Short-Term TSLA Price Movements - 2016

[MitchJi]

The 2016 estimate is consistent with Tesla delivering 25K cars in Q4 and a modest increase in TE revenue. So there's little room for an upside surprise there.


There is some chance of estimates being raised in 1H17 if Tesla can raise quarterly production and demand above 25K units and/or generate significant TE revenues.

Things get really interesting in 2018. Goldman's $13.5B estimate is only 6.4B more than 2016. This hugely discounts Tesla's plans for both TE and M3, and once they hit volume production the 2018 estimates will need to go up significantly.

Bottom line: Some chance of upward estimate revisions in 1H17, but much more likely after M3 quantity shipments.

IMO you and/or Goldman are missing the fact that TE is supposed to ramp exponentially by late Q4-2016.

Of course it's a possibility that it could slip to Q1-2017.

 

[vgrinshpun]

Some pictures from the Fortune article about Kauai 52MWh BES co-located with the Solar Farm - nice to see some evidence of quite massive TE deployment. As seen from the second picture below, the inverter is by Tesla, not Dynapower that supplied inverters for PowerPack 1. So this BES is definitely based on PowerPack2.

 

[dennis]

IMO you and/or Goldman are missing the fact that TE is supposed to ramp exponentially by late Q4-2016.

Of course it's a possibility that it could slip to Q1-2017.

No I didn't miss that. I'm reporting that Goldman doesn't believe it yet.

 

[Roger t]

This one:
Chanos: Tesla-SolarCity Combination Is Absurd, Ridiculous

Almost everything he says is wrong! He thinks Tesla is a car company?! He thinks Tesla loses money?! He will be surprised in 2-3 years.

ok. He is bullish on distributed solar, not roof top. His reason is "It is called distributed solar because it is distributed by the utilities."

 

[vgrinshpun]

ok. He is bullish on distributed solar, not roof top. His reason is "It is called distributed solar because it is distributed by the utilities."

If he said it, it makes him clueless^2. Distributed solar is called so because it is installed (roof-top or otherwise) at the point of consumption, not because it is "distributed by utilities".

 

[Papafox]

ok. He is bullish on distributed solar, not roof top. His reason is "It is called distributed solar because it is distributed by the utilities."

What Chanos is missing is the understanding that the cost of creating electricity on a roof is going to become lower than the transmission cost of sending that electricity from a solar farm or any other type of generation facility to the customer. As prices of solar and batteries fall, microgrids become much more useful than the megagrids with their significant transmission costs. There's still a need for the grid, but it makes sense to grow local power generation at a rate that the current transmission infrastructure can do the job, rather than to favor distributed solar and double the transmission capabilities of the grid as electric cars and other electrical uses begin to take market share away from traditional fossil-fuel based solutions.

 

[austinEV]

Anyone else receive letters in the mail from Tesla via some third party wherein they state how desperately they have been trying to reach you and would you please call immediately so you can vote by phone re the SCTY deal?

I did... now I wonder if it is a scam. I have it at home or I would post it.

 

[kenliles]

ok. He is bullish on distributed solar, not roof top. His reason is "It is called distributed solar because it is distributed by the utilities."

I think that big fusion reactor in the sky will be distributing everywhere- just a guess of course

If he said it, it makes him clueless^2. Distributed solar is called so because it is installed (roof-top or otherwise) at the point of consumption, not because it is "distributed by utilities".

exactly

I think what needs less distribution is Chanos...

 

[EinSV]

@vgrinshpun -- thanks for the input! My reactions to your comments are below

• speculative: given that production seem to be batched geographically to an extreme, it is likely that in Q4 Tesla will deliver 2 - 3K cars more than they produce, I would say 27 - 28K cars delivered in Q4

You may be right but since most deliveries so far have been overseas IMO the visibility into delivery rate is not very clear yet. So I personally prefer to just stick with guidance for now. Hopefully will have more data in a couple weeks. [Edit: Just saw @esk8mw's VIN numbers which look really good but I'm still sticking with guidance for the time being].

