Tesla [TSLA] FUD: The Earnings Are Coming!
Credit to Author: Frugal Moogal| Date: Wed, 23 Oct 2019 04:30:17 +0000
Published on October 23rd, 2019 | by Frugal Moogal
October 23rd, 2019 by Frugal Moogal
The goal of this series is to examine current topics being written about Tesla [TSLA] that appear to be stirring up “Fear, Uncertainty and Doubt” (or FUD). The plan is to try to provide reasonable analysis about the validity of the claims. I generally do not link to the articles that “inspire” me to write this, as I do not wish to reward analysis I feel is poor with increased traffic. However, I will freely admit that my analysis may contain incorrect assumptions, and will do my best to acknowledge them in future articles.
There are a slew of articles right now telling wildly different stories about what we should expect when Tesla reports its earnings on October 23rd after the bell. Articles have ranged from negative spin to positive spin. The negatives mostly seem centered around wondering if Tesla’s revenues may have gone down as the product mix became more Model 3-centric, and the positives are about how many analysts have been revising their earnings expectation up lately.
I thought I’d share my quick expectations on what I will and won’t be looking for tomorrow.
Before I dive into that, my (updated!) boilerplate:
As of a recent article, I purchased an additional 7 shares of Tesla to now own a total of 15 shares of the company. I am open to increasing my position in the company, although I have no plans to do so at this point in time. I would not suggest anyone use the following article as their sole data point to decide to invest nor sell shares in Tesla. I write these articles simply to give a Tesla-investor’s perspective into how I analyze the company.
I don’t think that earnings matter this quarter. At all.
Q3 was a weird quarter for Tesla, mostly because it was very quiet about its plans. We saw no major product announcements and we had no investor days to learn new information. Instead, Tesla has been talking by building and delivering its vehicles at the fastest rate it can, while also bringing a huge factory in China to the point of production — so it appears.
And therein lies the difficulty with earnings. Tesla has so many different pots in the fire that I think it is extremely hard to just look at the earnings and see how the company is doing. In fact, for the first time in the last three years, I think that the earnings won’t tell much of any part of the story.
I do, however, want to know how that story is going. Here’s a set of bullet points about what I want to find out more about, ordered from what I most expect to hear about to what I least expect to hear about:
For all of these reasons, I think that at the moment the biggest story with Tesla is simply going to be the story of what it is working on. Right now, the company is definitely leading in a space that is becoming more and more apparent that additional automakers will be moving into heavily in the near future. Tesla has a huge advantage right now, and it seems more important to find out how it is capitalizing on its advantages instead of worrying whether the company made a couple cents per share or not.
The transition to sustainable energy is accelerating, and I think the best thing for Tesla, its mission, and quite frankly, its shareholders, is to put the company into Plaid mode.
No matter what, I think this earnings call will be the most interesting one in the last three years at least.
Did I miss anything you’re hoping to hear? If so, leave me a comment about what else you are hoping to find out about tomorrow!
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Frugal Moogal A businessman first, the Frugal Moogal looks at EVs from the perspective of a business. Having worked in multiple industries and in roles that managed significant money, he believes that the way to convince people that the EV revolution is here is by looking at the vehicles like a business would.