Thinking about Q1 2013 earnings

[luvb2b]

And even with a positive earnings call an upward pop isn't guaranteed. The main question is how much potential is already priced in? If TSLA comes in $.07 with good guidance the stock could still take a good hit.

i know the stock has priced a lot. however the analysts still appear to be offsides here with estimates that are way far back of what could happen. take a look at the yearly figures for example. still quite low. 0c for next quarter is the current estimate.

in my opinion the keys will be a modest or better beat vs. current expectations (which have come to at least match the given guidance) and then the most important piece: guidance. with solid commentary for the coming quarter and bullish talk on the demand side i doubt very many institutions will be looking to get out. if the guidance is lukewarm, all hands down below to man the bilge pumps.

 

[Zythryn]

This. The only question is whether there will be a pop after the announcement, and what it's magnitude will be. After that, I expect the stock to normalize at a lower level.

Could be wrong, since it is a judgement call as to how much of Tesla's potential future earnings you want to bring forward to balance against their potential for medium term failure (short term failure is no longer possible).

I would never say short term failure is not possible. All sorts of things could happen. I would say short term failure is much less likely than it was.

 

[CapitalistOppressor]

I would never say short term failure is not possible. All sorts of things could happen. I would say short term failure is much less likely than it was.

Well yes. I suppose I was talking about in relation to the dominant thesis back in July and August 2012 when Tesla was presumed to be in a cash crunch with bankruptcy or a terrible secondary and then bankruptcy being the very near term expectation.

Under current conditions I wouldn't rule out a meteor hitting Fremont next week, but outside of something like that I suspect that a bankruptcy filing at the end of June is not going to happen.

 

[mitch672]

I wouldn't rule out a meteor hitting Fremont next week.

This must be what the "investors" who are still short TSLA must be hoping for... That or aliens making initial contact soon, and they take our brightest people (looking at Elon here)

 

[kenliles]

Under current conditions I wouldn't rule out a meteor hitting Fremont next week, but outside of something like that I suspect that a bankruptcy filing at the end of June is not going to happen.

Might be SpaceX has the meteor thing covered as well

 

[luvb2b]

everyone try to keep in the back of your minds the stock has moved almost 70% in about 7 weeks. the market cap has increased by a few billions when the earnings beat is likely to be just a few millions.

even a good report might see a short term selloff. or it might not.

as i mentioned earlier, my hope is for excellent guidance which will make life very interesting indeed!

 

[avatar]

And even with a positive earnings call an upward pop isn't guaranteed. The main question is how much potential is already priced in?.

Maybe I'm just way too bullish. I still think that the market has not priced anything in. There is rampant misinformation out there. Until there is a formal P/E that people can use to frame the discussion in lay mans terms that market is just projecting noise. I'm betting that once a formal P/E exists there will be a realization amongst a critical mass of buyers that a fundamental case for Tesla at $80 - $130 exists today. No gimmicks (credits etc) needed.

Elon needs to show that there isn't a demand problem for tesla (i don't think there is) and we are in the clear. The math for future cashflows is childishly simple. You can discount that back and get the $80 - $130 current price valuation. Done and done.

 

[ShortSlaver]

even a good report might see a short term selloff. or it might not.

as i mentioned earlier, my hope is for excellent guidance which will make life very interesting indeed!

Exactly. I'm cautiously optimistic, especially since this nugget just came in:

"Tesla has delivered over 10,000 electric vehicles to customers in 31 countries."

This was in the footer of their latest email.

The email they sent out last Friday after the update to financing was this:

"Tesla has delivered almost 10,000 electric vehicles to customers in 31 countries."

This is good.

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Maybe I'm just way too bullish. I still think that the market has not priced anything in. There is rampant misinformation out there. Until there is a formal P/E that people can use to frame the discussion in lay mans terms that market is just projecting noise. I'm betting that once a formal P/E exists there will be a realization amongst a critical mass of buyers that a fundamental case for Tesla at $80 - $130 exists today. No gimmicks (credits etc) needed.

Elon needs to show that there isn't a demand problem for tesla (i don't think there is) and we are in the clear. The math for future cashflows is childishly simple. You can discount that back and get the $80 - $130 current price valuation. Done and done.

