Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[sparcs]

We expect positive GAAP net income going forward, with possible temporary exceptions, particularly around the launch and ramp of new products.Continuous volume growth, capacity expansion, and cash generation remain the main focus.

Not sure how to take this in context with the GF3 ramp and now the Model Y ramp and the effects it has on Q1. Would this push S&P 500 addition to much later in the year?

 

[kbM3]

740 k / year installed production capacity by mid year. Not including plans to increase Giga Shanghai Model 3 production

 

[Right_Said_Fred]

Last quarter saw $85 million in forex profit (‘other income’). This quarter it was a $25 million loss. That alone had a negative impact of $110 million on net income compared to last quarter.

 

[azaz]

q1 might be a loss based on that wording

 

[TheTalkingMule]

Great to see Mike Santoli on CNBC not even be able to squeeze out a word on TSLA. He's just off screen fuming. Hilarious.

Opening sentiment was ARK saying "I told you so", last word was some analyst saying "we saw this with AMZN and GOOG".

 

[UncaNed]

Do we know what earnings per share is?

 

[Cosmacelf]

Uhhhhh guys...I hate to be a party pooper but I have it on good authority that Tesla will fall miserably short of this target: https://seekingalpha.com/article/25...-tesla-to-sell-500000-cars-in-2020-are-absurd

Nice to read a 2014 article and show how wrong people can be:

Why Projections For Tesla To Sell 500,000 Cars In 2020 Are Absurd
Sep. 17, 2014 11:12 AM ET
|

Logical Thought

Hedge fund manager, long/short equity, growth at reasonable price, value
Stanphyl Capital Management LLC
(1,829 followers)
Summary

The "sell-side" is forecasting that Tesla will sell 500,000 cars in 2020.

If Tesla sells 35,000 cars this year, 500,000 sales in 2020 would imply a six-year CAGR of 56%.

No complex product manufacturer has ever grown that quickly from a revenue base of $3 billion or more.

Wall Street's bullish projections for Tesla Motors Inc. (NASDAQ:TSLA) show the company accelerating from selling 35,000 cars this year (in 2014) to 500,000 cars in 2020, which would imply a six-year compounded annual...

 

[Todd Burch]

Looks...expected. I thought this level already priced in.
But congratulation to us all regardless!!

-Y production having already started was an unconfirmed rumor, probably not well-known or discarded by most outside our circle.
-Significantly-increased range for Y was a complete positive surprise.
-Lots of positive cash flow
-Solar growth probably not baked in, few "analysts" talk about it.

 

[Right_Said_Fred]

The target of 500,000 vehicle deliveries in 2020 should probably be easier to beat than the 360,000-400,000 of this year.

 

[Cherry Wine]

From the report:

"For full year 2020, vehicle deliveries should comfortably exceed 500,000 units. Due to ramp of Model 3 in Shanghai and Model Y in Fremont, production will likely outpace deliveries this year."

Someone care to explain that second sentence to me? Seems like a nonsequitor? And why would production outpace deliveries, or are they just pointing out that end of year, they'll have cars in transit?? I guess another reason is that they need to build up showroom cars, inventory for in store sales, etc. But why even mention it?

Yes, that statement stuck out to me as well.

 

[SoGA Fan Club]

Does know one here find the news that the Model Y has started production monumental?

I think we forget that the rest of the world doesn't hear all the rumors that we do. The Y starting production already will be a massive win for investors.

 

[woodisgood]

The numbers were good and Model Y confirmed for Q1. Let’s see what else Elon has to say...
Feel like he really wants to squish the shorts once and for all. If nothing more, that’s quite alright too.

PS. They didn’t really let Tasha say much on CNBC - “validates our thesis, Wright’s Law, autonomy...”

 

[Right_Said_Fred]

Margin on energy is down, likely caused by the price drop of solar panels. Margin on service is up though (less negative).

 

[Fobble]

Nice to read a 2014 article and show how wrong people can be:

Why Projections For Tesla To Sell 500,000 Cars In 2020 Are Absurd
Sep. 17, 2014 11:12 AM ET
|

Logical Thought

Hedge fund manager, long/short equity, growth at reasonable price, value
Stanphyl Capital Management LLC
(1,829 followers)
Summary

The "sell-side" is forecasting that Tesla will sell 500,000 cars in 2020.

