Investor's Corner
Tesla Earnings: What to Expect

This is a brief update on a few things to watch in Wednesday release of quarterly results and subsequent conference call with company officers.
Model X Deliveries
Tesla reported deliveries of 2,400 Model X vehicles in Q1, below their expected projections, due to supplier part shortages. Tesla stated that “once these these issues were resolved, delivery rates improved dramatically.” But just this weekend, in response to a customer that complained that his Model X 90D, promised by April 15, still had no ETA, Elon Musk tweeted “Have been reviewing end of line production quality personally. Slowed things down temporarily, but its’s for the Best.”
@MacTechGenius @SacEV Have been reviewing end of line production quality personally. Slowed things down temporarily, but it's for the best.
— Elon Musk (@elonmusk) May 1, 2016
Elon response tells me that there are still production quality issues with the Model X and as a result delivery has “slowed down” even in Q2. A second consecutive quarter of Model X deliveries slower than expected would likely affect the annual sales goal of 80,000 to 90,000 for 2016, one of the closest-watched metrics, since it correlates to both the amount of cash needed and the expectation of being able to scale the business, and obtain higher margins.
Analyst Sentiment
Of the top 16 analysts listed on TipRanks covering Tesla, 8 rate the stock as a BUY, 6 as a SELL and 2 as a HOLD (tipranks.com). Only one, Patrick Archambault of Goldman Sachs, recently upgraded its price target to 245, on “Model 3 order strength.” All others reiterated their target, with an average of $244.
Earnings
The consensus estimate is a per share $ -.57 loss for the quarter. Tesla has a mixed record regarding beating or missing estimates. Zacks Equity Research reports that “Tesla delivered mixed earnings surprises in the last four quarters. It outperformed in two and missed the other two.”
On the other hand, a miss does not seem to affect TSLA as it does other hi-tech stocks like Apple, Netflix, or Google. While Tesla missed the consensus on 4th quarter 2015 earnings, reported on February 10, on that date it started a 78% run to $269.
Short-Term Action
During the past month, TSLA stock has been in “compression”, i.e. without much direction, up or down, hovering between 240 and 260. Moreover, on several occasions, the stock has changed by over $10 during the same session. This type of behavior makes TSLA fairly difficult to trade as there is no momentum, and the stock can swing back and forth fairly quickly. These are periods where I stay out of trying to trade TSLA and look for other more predictable stocks.
Now this latest behavior in TSLA stock was to be expected after such a dramatic move as we had in February and March, and it is actually “healthy” for the stock. After such an incredible run, a cool period, and possibly even a drop, is needed to refuel the bulls.
Live Q&A Webcast
Join the webcast on May 4 at 2:30pm Pacific Time, where officers will discuss the Company’s financial and business results and outlook.
I’ll be listening to the Webcast and will report on my analysis in my next post.
Elon Musk
Tesla called ‘biggest meme stock we’ve ever seen’ by Yale associate dean

Tesla (NASDAQ: TSLA) is being called “the biggest meme stock we’ve ever seen” by Yale School of Management Senior Associate Dean Jeff Sonnenfeld, who made the comments in a recent interview with CNBC.
Sonnenfeld’s comments echo those of many of the company’s skeptics, who argue that its price-to-earnings ratio is far too high when compared to other companies also in the tech industry. Tesla is often compared to companies like Apple, Nvidia, and Microsoft when these types of discussions come up.
Fundamentally, yes, Tesla does trade at a P/E level that is significantly above that of any comparable company.
However, it is worth mentioning that Tesla is not traded like a typical company, either.
Here’s what Sonnenfeld said regarding Tesla:
“This is the biggest meme stock we’ve ever seen. Even at its peak, Amazon was nowhere near this level. The PE on this, well above 200, is just crazy. When you’ve got stocks like Nvidia, the price-earnings ratio is around 25 or 30, and Apple is maybe 35 or 36, Microsoft around the same. I mean, this is way out of line to be at a 220 PE. It’s crazy, and they’ve, I think, put a little too much emphasis on the magic wand of Musk.”
Many analysts have admitted in the past that they believe Tesla is an untraditional stock in the sense that many analysts trade it based on narrative and not fundamentals. Ryan Brinkman of J.P. Morgan once said:
“Tesla shares continue to strike us as having become completely divorced from the fundamentals.”
Dan Nathan, another notorious skeptic of Tesla shares, recently turned bullish on the stock because of “technicals and sentiment.” He said just last week:
“I think from a trading perspective, it looks very interesting.”
Nathan said Tesla shares show signs of strength moving forward, including holding its 200-day moving average and holding against current resistance levels.
Sonnenfeld’s synopsis of Tesla shares points out that there might be “a little too much emphasis on the magic wand of Musk.”
Elon Musk just bought $1 billion in Tesla stock, his biggest purchase ever
This could refer to different things: perhaps his recent $1 billion stock buy, which sent the stock skyrocketing, or the fact that many Tesla investors are fans and owners who do not buy and sell on numbers, but rather on news that Musk might report himself.
Tesla is trading around $423.76 at the time of publication, as of 3:25 p.m. on the East Coast.
Elon Musk
Elon Musk affirms Tesla commitment and grueling work schedule: “Daddy is very much home”
The remarks came as Tesla shares crossed the $400 mark on the stock market.