You could be right. An email announcing Chris Porritt came out today and then the stock jumped. This was known information. Who knows? Like I said, I'm cautiously optimistic but have no idea what the market would consider good at this point. I'm expecting good news.

 

[avatar]

Lol- we might close at $59. incredible.

 

[kenliles]

Lol- we might close at $59. incredible.

Not that low. Almost made $60. And AH trade made $60!

 

[CapitalistOppressor]

everyone try to keep in the back of your minds the stock has moved almost 70% in about 7 weeks. the market cap has increased by a few billions when the earnings beat is likely to be just a few millions.

even a good report might see a short term selloff. or it might not.

as i mentioned earlier, my hope is for excellent guidance which will make life very interesting indeed!

Very much this. +1000000

This isn't about fundamentals. It's about bull psychology and the short squeeze. We need a strong report to keep the pressure on the shorts, but it might be that they need a really weak report to hammer the stock back into the low $40's and allow them to exit. It's nice to say the pro-psychology might lose some steam, but the shorts are under extreme pressure even at prices 15-20% lower than they are now. Who knows what a good, but not great report will do.

 

[DonPedro]

We need a strong report to keep the pressure on the shorts, but it might be that they need a really weak report to hammer the stock back into the low $40's and allow them to exit. It's nice to say the pro-psychology might lose some steam, but the shorts are under extreme pressure even at prices 15-20% lower than they are now. Who knows what a good, but not great report will do.

I think a key part of this psychology is: If you are a short, do you have the cool to wait to the low 40s to cover? You've been sweating bullets for weeks, wishing when it reached 48 that you'd covered at 45, at 53 you cursed not getting out at 50 and so forth. With the volatility here - will you not settle for 50 and cut your losses?

At the same time I see reports all over this forum and others by people who took profit and now are looking for a way back in. Will they feel that 50 is a sweet deal by now? My guess is yes.

I do not rule out hitting 40 next week, but unless the Q1 report has some obviously bad news I think that there will be a lot of resistance around 50 from shorts and longs both.

 

[raymond]

even a good report might see a short term selloff. or it might not.

I couldn't have put it better myseld. :smile:

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It could also move into the $60.00's.

Am I the only one thinking this is funny as this post is less than a day old?

 

[Jonathan Hewitt]

Am I the only one thinking this is funny as this post is less than a day old?

There's a post from someone in the yahoo TSLA message boards from 2 months ago (March) telling people to buy the stock as it will reach $60 within 2 years. A guy resurrected the post and told the guy he was really off

 

[avatar]

t minus 5 minutes. Usually they post the shareholders letter by now. I wonder why it's not out yet.

 

[Jonathan Hewitt]

t minus 5 minutes. Usually they post the shareholders letter by now. I wonder why it's not out yet.

You're 1 day early

 

[Johan]

You're 1 day early

Love the enthusiasm though! :-D

 

[avatar]

hahahhahaha! Yes indeed. That's embarrassing :redface: - oh well - to tomorrow! :tongue: I guess I can wait another day for Elon to crush the shorts

 

[smorgasbord]

OK, time to hazard a guess, just for fun:

While there will be lots of good news coming today, I wouldn't be surprised if the market gets spooked by the declining reservation backlog. That has always been the cushion to show that demand for Model S won't plummet like it has for other EVs (even though some have recovered from their lows). Shorts will point to the low reservation count as indication that Tesla is running out of customers, and so they'll hold on for another couple of quarters. People who don't fully believe will get scared and sell to take what profits they have. Only those, like us, who really "get it" will understand that Tesla has to move towards a more typical "want a car, buy a car, get a car soon" sales cycle.

However, I expect that the reservation backlog overseas is quite strong. I think demand for Model S in European countries with high gas prices and other huge tax incentives will stroke demand for Model S. Heck, even Fisker had some traction there for a while. So that could compensate in total, but shorters will still point to "shrinking demand in the US."

At any rate, I don't expect a short squeeze this week.

 

[Citizen-T]

I expect TSLA to be down pretty hard tomorrow. I just can't imagine a credible scenario where they can exceed the expectations that are built into the current stock price. At least not on reported numbers. The only thing that I can see making a rally happen from here is superb guidance. I'm not quite sure what that guidance looks like though.

I think smorg is right though. Focus is going to be on the reservation backlog and the margins (sans credits). I don't have any better visibility into either of those than anyone else, which makes me nervous.