📈 TESLA EARNINGS TONIGHT ...READ THIS

Tesla will be releasing earnings Wednesday October 18th at 4:05 PM. We are looking for the following:

Revenue of $24.26 Billion

Earnings of $ .75 cents

For a better understanding of what to expect. Let’s take a look at last quarters earnings.

Tesla announced Q2 2023 earnings on July 19, 2023. Following the release of earnings, the stock dropped over 10% and has since been hovering around a $250 share price.

The Report

Key takeaways from the previous earnings report are as follows:

• Total Revenue: 24.9B (up 47% YoY)

• Earnings per share: $0.91 (beating estimate of $0.69)

• Gross margin: 18.2% (down from 25% Q2 2022)

• Net Income: $2.7B (up 20% YoY)

• Operating Income: $2.4B (-3% YoY)

• Model S/X Production: 19.5K (up 19% YOY)

• Model 3/Y Production: 460K (record quarter and up 90% YoY)

• Model S/X Deliveries: 19.2K (record quarter and up 19% YoY)

• Model 3/Y Deliveries: 447K (record quarter and up 87% YoY)

In sum, Tesla posted record vehicle production and deliveries this quarter. However, their margins shrunk due to a decreasing average sales price per vehicle and rising supply-chain related expenses.

The Earnings Call

Key notes from Elon Musk’s update at the earnings call are as follows: 

• Model Y became the best-selling vehicle of any kind in Q1

• Q3 production is expected to slow due to factory shutdowns for upgrades

• Future expectation is for FSD to be 10x safer than human driving

• Using Dojo supercomputer to train robotaxis with FSD capability

• Cybertruck models are being built in Giga Texas

• Global supercharging network (NACS) has been adopted by Ford, GM, Mercedes and other brands

• Tesla is in talks with a large OEM to license their FSD technology

The Reaction

Upon the earnings release, the stock remained flat but dropped during the conference call. Drivers of the drop in stock price can be attributed to:

• Declining margins underscoring a need to continue cost reduction measures

• Investors were expecting an update on delivery dates for the long-anticipated Cybertruck and robotaxi, which they did not receive

• Elon Musk also mentioned that he expects Q3 vehicle production to slow down vs. Q2 due to temporary factory shutdowns to accommodate factory upgrades.

Analysts’ reactions to the earnings report were mixed:

• Wedbush increased their price target from $300 to $350

• UBS downgraded the stock and updated their price target to $270

What’s Happened Since?

Since Tesla’s earnings release on July 19th, the stock hasn’t moved notably. The day after earnings release, the stock closed at $262.90/share. Most recently, the stock closed at $248.50 as of September 9th. 

Considerable news has been released since the last earnings call:

• Tesla Giga Shanghai increased deliveries by 87.5% YoY in August, per China’s CPCA.

• Tesla is said to introducing a new $25,000 model to capture more price-sensitive consumers

• The company is making progress in introducing their “robotaxi,” which will feature no pedals, mirrors, or steering wheel, and will be fully reliant on FSD.

• FSD12 marks a departure from previous FSD technology as Tesla has changed their approach toward machine learning. As opposed to having driving decisions follow a “rules-based” approach that relies on the obstacles identified by the car’s cameras and sensors, their new system is being trained on video of real human driving behavior which the company believes will greatly improve their self-driving technology.

• Tesla has cut prices in China by over 6% due to rising competition and declining sales in the region

What’s Next?

Investors have a number of questions they hope will be answered in Tesla’s Q3 2023 earnings report, which is set to release on October 18, including:

• Update on cost-cutting efforts amidst shrinking margins

• Cybertruck release date

• Robotaxi and $25K model release date

• FSD12 progress and potential regulator approval

• Potential licensing of FSD technology to other OEMs

For those that want to listen to the conference call at 5:30 EST Wednesday click the link. Conference Call If you want more fundamental research reports like this one please comment and let us know.!

Wishing Everyone Massive Success!