If Tesla sells 35,000 cars this year, 500,000 sales in 2020 would imply a six-year CAGR of 56%.

No complex product manufacturer has ever grown that quickly from a revenue base of $3 billion or more.

Wall Street's bullish projections for Tesla Motors Inc. (NASDAQ:TSLA) show the company accelerating from selling 35,000 cars this year (in 2014) to 500,000 cars in 2020, which would imply a six-year compounded annual...

Has he joined the millionaire club yet?

 

[KarenRei]

I think the call is starting.....

ED: Or not. The sound dropped out, so I made bad assumptions

 

[mongo]

Check out that casting on the Model Y!

 

[EVNow]

The big difference I see compared to my model are
- Higher SGA +80M
- Subsidiary loss of $70M
- Non-Lease Auto margin higher 2% compared to Q3 !!
Resulting in 60M higher revenue but $110M lesser profit.

 

[ByeByeJohnny]

Among the pictures at the end there's a model Y called production vehicle. Does that mean it's a car they could actually deliver to a paying customer?

 

[Cherry Wine]

I sold my June 600 call and bought a couple 500 Puts for next week to make sure the SP keep rising after earnings....

Your sacrifice is appreciated.

Not sure how to take this in context with the GF3 ramp and now the Model Y ramp and the effects it has on Q1. Would this push S&P 500 addition to much later in the year?

Sounds like hedging / sandbagging to me. We may get some color to this statement on the call. Presumably, it would push S&P addition to June'ish, I think. @Fact Checking is the resident expert on such matters I feel.

 

[ReflexFunds]

I'm posting here given its a weekend, but if you have comments on the model please reply in the Earnings Projections Thread: Near-future quarterly financial projections

Q419 Earnings Estimates:

P&L
Revenue $7,325m (+$1,022m QoQ, +$100m YoY):

Gross Profit $1,430m
Opex $970m
Net Income $269m (+$58m YoY, +$118m QoQ)
GAAP diluted EPS $1.5, Non GAAP EPS $2.6:

Key Revenue & Margin Assumptions:

In this model I have kept Model 3 like for like production cost flat QoQ. This excludes credit revenue, one off software upgrades (Acceleration boost), deferred FSD recognition and China one off ramp costs which have all been broken out separately.
I think flat production cost QoQ is likely conservative - Tesla has consistently reduced production costs QoQ & > production drives > margins (fixed cost leverage, < staff hours/car, supplier scale saving passed on). Main risks are larger one off GF3 headwind & more +ve one offs in Q

Cash Flow
Operating Cash Flow: $1,476m ($1,031m before Working Capital)
Free Cash Flow: $976m

My cash flow statements use different presentation & include many estimates for past Q line items but Operating Cash Flow & Free Cash Flow for Q4 uses Tesla definition.
My Cash Gross Profit Line = Gross Profit plus non cash cost addbacks for Depreciation, Warranty Reserve and Net Deferred Revenue

Net debt down $871m QoQ to $6,266m.
Net debt/EBITDA down to 2.6x from 4.4x at 4Q18.
Net recourse debt down more than half YoY to $1,765m from $3,702m at 4Q18. This includes $4,200m converts which are all in the money (but not convertible until 3 months before maturity).

Q4 Total Liquidity: $9,666m.
Including $6,233m unrestricted cash and $3,433m undrawn bank lines.
I would expect to see credit rating upgrades after Q4.

Great report from Tesla and good progress on Model Y!
Q4 vs my estimates:
Revenue $7.4bn (E $7.3bn)
Auto Gross Profit $1.4bn (E $1.4bn)
Operating Cash Flow $1.4bn (E $1.5bn)
Free cash flow $1.0bn (E$1.0bn)
Cash balance $6.3bn (E $6.2bn)
GAAP diluted EPS $0.6 (E $1.5)

Net income was below my forecast driven mostly by one off & unimportant factors:
Vs my model:
Gross Profit -$51m, (Auto +$6m, Lease -$9m, Service +$6m, Energy -$54m - likely solar roof ramp)
SG&A -$74m (due to $82m higher stock based comp QoQ, i guess due to forecasting higher profits and starting to reserve for more future bonus rewards. It could also have been impacted by the higher share price.)
R&D $0
Other/FX -$25m
Other non controlling -$27m