{"id":1478915,"date":"2024-07-23T18:05:00","date_gmt":"2024-07-23T22:05:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1478915"},"modified":"2024-07-23T18:05:00","modified_gmt":"2024-07-23T22:05:00","slug":"tesla-earnings-preview-financials-robotaxis-cybertruck-musks-pay-plan-in-focus","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/tesla-earnings-preview-financials-robotaxis-cybertruck-musks-pay-plan-in-focus\/1478915\/","title":{"rendered":"Tesla Earnings Preview: Financials, Robotaxis, Cybertruck, Musk’s Pay Plan In Focus"},"content":{"rendered":"

Tesla Earnings Preview: Financials, Robotaxis, Cybertruck, Musk’s Pay Plan In Focus<\/span><\/p>\n

\n

Tesla is set to report earnings after the bell today, with the street expecting a hefty EPS drop and 2% revenue decline. Sellside consensus expects Tesla’s Q2 earnings per share to drop 33% to 61 cents, with sales dipping to $24.38 billion. Here are the expectations on other metrics:<\/p>\n

Gross profit margin (exp. 17.7%).<\/em>
\n\tFree cash flow (exp. 1.2bln).<\/em>
\n\tCapEx (exp. 2.5bln).<\/em>
\n\tAverage selling price (exp. 42,736).<\/em><\/p>\n

Q3 2024 GUIDANCE:<\/strong><\/p>\n

EPS exp. 0.55.<\/em>
\n\tRevenue exp. 25.4bln.<\/em><\/p>\n

FY24 GUIDANCE:<\/strong><\/p>\n

EPS exp. 2.02.<\/em>
\n\tRevenue exp. 98.6bln.<\/em><\/p>\n

As we noted this morning<\/a>,\u00a0with valuations among technology firms still high after last week\u2019s retreat, investors are looking for more evidence that their businesses are on track and the euphoria around artificial intelligence is justified.<\/p>\n

That said, unlike other Mag7 stocks, TSLA has largely missed the meltup in the past year, with the stock only enjoying a sharp move higher in recent weeks. Even with that though, Goldman calculates that TSLA’s positioning score among hedge funds <\/a>is only 3.5, meaning this name is extremely shorted and there is major risk of a continued squeeze (just as we correctly warned 2 months ago<\/a>).<\/p>\n

<\/a><\/p>\n

Robotaxis In Focus<\/strong><\/p>\n

Analysts and investors eagerly await details on Tesla’s robotaxi reveal, initially set for August 8 but now delayed to October.\u00a0Investors will also look for information on new affordable models, the Optimus humanoid robot, and spending on AI and autonomous driving.<\/p>\n

Tesla’s 11-day winning streak earlier this month, that saw the stock rise about 50% from its YTD lows, abruptly ended\u00a0on July 11 after a\u00a0Bloomberg News<\/a><\/em>\u00a0report revealed that the EV maker plans to delay the unveiling event of the highly anticipated ‘robotaxi’ from August 8 to sometime in October.<\/p>\n

In early June, we told readers, “TSLA remains one of the most shorted names in the hedge fund space and is one of the biggest mutual fund underweights.”\u00a0<\/p>\n

Shares soared nearly 62% from June 10 to July 11 in a massive short squeeze. We penned this note:\u00a0“Tesla’s Furious Rally Is Another Massive Short Squeeze.”<\/a><\/em><\/p>\n

But the tide could be changing unless the company unexpectedly beats expectations after the bell today. As a reminder, here is\u00a0GLJ Research’s take on the Robotaxi disappointment for Tesla earlier this month:<\/p>\n

A lot of investors trade around these TSLA days\/events, many of which have turned out to be sizeable disappointments (i.e., Battery Day + Cybertruck Unveil + AI Day 1.0 + Optimus Day 1.0 + etc.); and now that “Robotaxi Day 8\/8” its not happening as originally scheduled, the folks trading TSLA’s stock into this event are likely now sellers (welcome to investing in 2024). Furthermore, given the run-up in TSLA’s shares the past 11 days (the 74-day RSI is a whopping 74.6), the selling could be quite material.<\/em><\/p>\n

JPMorgan analyst\u00a0Ryan Brinkman penned a note after the\u00a0JPMorgan European Automotive Conference in London last month explaining that\u00a0robot taxis are “years” away<\/a>.\u00a0<\/p>\n

Deliveries And Cybertruck<\/strong><\/p>\n

Yet Tesla surprised investors at the beginning of July with\u00a0better-than-expected deliveries<\/a>\u00a0for the second quarter despite a global electric vehicle market downturn.<\/p>\n

It delivered 443,956 vehicles in the second quarter, better than the 439,302 average analyst estimate.<\/p>\n

<\/a><\/p>\n

The Austin-based carmaker delivered 422,405 of its top-selling Model 3 and Model Y vehicles in the second quarter, down from\u00a0446,915\u00a0a year ago.<\/p>\n

The company produced 410,831 vehicles during the quarter.<\/strong><\/p>\n

While sales were down 4.8% from a year ago, Tesla improved on a sequential basis from the\u00a0386,810\u00a0vehicles delivered in the first three months of the year.<\/p>\n

New estimates from\u00a0Fred Lambert, the\u00a0editor-in-chief and main writer at\u00a0Electrek<\/a>, speculated that after parsing through the delivery report,\u00a0“Tesla Cybertruck might have become the best-selling electric pickup truck in the US.”\u00a0<\/strong><\/p>\n

