Short-Term TSLA Price Movements - 2016

[Seesaw]

you would have to think Q2 deliveries will be below estimates? Gearing up Model X quality would have slowed those down and at the same time would of taken away resources from Model S production/deliveries.

Once they sort that out the Model X will be a licence to print money.

Tesla is one of the few makers where drivetrain costs will actually decrease over time, I have read that internal combustion drivetrains to will continue to become more expensive to develop and produce to meet tightening emission and fuel efficiency standards. With each car produced on average expected to accumulate an additional $1500 in emission equipment by 2025.

 

[rallykeeper]

There could be additional tooling costs added to do adjustments. Labor cost may be more because the extra QC may be more time consuming than we think. And the real thing I think may explain this huge drop in gross margin could be defected goods. It could be the case that some cars were just beyond QC/repair and they made another.

Unfortunately, this is all just speculative. We will likely never know that MX automotive margin was for Q1. They'll only disclose total automotive margin and even that is subject to timing differences of production costs versus revenue recognition -- particularly when you are ramping production.

Gross margin could go up for Q1 and we will wouldn't know if MX still dragged it down (since MS margins could have improved).

Oh well, interesting thought exercise.

 

[Irishjugg]

So you think share price will go down as a result, and we can take advantage of that?

Exactly. I think I'll be able to buy my shares back somewhere between 200 and 220

 

[Irishjugg]

Even with full year reaffirmed, wouldn't it mean that we are no longer at 750/week for Model X and confirm the fear of further delays? That number was just from the 4/4 deliveries update so Q2 should not have been affected.

BTW I am not saying this will be the case. Just hypotheticals in the case that Ben Kallo is right. Personally I would be disappointed. And if Ben is wrong the markets will react positively.



The market has the Q1 deliveries total of 14820, and whatever that means for revenue, priced in. It does not have any Q2 guidance shortfall priced in. Currently street estimate for Q2 revenue is $2.09B, which is about 30% higher than Q1. Ben Kallo's 16.5k is only 11% higher than Q1 deliveries, so a lot would have to be made up by TE to meet Q2 estimates.

In my experience watching TSLA that hasn't been true in the past on bad quarters. Previous quarters we saw a bad delivery number and everyone here was talking about how it was already priced in and wouldn't cause much drop on the ER, and it's true that rationally that is what should happen, however the ER would cincome out, Tesla would shave 5-10% and the commentary would be all about the disappointing earnings/revenue miss even though they were already obvious from the delivery numbers.

I'm not a pro, you certainly could be right, but in my experience the ER gets treated like 100% brand new info when it comes out, probably because to the vast majority of people trading Tesla, it's the first time they hear of it. Most people are much too lazy to actually follow the company and its news the way an investor should.

 

[hoang51]

I would say today's drop is one of those expected drops before earnings, especially for those who do not want to risk. But then again, TSLA followed NASDAQ for the day. Earnings is next week on May 4th. So far, my understanding is that the only things that will prop up TSLA are something significant with regards to Model X ramping higher and solid Model 3 production plans. I was going to jump back in TSLA before the earnings, but decided to stay sideline for a little longer. It doesn't look pretty for the next few months for TSLA unless the conference surprises the market.

 

[drinkerofkoolaid]

By today, Tesla has likely received 500,000 deposits.($500 million). Additionally, Tesla is receiving between 1000 and 5000 reservations every day.

On top of this, Tesla has received a number of large Powerwall orders from utilities. I think utilities usually need to pay for a large portion before the product is built? If this is the case, Tesla has likely received a few hundred million dollars from Powerwall orders. Can anyone shed light on this?

As for ZEV credits, Tesla has likely been able to sell many of the credits for a good amount since the "traditional automobile manufacturers" have been selling record numbers of SUVs and Trucks.

Thoughts?

 

[maoing]

Am I wrong about this? Will anyone else be surprised/disappointed if Q2 is only 16.5k, or is that within expectations? (would require 25k avg for Q3/Q4 to meet low end of full year guidance)

Certainly it's disappointed. Q4 delivery 17K, two quarters less than that number for a growth company? Also it pushes heavy load in 2nd half of 2016 and very likely not bode well for a yearly guidance miss again in 2016.

 

[maoing]

Within. As long as full year is reaffirmed.

I think TM will reaffirm full year guidance in Q1 ER. But lower guidance in Q2 ER and miss guidance in Q4 ER. Exactly over promise under delivery pattern with 2014/2015.

 

[geneclean55]

I would say today's drop is one of those expected drops before earnings, especially for those who do not want to risk. But then again, TSLA followed NASDAQ for the day. Earnings is next week on May 4th. So far, my understanding is that the only things that will prop up TSLA are something significant with regards to Model X ramping higher and solid Model 3 production plans. I was going to jump back in TSLA before the earnings, but decided to stay sideline for a little longer. It doesn't look pretty for the next few months for TSLA unless the conference surprises the market.

The markets definitely look more jittery over the past few days. Rising oil price, and a dovish stance from the Fed are not having similar effects to a few weeks ago. People were warning of reduced sales for Apple before earnings release and yet the stock still took a big hit when the numbers came out. I know TSLA has a different growth profile/outlook, but i still expect it to take some flak after the ER, unless they are holding some juicy info in reserve . Could be an opportunity to load up. The only wrinkle is continued concerns with Model X production. I am hoping for some clarity on that issue next week from Musk et al.

