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These poll results are INFORMATIVE.
Judging by the poll results, Q2 seems to be a head-scratcher. There are votes for positive all the way to run for the hills, and everything in between. Here I thought it was obvious that Q2 would be an ugly quarter financially, so this surprises me.
Judging by the poll results, Q2 seems to be a head-scratcher. There are votes for positive all the way to run for the hills, and everything in between. Here I thought it was obvious that Q2 would be an ugly quarter financially, so this surprises me.
The low number of responses and wide range of estimates, in my opinion, illustrate two lessons:
No wonder why this stock is so volatile and acts as if it's a risky venture capital investment with an extreme annual cash flow discount rate exceeding 20%. Once Model 3's profitability is proven and visible on financial statements, which already started with Munro/Germans' surprisingly high profitability estimates of "over 30%," corroborating management's "high 20s" estimate, the discount rate will likely drop substantially, leading to a surge in the stock price. I expect this to occur in the next six to twelve months, depending on how quickly Elon can cut battery costs and operating expenses in the near future. I have high confidence in Elon and Tesla.
- Most retail investors do not understand accounting to the level they can predict earnings results; and
- Model 3's true profitability is yet to be determined.
As for me, I am comfortable with my $3 per share Q2 loss estimate, which has turned out to be the median of the poll. I look forward to the next six months, when short positions blow up.
This will be an ugly quarter. I am forecasting GAAP loss to be right around the same as Q1 ~ (4.20). I am expecting 0 sales of ZEV credits as Tesla will want those stockpiled for the back end of the year. Also expecting some form of restructuring charge probably in the realm of 50-70m for the severance due to 9% of laid off workforce.
Potentially included would be write downs for automation equipment that either does not work, or has been repurposed. Nothing in the Q1 or Q42017 reports and I believe Tesla will want to get that charge on the books as well to pave an easier path for profitability in Q3 and Q4. If there are write downs then combined with the restricting charge you could easily have one-time expenses over $100m.
The last reason I believe it will be a difficult quarter for them is King Dollar went on a rampage in Q2. While Tesla was intentionally sending as many deliveries as they could to international markets per avoidance of 200k US delivery, the dollar strengthened materially against the currencies of Tesla's most important non-US markets. That will be a dent to revenue and crimp S/X margins for the quarter.
No, just a reference/identification. But it did ensure Musk saw the tweet. I bet the guy was surprised when Elon replied - probably made his day!
I'll give it a shot, here's my spreadsheet - I assume $60K revenue for M3 (54K cost), $100K for MS (80K cost), $110 for MX (85K cost).
The main reason for the large loss is because of inventory holdback to keep the federal tax credit and logistical issues.
View attachment 318979
I'll give it a shot, here's my spreadsheet - I assume $60K revenue for M3 (54K cost), $100K for MS (80K cost), $110 for MX (85K cost).
The main reason for the large loss is because of inventory holdback to keep the federal tax credit and logistical issues.
View attachment 318979
Thank you. Could you please provide support for 20.0% and 22.7% gross margin assumptions for S/X, respectively?
This is not how accounting works. Please look at luvb2b's thread. That's a fantastic starting point and I'd say is incredible in terms of how much detail it captures.I'll give it a shot, here's my spreadsheet - I assume $60K revenue for M3 (54K cost), $100K for MS (80K cost), $110 for MX (85K cost).
The main reason for the large loss is because of inventory holdback to keep the federal tax credit and logistical issues.
View attachment 318979
Do we have an analyst consensus? I'm guessing it would be somewhere around -$4. Revenue is straight forward, but no one knows for sure about expenses/depreciation. I'm not a financial analyst and have no reason to veer far from the financial estimates from @luvb2b. For long term investors, it doesn't matter how the market reacts to Q2 financials. I have a fair bit of trading money on the line from buying dips over the last month. If we take a big dive, I would obviously prefer to exit ahead and then come back in afterwards. I'm not so sure we will dive though. It comes down to trying to predict how the market will react. For me, that has proved nearly impossible even when I guess right on the financials. The market certainly must expect a seriously bad financial quarter.
Will there be somewhat of a negative or positive surprise to either the financial numbers or the information given on the conference call? The market does not appear inclined to believe Elon right now, so I tend to think the conference call may have less effect than it has in the past, assuming Elon doesn't go rogue again. If he indicates model 3 production is approaching 5,000/week sustained, I would predict perhaps somewhat of a yawn to that right now, but I really don't know.
So far in July, Tesla is averaging 453 model 3 per day according to Shabooska's numbers, which appear to be from employee leaks. I think Augkuo showed identical numbers from an employee source. If we subtract the July 4th holiday period and start the analysis from July 5th, model 3 average production is 542 per day. They aren't far off, but they haven't been able to sustain production at 700+ for more than a few days in a row so far. They could hit 5,000+ for the week leading up to the ER, which Elon could indicate. Again, I'm not sure what effect that will have. It sure seems like sustaining production at 5,000/week should improve sentiment, but there is a massive media/analyst/short FUD storm going on. The Q2 results are not likely to change that.
It is obvious. Many people voting in this poll are living in their own imagined universe that has no resemblance to reality.
This is not how accounting works. Please look at luvb2b's thread. That's a fantastic starting point and I'd say is incredible in terms of how much detail it captures.
In any case, to point out the obvious, the gross profit is calculated from the cost of cars sold, not all the cars manufactured. Built, but not sold, are part of your assets, not expenses like you show.