Lambert’s extended take on Cybertruck is that it will likely become (if not already) the best-selling EV truck in the world’s largest economy:\u00a0<\/p>\n

I predicted that despite the Cybertruck coming a long time after the F150 Lightning and Rivian R1T, it would likely achieve higher volume than those quickly after its launch for the simple fact that Tesla is second to none when it comes to ramping up EV programs.<\/em><\/p>\n

We can’t confirm it because of the lack of transparency in Tesla’s sale disclosure, but I think it’s likely true that Cybertruck has become the best-selling electric pickup in the US right now.<\/em><\/p>\n

Regarding demand, a ZH reader contacted us last week. They said their Cybertruck delivery date was moved up from the estimated second half of 2025 to August.<\/p>\n

For some context, the reader paid $100 for the\u00a0Cybertruck reservation in late 2022. Recall that reservations first opened in November 2019.\u00a0<\/p>\n

Tesla and AI<\/strong><\/p>\n

As far as Tesla and AI, in July\u00a0Morgan Stanley’s Adam Jonas suggested that Tesla could be poised for the powering up America theme with its\u00a0solar energy and storage business.<\/p>\n

This comes as artificial intelligence data centers are being constructed across the country, and once completed, demand a whole heck of a lot more power than traditional data centers, which means power grids must be upgraded to handle the new load capacity.\u00a0<\/p>\n

“At first glance, the rapid growth in AI and its impact on electricity demand may not seem to have relevance to Tesla or the broader auto industry,”\u00a0Jonas wrote in a note to clients in late June.<\/p>\n

Titled\u00a0“Tesla Energy Storage: Can GenAI Electrify This $130bn Business?”<\/em>\u00a0Jonas continued, “We recently published an analysis showing how US data center power usage may be equivalent to the power used by 150 million electric cars by 2030; the forecasted increase in US data center power from 2023 through 2027 is the electrical energy equivalent to adding 59 million EVs to US roads, or a 21% increase in total vehicles in service.”<\/p>\n

Jonas seemed to embrace\u00a0‘The Next AI Trade,’<\/a><\/em>\u00a0a theme we\u00a0introduced to our pro subscribers in early April. We outlined how the AI revolution will drive a significant increase in electricity demand from AI data centers, reshoring trends, and other electrification trends,\u00a0necessitating an\u00a0upgrade of the nation’s grid.\u00a0<\/p>\n

<\/a><\/p>\n

Musk’s Pay Package<\/strong><\/p>\n

Investors will also be looking for any new updates on Tesla’s move to Texas.\u00a0Tesla investors voted for CEO Elon Musk\u2019s compensation package and moving the company\u2019s state of incorporation to Texas, signaling confidence in his leadership, in early June.<\/p>\n

Tesla is banking on the reapproval aiding in its effort to overturn Delaware Chancery Court Judge Kathaleen St. Jude McCormick\u2019s ruling,\u00a0which means a likely appeal to the state\u2019s Supreme Court.<\/p>\n

Still, the outcome is uncertain, with Tesla stating in its\u00a0proxy statement\u00a0that it \u201ccannot predict with certainty how a vote to ratify Musk\u2019s compensation would be treated under Delaware law in these novel circumstances.\u201d<\/p>\n

Tesla Stock: Most, If Not All Good News, Appears To Be Priced In<\/strong><\/p>\n

As we said in our note earlier this month,\u00a0with the stock price surging 50% in just a few days, one can make the argument that most if not all good news for the foreseeable future was promptly priced in.<\/p>\n

Meanwhile, there is a growing sense of uncertainty around how to treat the wider EV market, amid a sea of conflicting dynamics. The industry benefits from generous tax credits. Yet it\u2019s also contending with significant hurdles in the form of tariff wars and even identity politics, with some consumers rejecting EVs as a form of \u201cwoke\u201d transport.<\/p>\n

In the US,\u00a0Donald Trump\u00a0has said that if he becomes president again after November\u2019s election, he\u2019ll undo existing laws supporting battery-powered vehicles, calling them \u201ccrazy.\u201d That said, Trump is a \u201chuge fan\u201d of Tesla\u2019s Cybertruck, according to\u00a0Elon Musk, who recently told staff to\u00a0brace for major job cuts, with sales roles among those affected. And the Cybertruck, Tesla\u2019s first new consumer model in years, has\u00a0been slow to ramp up.<\/p>\n

For that reason, some hedge fund managers have decided the stock is off bounds altogether. Tesla is \u201cvery difficult for us to position,\u201d said\u00a0Fabio Pecce, chief investment officer at\u00a0Ambienta\u00a0where he oversees $700 million, including managing the Ambienta x Alpha hedge fund.<\/p>\n

Basically, it\u2019s not clear whether investors are dealing with \u201ca top company with a great management team\u201d or whether it\u2019s \u201ca challenged franchise with deficient corporate governance,\u201d he said.<\/p>\n

However, \u201cif Trump wins, it is truly going to be very positive\u201d for Tesla, though \u201cobviously not amazing for EVs and renewables in general,\u201d he said. That\u2019s because Trump is expected to impose \u201cmassive tariffs towards the Chinese players,\u201d which would be \u201cbeneficial\u201d to Tesla, Pecce said; this is also wrong since there is virtually no Chinese EV penetration in the US, and if anything it would force even more dumping of Chinese EVs in Europe which is also a huge market for Tesla.<\/p>\n

And as usual, skeptics will also be looking into the company’s accompanying 10-Q when it is released for potential updates on the company’s numerous legal liabilities.<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nTue, 07\/23\/2024 – 14:05<\/span><\/p>\n

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