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

[Gigapress]

Why Analyst Projections of $7 FY2022 Earnings are Ridiculous

​

Profits will be flooding in this year.

Deliveries are rising. Selling prices are rising while cost is falling. Operating expenses are barely budging.

Hertz/Tom Brady exposure. FSD Beta improvements & Dojo. New factory hype. Tightening ICE emissions regulations. Cybertruck mania. Profound awakening to the desirability of EVs.

We are living in the golden goose scenario already. Back when Tesla was "structurally unprofitable" bulls always looked at the gross margins of 30% and thought wow just wait until this company hits scale!

We're at scale now, and the gross margins here are better than expected.

	Bear	Base	Bull
Deliveries	1.5M	1.7M	2.0M
Avg Price	$57k	$60k	$63k
Gross Margin	31%	34%	37%
Operating Expenses	$9B	$8B	$7B
EBIT	$18B	$27B	$39B

This is not investment or financial advice, just my thoughts.

 

[Skipdd]

but I would strategically sell covered calls in those accounts.. pick what you are okay with parting with as a percentage of the overall managed portfolio assets, since its tax advantaged, if they get called you can just re=buy if you like with the available funds. pick and chose what event horizon you are targeting, earnings, fed announcements, etc.. with a decent CC strategy you should be able to easily boost overall portfolio performance by 4-6% a year nominal just by selling against ~20% of the portfolio and targeting 60-90 days periods.. so less work, LESS overall return but a nice way to measurably bump return

I can attest to this strategy. Financial Advisor used it to grow my mother’s income in retirement. That was well before I had the knowledge or means to help.

 

[WattsHappening]

Sugar! Elon is in my head. Just had the first serious conversation with the wife about upgrading to FSD. I’ve got some serious FOMO here people.

Convince us we shouldn’t. Go.

Sugar! is right. I don't like paying for promises, which is why we didn't order initially, and why we have been ok with price increases and not feeling like we're missing out.

But it feels so much closer now. And we don't know what monthly subscription costs are going to be in the future. If I could be sure the monthly cost would be $200, I'd for sure skip the upgrade now and pay monthly when the time comes. But who knows, it could be $300 or higher, and most likely increase over time.

So I'm also experiencing serious FOMO. So no, I can't be convincing in arguing you shouldn't upgrade; you absolutely should! We have another week of trading before the price increase. It will sure be easier to hit the 'upgrade' button if the SP is at $1,200 next week.

 

[jw934]

Seemingly random date for a price increase?

It is likely based on Elon promised to provide more notice of FSD price increases. The last time (or the one before that), he only gave 2 or 3 days notice. Chats back and forth on twitter resulted in Elon pushing back the price increase by a few days to give owners/orders more time to buy/add prior to the increase. My guess is he's learned from that - to increase the price asap, but no sooner.

 

[Krugerrand]

https://www.washingtonpost.com/business/on-small-business/covid-fraudster-who-bought-property-tesla-stock-with-stolen-cash-is-caught/2022/01/07/ab080920-6fe8-11ec-b1e2-0539da8f4451_story.html

"Hundreds of people have been prosecuted for falsely obtaining taxpayer-backed funds from plans intended to help small businesses during the pandemic, such as the Paycheck Protection Program. Many of them spent the money, and prosecutors were able to recover only a fraction of it. But that wasn’t the case with Lloyd, where the government got back a lot more than he scammed.

"Lloyd, 51, got about $3.4 million by filing fake applications in the names of businesses owned by relatives and associates, all without their knowledge, according to court records. . . .

"But his biggest windfall came with his 2020 purchase of 15,740 shares of Tesla using government money and a loan from Charles Schawb secured by equities he’d purchased with the stolen cash.

"Tesla’s stock has skyrocketed since then, handing investors returns of about 50% last year alone. Lloyd’s investment was worth more than $11 million at the time agents seized his shares in January last year, and $16.8 million at the close of trading Thursday.