Tesla CEO Elon Musk reiterated his commitment to the electric vehicle maker and its future projects this week, responding to speculation following his $1 billion purchase of TSLA stock.
The remarks came as Tesla shares crossed the $400 mark on the stock market, extending a rally fueled in part by Musk’s TSLA purchase.
Elon Musk’s nonstop work schedule
Amidst the reaction of TSLA stock to Musk’s $1 billion investment, Tesla owners such as @greggertruck noted that “Daddy’s home.” Musk replied, stating that “Daddy is very much home.” He then shared details of a packed weekend of work, which was definitely grueling but completely within character for a “wartime CEO.”
Musk did note, however, that he had lunch with his kids during the weekend despite his extremely busy schedule.
“Daddy is very much home. Am burning the midnight oil with Optimus engineering on Friday night, then redeye overnight to Austin arriving 5am, wake up to have lunch with my kids and then spend all Saturday afternoon in deep technical reviews for the Tesla AI5 chip design.
“Fly to Colossus II on Monday to walk the whole datacenter floor, review transformers and power production (excellent progress), depart midnight. Then up to 12 hours of back-to-back meetings across all Tesla departments, but with a particular focus on AI/Autopilot, Optimus production plans, and vehicle production/delivery,” Musk wrote in his post.
Wartime CEO
Wedbush analyst Dan Ives described Musk as operating in “wartime CEO mode,” highlighting autonomous driving and AI as a trillion-dollar market opportunity for Tesla. Musk reiterated this point late last month as well, when he outlined the several projects he is juggling among his numerous companies. At the time, Musk stated that he was busy with Starship 10, Grok 5, and Tesla V14. This was despite his notable presence on X.
With Tesla Master Plan Part IV being partly released, the company is entering what could very well be its most ambitious stage to date. To usher in an era of sustainable abundance, Tesla would definitely require a “wartime CEO,” someone who could remain locked in and determined to push through any obstacles to ensure that the company achieves its goals.
Elon Musk
Tesla analyst says Musk stock buy should send this signal to investors
“With Musk’s (Tesla stock) purchase, combined with the upward momentum for delivery expectations and robotaxi rollout, we are becoming more bullish.”

Tesla CEO Elon Musk purchased roughly $1 billion in Tesla shares on Friday, and analysts are now breaking down the move as the stock is headed upward.
One of them is William Blair analyst Jed Dorsheimer, who said in a new note to investors on Monday that Musk’s move should send a signal of confidence to stock buyers, especially considering the company’s numerous catalysts that currently exist.
Elon Musk just bought $1 billion in Tesla stock, his biggest purchase ever
Dorsheimer said in the note:
“With Musk’s (Tesla stock) purchase, combined with the upward momentum for delivery expectations and robotaxi rollout, we are becoming more bullish. This purchase is Musk’s first buy since 2020. To us, this sends a strong signal of confidence in the most important part of Tesla’s future business, robotaxi.”
Musk putting an additional $1 billion back into the company in the form of more stock ownership is obviously a huge vote of confidence.
He knows more than anyone about the progress Tesla has made and is making on the Robotaxi platform, as well as the company’s ongoing efforts to solve vehicle autonomy. If he’s buying stock, it is more than likely a good sign.
Tesla has continued to expand its Robotaxi platform in a number of ways. The project has gotten bigger in terms of service area, vehicle fleet, and testing population. Tesla has also recently received a permit to test in Nevada, unlocking the potential to expand into a brand-new state for the company.
In the note, Dorsheimer also touched on Musk’s recent pay package, revealing that William Blair recently met with Tesla’s Board of Directors, who gave the firm some more color on the situation:
“We recently participated in a meeting with Tesla’s board of directors to discuss the details of Musk’s performance package. The board is confident of its position in the Delaware case and anticipates a verdict by end of year. It does not expect a similar situation to occur under new Texas jurisdiction. Musk has the board’s full support, and we expect he’ll get more than enough shareholder support for this to pass with flying colors.”
Tesla stock is up over 6 percent so far today, trading at $421.50 at the time of publication.
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