Yes. Still have some dry powder just in case.Are there any small investors with any money left?
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
To me this is the crux of why the typical Wall St analyst who covers autos is the wrong person and most firms need to cover Tesla with co coverage of software and auto.
I have never heard Elon state this explicitly, but he kind of alludes to it in some of the tweets and noise around the upcoming Version 10 release. Yes at the end of the day Tesla sells cars, energy, etc., but IF and it is an IF, Tesla is putting together a SAAS model unlike any other auto company and has the ability to drop software type margins which is why if the company can deliver trying to value it like an auto company is off the mark.
In searching for our second Tesla I called roughly six regional dealers to find one and in the process asked a few questions. This is by no means exhaustive, but it seems as if there is about a 60/40 split of people not purchasing FSD. So in the current quarter with just under 100k vehicles delivered there is an upside revenue potential of about 60,000 vehicles X whatever the future upgrade cost is of FSD if it become feature rich enough to drive an upgrade cycle. That is a big number, and that is just one quarter's worth of vehicles. Elon has stated that many of the Version 10 release will require premium based subscriptions, and once again this is an IF, but the recurring revenue potential as the fleet and capabilities expands is tremendous.
That's why the GM for autos is a bit of a red herring to me. Yes, Tesla needs to be able to improve operating efficiencies and this should continue to improve over time with more vehicles manufactured closer to the end customer. in fact, in the 10Q there is a mention that Model 3 GM's actually trended up in the quarter so this is already happening in Fremont. But, based upon the future revenue streams from normal upgrade cycles, supercharger fees, conversion to FSD of whatever is next, and other recurring subscription fees, being able to sell the car at a profit would be icing on the cake.
I get to read most of the Street's research on Tesla and I have not heard one analyst mention the software model potential as it relates to future revenue and earnings.
There are still a lot of things Tesla needs to clean up, stability at the C level, and IMO I would prefer Elon not be so hell bent on robo taxi's because there is a huge market of people who have no interest in that level of automation, and who would love to have a traditional Tesla. In pushing the curve too far, too fast there may be a big slice of the market who will not buy out of the fear of not understanding the car, and at the end of the day it is a car.
BRB, heading to the Dry Powder store to get some.
IMO, those people just THINK they are not interested. Most people will be clamoring for it once it's out and proven.
Electrician services to install a breaker and line sufficient for charging is usually a lot more than the charger itself.
Autonomous cars get more appealing when you have a car that has a huge screen up front playing YouTube and Netflix movies while you sit back and enjoy a cup of coffee on a one hour commute. People should be investing simply based on that tweet. Haha
CyberDutchie
Active Member
I love the price action today, hoping it holds. Would be nice to see Adam Jonas’ notes and opinions no longer abe to impact the stock price negatively.
X Fan
Active Member
Anyone see this? Elon Musk says Teslas will soon be able to stream Netflix and YouTube
Cost impact and of course could they monetize this capability (ie ads, etc.).
Cost impact and of course could they monetize this capability (ie ads, etc.).
anthonyj
Stonks
Agree.
If any serious analyst or investor took the time to pour over the 10Q, while there are still challenges, Tesla is not a screaming short. One of the biggest complaints a couple of the big shorts who are always on CNBC kept harping on was the inability to make the Model 3 at a decent margin, and the margin actually increased while discounts were given during the quarter.
One one hand I love that Elon more or less gives the middle finger to most of Wall St, but in the short run it definitely adds more agita in the short run. Just look at the ridiculous note from MS this morning.
In my opinion, the only way that happens is if one or more of three things occur:
1) Material amount of covering by shorts.
2) Accumulation by one or more institutions.
3) Some other positive fundamental development.
I don't think anything else would move the stock that significantly.
With that said, I expect the price to have trouble getting over the ~$242 mark as that's a technical indicator (mid bollinger band which has acted as a ceiling in the past), debate on the relevance of technicals notwithstanding. If it clears that line, that's pretty bullish.
EDIT: Also worth nothing that the opening price day after earnings was $233.50, and the high that morning was $234.50 -- so if the price moves above those levels, would seem to indicate that the market viewed the correction as an overreaction.
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This is the market at large finally calling BS on the latest FUD post earnings. If it continues, we will see shorts getting shaken out for sure. Where is the next catalyst for them to attack? And they are definitely low on actual share ammo at this point to continue pounding the bid. I believe smart shorts will unwind their positions here (if not already), pre China launch and truck reveals.
Less than two months away from a hand made car in Shanghai with much fanfare?
Less than two months away from a hand made car in Shanghai with much fanfare?
CyberDutchie
Active Member
Besides the update to Q3/Q4 unit forecast (and his pet-peeve “can they survive without another capital raise”), here are the other updates to the model:
Gross margin. We have taken down our full year auto gross margin forecast significantly, excluding $600mm of regulatory credits, to 17.4% from 19.6% previously. We forecast Tesla exiting 4Q with an 18.9% auto gross margin (ex. regulatory credits). We would note that for many years, Tesla management have targeted an auto gross margin of over 25% in a steady-state, but this quarter seemed to show an increased dependence on FSD take rates and regulatory credits to meet this target.
EPS. Our full-year 2019 US GAAP EPS estimate falls to negative $8.94 from negative $7.06 previously. Tesla continues to aim for positive GAAP net income in Q3 and in the quarters following. We do not forecast a return to profitability in any quarter this year and forecast Tesla returning to profitability in 2021.
Cash flow. Tesla targets positive operating cash flow less capex "with some exceptions" moving forward. Tesla shifted its capex target from $1.5bn-$2.0bn; we model $1.6bn for the full year. We forecast 3Q cash flow to be negative $566mm, partially due to the reversal of the positive working capital dynamic that was seen in Q2. While management targets positive free cash flow moving forward, their guidance did allow for significant volatility quarter to quarter.
JRP3
Hyperactive Member
The charger is built into the car. Different installations will have different costs but I installed a 240V 30A outlet on the side of my house for less than $50 and an hour of my time, including drilling through the concrete block foundation.
StealthP3D
Well-Known Member
Oh, no, this kind of tripe still impacts the share price negatively, it's just that the current underlying TSLA share price strength masks the effect. But I agree, the analysts who cried "big, bad wolf" too many times definitely get discounted by those who are paying attention. What happens is that organized and disciplined institutional investors start ignoring them but there will always be some "blind" investors that never really get the fact they are being lied to. Institutions that have strong research arms never pay attention to these clowns to begin with.
I have no respect for CNBC or most of their guests coming on Network, only thing out of this story is conservative investors like Kevin looking at TSLA and looking out couple more high volume product out of TSLA and they could be highly cash flow positive.
CNBC reporting Jon McNeill left Lyft. Wonder if there's any chance he goes back to Tesla or if he's moving on to a CEO position somewhere.
Is anybody think TSLA would earn any $ out of Netflix and You tube coming ? I know Google pays billions to Apple.
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