“Lloyd transferred over $1.8 million of the PPP funds to his E*TRADE Securities brokerage account and purchased securities,” prosecutors said in a court filing. “Fortunately for the government, and for Mr. Lloyd’s restitution obligation discussed below, the value of those securities increased exponentially.”

I almost can’t be mad at him.

 

[Cattledog]

Amateur assessment here - seems like the incredible amount of 1/21 Options creates the huge question of what does the stock price do over the next 9 trading days (MLK Day, 1/18 is a trading national holiday). After 1/21, with earnings 1/26, seems slightly >50% odds we are up and to the right. Not an advice. Where's TrendTrader when we need him?!

 

[MC3OZ]

Permit specifically says can't sell those 2000 cars

Still I wonder if they could be sold, once they have a full permit.

If the car produced under the trail permit is identical to the car produced under the full permit.

My thoughts would be that if they never got a full permit then the cars could never be sold, otherwise maybe they can eventually be sold.

 

[insaneoctane]

Just a slow and steady earned reward is what I’d suspect he’d prefer. Heck it’s what we should all prefer unless we’re looking for the exits soon or speculating/trading.

You could even make the argument that of the extremes in share price swings, a wildly exuberant stock price is now actually more detrimental to a cash-rich and massively expanding Tesla than a depressed stock price. It a) may dampen recruiting efforts, especially where top talent is required e.g. robotics and b) may cause increased turnover as employees are able to retire early. I love personal stories of financial freedom as much as anyone, but Tesla also needs to retain at least some talent for continuity and leadership. Otherwise for talented engineers the whole thing turns into: do a short tour of duty at Tesla and then retire/pursue other passions. If that cycle is too short then you have a talent retention problem. How many will keep grinding away at the mission after not needing to work a real job anymore? Probably not as many as you’d like.

Let's not forget Elon doesn't need the money yet. Most agree he's building his war chest of wealth to fund Mars. Won't need that for many years and pushing the SP higher and higher not only causes reward issues with current and future Tesla employees to deal with, but it puts unneeded attention on Elon and his massive wealth (and his taxes!). I agree that Elon has no reason to want to see the stock spiking quickly. Smooth and steady. (Although he does like a good short burn!)

 

[Webeevdrivers]

Sugar! Elon is in my head. Just had the first serious conversation with the wife about upgrading to FSD. I’ve got some serious FOMO here people.

Convince us we shouldn’t. Go.

We did. Again. But you have to ask yourself if you are okay with the basic features that it provides compared to the “coming soon” features like FSD city. Full FSD has been coming in a few months for 6 years. Who knows when it will arrive. I would like to see a solid level 2 or 3 system in the next year or two. I think full autonomous L4 or 5 is probably end of this decade.

Just my humble opinion and it’s definitely not popular here.

 

[insaneoctane]

Your guess would be correct, for now! Sub price will increase with FSD wide release.

https://twitter.com/x/status/1479596403487916032

Bullish IMO
One possible bullish explanation is a new upcoming build of FSD beta (10.9?) may be significantly better....

 

[insaneoctane]

Sugar! is right. I don't like paying for promises, which is why we didn't order initially, and why we have been ok with price increases and not feeling like we're missing out.

But it feels so much closer now. And we don't know what monthly subscription costs are going to be in the future. If I could be sure the monthly cost would be $200, I'd for sure skip the upgrade now and pay monthly when the time comes. But who knows, it could be $300 or higher, and most likely increase over time.

So I'm also experiencing serious FOMO. So no, I can't be convincing in arguing you shouldn't upgrade; you absolutely should! We have another week of trading before the price increase. It will sure be easier to hit the 'upgrade' button if the SP is at $1,200 next week.

Depends on what you want. The current product isn't worth $10K (or $12K). The "smarter" move is to take your $10K and buy 10 shares of TSLA until FSD is out of beta (quite awhile IMO). I suspect the SP will outpace Tesla's FSD price raises.