 

[Seesaw]

By today, Tesla has likely received 500,000 deposits.($500 million). Additionally, Tesla is receiving between 1000 and 5000 reservations every day.

I'm thinking it will closer to 425,000..... which is still a staggering amount.

 

[maoing]

If predicted 16.5k vehicles for Q2F16 would turn out to be a true number, TSLA would repeat last year and end up missing the full year guidance at a higher probability if last year is of any predictable indication of this year. I for one would be surprised and disappointed.

Agreed. The 80K-90K guidance is just BS to fool the investors in Q1 CC to save SP. Q1 model S delivery only 12K, that's limited by demand not by any production BS excuse.

 

[Johan]

Maoing, however bearish sounding is right. Demand for X is soft for now. Model S must hold the cash flow going until 3. Likely rescue comes from Tesla Energy + (a bit lower possibility) the X becoming a smash hit in China (which it's designed for in the first place).

 

[drinkerofkoolaid]

Apparently there is a big event on Wednesday at the Tesla Factory. Elon Musk, Lyndon Rive, Nancy Pdfund, Ira Ehrenpreis, and many more will be speaking. Interestingly, Elon will be speaking at 8:45AM on Wednesday. Tesla reports earnings on Wednesday. Does this mean Tesla will report earnings early?

World Energy Innovation Forum

 

[tinm]

Apparently there is a big event on Wednesday at the Tesla Factory. Elon Musk, Lyndon Rive, Nancy Pdfund, Ira Ehrenpreis, and many more will be speaking. Interestingly, Elon will be speaking at 8:45AM on Wednesday. Tesla reports earnings on Wednesday. Does this mean Tesla will report earnings early?

World Energy Innovation Forum

That or Elon just has a crazy busy schedule and wanted to get his speech over with early so he can get back to the rest of the day's schedule?


However, it is interesting that the "World Energy Innovation Forum" is run by Ira Ehrenpreis, who happens to sit on the Board of Directors of . . . . Tesla Motors.

And I have to chuckle at Tesla's bio of Ira on Tesla's IR website. It's not enough to announce that Ira got "Summa Cum Laude" when he graduated UCLA. No, they have to repeat it. In italics.

 

[maoing]

As soon as TM can raise enough money, Model S/X/TE demand isn't important. Negative cash flow will last until model 3 can contribute meaningful financials, maybe in 2018/2019. What TM needs to do in next a few months is to present model 3 production ramp up plan + creative financial engineering from CFO to get the capital raise deal done.

Maoing, however bearish sounding is right. Demand for X is soft for now. Model S must hold the cash flow going until 3. Likely rescue comes from Tesla Energy + (a bit lower possibility) the X becoming a smash hit in China (which it's designed for in the first place).

 

[Cattledog]

Apparently there is a big event on Wednesday at the Tesla Factory. Elon Musk, Lyndon Rive, Nancy Pdfund, Ira Ehrenpreis, and many more will be speaking. Interestingly, Elon will be speaking at 8:45AM on Wednesday. Tesla reports earnings on Wednesday. Does this mean Tesla will report earnings early?

World Energy Innovation Forum

They did this same conference in 2014 for sure because we considered sponsoring it with our local utility. Not sure if they have done it other times. Earnings call is at 2:30, plenty of time in Elon's schedule!

 

[Seesaw]

So what number of deliveries are Poole expecting?

 

[lango]

As soon as TM can raise enough money, Model S/X/TE demand isn't important. Negative cash flow will last until model 3 can contribute meaningful financials, maybe in 2018/2019. What TM needs to do in next a few months is to present model 3 production ramp up plan + creative financial engineering from CFO to get the capital raise deal done.

Model X and Model S demand is very important, also as a proxy for future Model 3 demand. Even if Model 3 reservations would stop now but S and X continued to grow this is in my opinion a better indication that 3 demand will continue to grow once Model 3 is released than if Model 3 pre-reservations would continue grow all the way to release and S and X were flat.

Tesla is a growth stock and the most potent combination is revenue growth combined with margin expansion and this will happen if S and X continues to grow.

The X is still a problem and Tesla deserves to be punished for it. I am still inclined to believe the schedule was unrealistic and that there has not been any big screw-ups along the way. Let's hope the demand is there for 100k units a year eventually.

 

[anticitizen13.7]

Maoing, however bearish sounding is right. Demand for X is soft for now. Model S must hold the cash flow going until 3. Likely rescue comes from Tesla Energy + (a bit lower possibility) the X becoming a smash hit in China (which it's designed for in the first place).

I am having a difficult time ascertaining actual demand for Model X, because it seems like there are still production issues and a lack of demo units in stores.

However, I agree that the short term does not look great, at least where Q1 results are concerned.

 

[Seesaw]

I am having a difficult time ascertaining actual demand for Model X, because it seems like there are still production issues and a lack of demo units in stores.

I'm thinking X will pleasantly surprise. I think some of the issues around some early cars and lack of demos is a symptom of prioritising deliveries.