• speculative: 29% GM in my view is a stretch. The guidance is 24% - 25%, with Elon mentioning on ER call that he believes they got a shot at 28%. I personally would be surprised if the GM will be higher than 25%, but as I said this is speculative

I like the idea of being conservative on margins and not exceeding guidance, but in this case Tesla was already at the high end of guidance at the end of Q3. Given the trend of improved automotive non-GAAP GMs from quarter to quarter (more than 200 basis points from Q1 to Q2 and more than 300 basis points from Q2-Q3) and all the factors identified in my earlier post, I personally think a 200-400 basis point increase from Q3-Q4 is conservative. This results in 27-29% non-GAAP automotive GM. The main risks to the downside I can think of are currency risks and increased sales of X v. S. I will re-run the numbers using the low end of my range -- 27% non-GAAP automotive GM -- since that already exceeds guidance.

• factual: Tesla guided for the non-GAAP OpEx to be 30% higher than in 2015. This works out to $1,900M. So far they spent $1,340M, so Q4 OpEx should be less than $560M (vs.$590 assumed in your estimate). The reason I say less than $560M is that, although this was not acknowledged often enough, Jason steered Tesla to improve on their projected OpEX in two of the two last quarters

Good point. I think Jason has instilled quite a bit of discipline so absent some unexpected developments I think it is reasonable to expect they will not exceed guidance on OpEx. I'll re-run the numbers with this change.

All in all, on top of maintaining good cash balance due to significant cash generated by MS/MX and emerging TE, I believe they also have a real shot at GAAP profitability in Q4.

I totally agree. The main open issue in my mind is whether they can convert the pipeline of orders into deliveries by 12/31. Seems very doable (especially with 5,000 cars in transit at the end of Q3). Looking forward to more info on U.S. deliveries.

 

[Gtoffo]

Except for the "usual bull suspects" have major analysts released new research notes/PT regarding TSLA after ER or should we expect new ones after the results of the vote (either way)?

My JAN17 options are so worthless at the moment there's no point in even trying to sell them for a loss.

But I JUST need a LITTLE 30% bump in stock price and I will make it all back! -rocking in his chair uncontrollably-

 

[FredTMC]

Is Solarcity streaming their vote ? I can't find it...

 

[3Victoria]

I think that big fusion reactor in the sky will be distributing everywhere- just a guess of course

Good point - home fusion exists as solar+battery. We don't need no cold fusion

 

[Papafox]

Those of us crazy people who think the 50-60% daily trading percentage of short-sellers actually influences TSLA's stock price are looking at today's trading with great interest. The near-vertical climbs are indications that longs on the sidelines and shorts are nervous and are ready to buy in if they see TSLA ready to head higher. The reason we're seeing it today is because 1) the broader markets are up and 2) a lack of a negative reaction to a successful SCTY merger would indicate that the fearful downtrend is ready to end. We're looking at the horizontal trading at 188 as indicative of capping behavior by the shorts, an attempt to hold this price until some negative catalyst allows the SP to descend again.

 

[Ovulation]

Is Solarcity streaming their vote ? I can't find it...

same here

 

[tander]

Except for the "usual bull suspects" have major analysts released new research notes/PT regarding TSLA after ER or should we expect new ones after the results of the vote (either way)?

My JAN17 options are so worthless at the moment there's no point in even trying to sell them for a loss.

But I JUST need a LITTLE 30% bump in stock price and I will make it all back! -rocking in his chair uncontrollably-

Heh, it's pretty weird, for a while there 30% was little for TSLA. I really don't know about the analysts. I would have thought after the Q3 earnings that would have been enough for them to get off the fence. Maybe some analysts are content to weigh in pending the vote, maybe some are waiting for future metrics to play out. Solar it pretty much a hot potato right now so I think they are extra cautious about giving things the thumbs up, even though they ought to be able to put 2+2 together regarding home storage and the roofing panels.

 

[zdriver]

Anyone have insight/speculation regarding the out of the blue volume spike just before the run up this morning? Seems like a lot of volume out of the blue for little-to-no price movement. Happened to SCTY too, a minute before TSLA...

 

[MartinAustin]

Yeah if I go here...

Investor Relations - SolarCity

...and click on "Listen to webcast," there ain't no webcast to listen to.

 

[FredTMC]

So... no one here has any info or link to the SCTY vote webcast?!

Really?!

 

[FredTMC]

Yeah if I go here...

Investor Relations - SolarCity

...and click on "Listen to webcast," there ain't no webcast to listen to.

Yup. Boooooo

 

[MitchJi]

IMO you and/or Goldman are missing the fact that TE is supposed to ramp exponentially by late Q4-2016.

Of course it's a possibility that it could slip to Q1-2017.

No I didn't miss that. I'm reporting that Goldman doesn't believe it yet.

Which is why I stated and/or.

Sorry for the ambiguity!