On the other hand, I have beta FSD because it's fun to keep tabs on the actual bleeding-edge product and to monitor the progress and I don't mind funding the mission a little

 

[StarFoxisDown!]

https://twitter.com/x/status/1479611968587718657

I was openly asking myself earlier today when we would see the Energy side of Tesla show it's hand. The Lathrop Megapack facility broke ground in Sept. Recently, they added a ton of parking for new employees there. I would have to imagine that they're set to ramp production in late Q1 or Q2 and maybe the Energy side is materially adding to Tesla's revenue and profits by Q2 or Q3 with 2023 being the breakout year of Energy.

 

[Discoducky]

Sugar! Elon is in my head. Just had the first serious conversation with the wife about upgrading to FSD. I’ve got some serious FOMO here people.

Convince us we shouldn’t. Go.

I'd say, it is not the best experience right now if you value smoothness. For instance, my wife does not like FSD. I love it, but I'm kinda biased

 

[bpjod]

Still I wonder if they could be sold, once they have a full permit.

If the car produced under the trail permit is identical to the car produced under the full permit.

My thoughts would be that if they never got a full permit then the cars could never be sold, otherwise maybe they can eventually be sold.

Can’t sell ’em? Fine. Stick ‘em in a tunnel somewhere and hit the “Print Money” button.

 

[bkp_duke]

https://twitter.com/x/status/1479611968587718657

I was openly asking myself earlier today when we would see the Energy side of Tesla show it's hand. The Lathrop Megapack facility broke ground in Sept. Recently, they added a ton of parking for new employees there. I would have to imagine that they're set to ramp production in late Q1 or Q2 and maybe the Energy side is materially adding to Tesla's revenue and profits by Q2 or Q3 with 2023 being the breakout year of Energy.

This is huge. The article mentions CATL prismatic LFP for these products. That would be a fantastic upgrade over the current product.

I am gobsmacked by the $22B number . . . in 2 years. This should completely change everyone's earnings estimates.

 

[Singuy]

This is huge. The article mentions CATL prismatic LFP for these products. That would be a fantastic upgrade over the current product.

I am gobsmacked by the $22B number . . . in 2 years. This should completely change everyone's earnings estimates.

It's just about what Tesla made for the entire year of 2019. No big deal...Tesla energy is worth 0 dollars...lol

 

[⚡️ELECTROMAN⚡️]

One good thing about selling off a significant chunk of TSLA in late 2020, and diversifying, is now I have a lot of crappy stocks I don't mind selling to buy these dips.

 

[BornToFly]

Here's a thought. Before increasing the price of FSD to $12k, how about you at least release Beta to everyone that paid for it already, like 2.5 years ago, and has had a safety score of 99 and now 100 for over a month....

 

[BitJam]

The current product isn't worth $10K (or $12K). The "smarter" move is to take your $10K and buy 10 shares of TSLA until FSD is out of beta (quite awhile IMO). I suspect the SP will outpace Tesla's FSD price raises.

This is what I did last summer. So far: SP up 32%, FSD up 20% (as of January 17 increase to $12k). My guess is SP will outpace FSD by at least two to one.

 

[Boomer19]

s&x are going to skyrocket in 2022
they only did a bit less than 25k in 2021

the 2022 S&X will surely offset any initial negative margin impact from
brandenburg and austin as they book
———
plus mega pack factory should improve generation and storage margins, as large scale is currently the focus in that segment

TE had 800m rev
800m cost (~0 margin) in q3
- that will improve slightly as we move forward
———-
larger chucks of fsd take up will start being booked (potentially second half of year or ‘23 ??) as beta turns into prod
———
and insurance will continue to be added in more states
——-
op margin will benefit

so TE will finally make a splash in ‘22 (…not a tidal wave, patience)

megapack lathrop and battery sourcing will help create the efficiency needed to gradually increase margins in that segment. i look for 1b in a quarter as the first watermark. hopefully we’ll see 5-10% margins at first, at that level of scale. then 15-20% and onward (although this could be a while…or will it?). batteries obv still the limiting factor. but the news discussed above is a welcomed arrival!