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Tesla crushes Q3 2019 results and returns to profitability

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Tesla’s (NASDAQ:TSLA) third-quarter earnings for 2019 saw the electric car maker post $6.3 billion in revenue, meeting Wall Street estimates. The results, which were discussed at length in an Update Letter, were released after the closing bell on Wednesday, October 23.

The following are the key points in Tesla’s Q3 Update Letter.

EARNINGS

Tesla shareholders saw earnings per share of $1.91. In contrast, analysts polled by FactSet expected Tesla to report an adjusted quarterly loss of $0.46 a share for Q3 2019. Estimize, a crowdsourced platform that aggregates estimates from analysts, executives, fund managers, and academics, expected Tesla to report an adjusted loss of $0.29 per share.

REVENUE

Tesla reported revenue of $6.3 billion for the third quarter. Analysts polled by FactSet expected Tesla to report sales of $6.45 billion in the third quarter, while Estimize placed Tesla at a slightly more optimistic $6.60 billion.

RELATED: Top 5 things Tesla (TSLA) investors want to know from the Q3 2019 earnings call

Overall, Tesla’s results are a pleasant surprise for supporters of the electric car maker. Even CEO Elon Musk, after all, proved tempered with his expectations for the third quarter, stating during the second-quarter earnings call that he expects a small loss in Q3 2019. The company’s vehicle delivery figures in Q3 did not help this case, as the company was unable to meet Elon Musk’s internal goal of delivering 100,000 electric cars in the third quarter, delivering around 97,000 vehicles during the quarter.

TESLA MODEL Y PRODUCTION

Apart from its encouraging financials, Tesla also shared a number of optimistic updates for its vehicles and its budding Energy business. The Model Y, a crossover SUV that is expected to be even more popular than the widely-successful Tesla Model 3, has had its estimated deliveries move up to Summer 2020. During the vehicle’s unveiling, Musk proved conservative, giving an estimate of Fall 2020 (about a year from now) for the Model Y to begin customer deliveries.

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GIGAFACTORY 3 PROGRESS

Tesla has also confirmed reports from China that Gigafactory 3 is progressing ahead of schedule. Previous reports from local media outlets have already hinted at this in recent months, and Tesla’s validation of these reports proved enough to shift the narrative back into the electric car maker’s favor.

“We are already producing full vehicles on a trial basis, from body, to paint and to general assembly, at Gigafactory Shanghai. We have cleared initial milestones toward our manufacturing license and are working towards finalizing the license and meeting other governmental requirements before we begin ramping production and delivery of vehicles from Shanghai,” Tesla stated.

TESLA SOLAR

Tesla’s Energy business also showed some growth in the third quarter. Long dormant and tempered compared to the company’s electric vehicle business, Tesla Energy has long been considered by skeptics as a neglected project. This has changed in the third quarter, with Tesla Solar installs moving up 48% compared to Q2 2019’s figures. These installations are further bolstered by new initiatives relating to the company’s energy business, such as the introduction of the Megapack, a massive 3 MW battery that could prove to be as disruptive as Tesla’s electric cars.

TESLA SEMI and GIGAFACTORY EUROPE

Tesla has been quite thin on updates surrounding the Tesla Semi, having focused more on Model 3. In its Q3 Update Letter, Tesla revealed that its all-electric long-hauler is poised to begin production in late 2020. An official announcement about the location of Gigafactory 4 in Europe is also expected to be released in 2021. “We are planning to produce limited volumes of Tesla Semi in 2020 and are hoping to announce soon the location of our European Gigafactory for production in 2021,” Tesla wrote.

As of writing, Tesla stock is up 21.03% at $ 308.25 per share in Thursday’s after-hours trading.

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Following is Tesla’s Q3 2019 Update Letter.

Tesla Q3’19 Update Letter by Simon Alvarez on Scribd

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Tesla called ‘biggest meme stock we’ve ever seen’ by Yale associate dean

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Credit: Tesla

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:

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“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.”

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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.

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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.

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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. 

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“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.

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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.”

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(Credit: Tesla)

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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