |
net loss |
dep/amortization |
stock-based comp |
am of debt discount |
inv write-down |
loss on disposals |
forex loss (gain) |
loss on acq scty |
non-cash int/other |
chgs in op as/lb |
accts rcbl |
inv / op leases |
prepaids/other ca |
mypower rcvbls + other |
accts pybl/accr liabs |
deferred revenue |
customer deposits |
other lt liabs |
net cash from ops |
cash flows from inv |
pp&e purchases |
purchase solar sys |
net cash from inv |
cash flows from fin |
stock issued |
debt issued |
debt repayments |
rel pty solar repaids |
coll lease borrowing |
stock option excrs |
capital lease paids |
stock+debt issue cost |
investment by nci in subs |
dist to nci in subs |
buyouts of nci in subs |
net cash from fin |
forex effect |
net change in cash |
cash & eq start |
cash & eq end |
I suspect the any over/under on the destination/document fee vs cost for performing those services would be charged to SG&A.
Can’t really take that Twitter thread seriously with conclusions like this mixed in:
“19/ Furthermore, the OEMs should smell blood in the water. It doesn't take a rocket scientist and a Deepak to realize that if they don't purchase any Tesla credits for a while, they will inflict mega pain on Musk and Co. In fact, it could push them to bankruptcy.”
Anyone who thinks Tesla is relying on ZEV credits to stay solvent is deluded.
Thanks for your post! You made me think more about SG&A growth. Luckily we have a precedent to evaluate the assertion that "there's no possible way sales tripled and SG&A barely budged..." Somehow, in Q3 2016, Tesla was able to increase deliveries to 24,800 from 14,400 in Q2 2016 with minimal increase in SG&A (from $321 mil to $337 mil). This was a factor of 1.7 increase in deliveries (as opposed to the 2x increase this year, counting all models). In Q3 2016, Tesla was pulling out all of the stops to show a single-quarter profit (as they are this quarter), so they almost certainly did some one-time shuffling of expenses that was not sustainable. But it is not "impossible" to offset increased paperwork and detailing expenses with a combination of cost-cutting measures (9% layoffs at the end of Q2) and probably some accounting tricks. So I think that it is possible that SG&A stayed close to flat this quarter, although in this case we should pay real attention to Q4 SG&A, to assess the relative importance one-time vs. sustainable cost savings.
On the other hand, another data point we have is that SG&A increased by $65 mil in Q2 2018, while deliveries increased by 10,800. Very naively interpreted, this would imply a marginal SG&A increase of $6,000 per car, which, if applied this quarter, would imply an extra $258 mil SG&A on 42,700 extra deliveries. If this were true, combined with reduced ZEV credits, Tesla would probably not even be operating profit positive. Elon bizarrely seems to have hinted that Tesla did achieve "OPP" by posting this video on twitter on Oct 1. So my guess is that SG&A increase was less than $100 mil, but that Tesla did not achieve positive net income this quarter. At least one of the attempted one-time accounting "rearrangements" that might have pushed Tesla to net profitability this quarter (recognition of additional "enhanced autopilot" revenue from the last ~2 years, due to release of fully automated lane changes) did not quite get done in time, but should help Q4.
My bad:Not sure about that, their wording for cost of automotive includes delivery and logistics, plus the doc fee is part of ASP, so in automotive sales.
At 83.5k deliveries it would be ~125m, so certainly not peanuts.
i made a few adjustments and corrections based on comments received. one meaningful correction is i had leased s/x vehicles too low at 7% - this causes revenue to skew higher. another correction was i had depreciation too low in the cash flow statement. adjusted balance sheet for comments about common equity varying too much vs. net income. moved the sec settlement into q4 per brian.
thanks for all your comments.
i also want to kick myself for thinking analysts would adjust their estimates higher. most analysts are out with notes today and they all seem to have the same negative ratings as usual. i feel dumb for thinking they would get to the same page as me.
It's becoming clear that most Wall Street analysts are simply saying what their companies want them to say, or repeating stuff they heard from market manipulators, or just making stuff up, rather than doing analysis.
Regardless of whether Tesla shows a net profit in Q3 or is slighly below breakeven, it seems inescapable that they'll be free-cash-flow positive. That's going to wake some people up from their slumber, as it destroys the primary short-seller thesis (the idea that Tesla can run out of capital).
Another thing I already started hearing on twitter is how accounts payable will grow and all the generated cash is fake. Conveniently ignoring guidance, inventory and receivable growth.
I don't know what it will take for them to change their minds. I assume that after a large Q3 profit they will say it was a one time fluke. After even larger Q4 profits they will say that Tesla still has lost more money than they have made the last year. After huge Q1 profits they will say that Tesla still have lost more money than they have done since IPO even though they have had a monopoly and soon the real car manufacturers will come ear their pie. After another big Q2 profit they will say that Tesla is still overvalued.I agree with the sentiment (and am in fact investing based on it). Considering the overall media environment, I don't expect the short thesis based on it to be destroyed until Q4 results though. After the Q3 earnings, the story will change to "it's an outlier" and the thesis will stay close to the same as before the Q3 results. We will need a second (and growing) quarter of positive cash flow to really change that particular thesis.
It's becoming clear that most Wall Street analysts are simply saying what their companies want them to say, or repeating stuff they heard from market manipulators, or just making stuff up, rather than doing analysis.
Regardless of whether Tesla shows a net profit in Q3 or is slighly below breakeven, it seems inescapable that they'll be free-cash-flow positive. That's going to wake some people up from their slumber, as it destroys the primary short-seller thesis (the idea that Tesla can run out of capital).
NoDo they not understand that accounts payable is shrinking as a percentage of revenue?
Do they not understand that accounts payable is shrinking as a percentage of revenue?
That really IS a good observation....
And as long as that continues, there's a chance... *So you're saying there's a chance...* ;-)
That said, as soon as that turns and starts going up (AP/Revenue), the growth story is ~over~...
And when the growth story is over.....~It's~ over....
I expect I'll get flamed and down-voted for that, but......think about it...