10/19/2022: Tesla Stock Tanked After Missing Revenue Expectations
Record profit but stock dropped 5% after the report
Tesla reported Q3 earnings after market close today. Q3 revenue of $21.45B missed analysts’ expectation of $22.09B while EPS of $1.05 beat analysts’ expectation of $1.01. Tesla stock tanked 5% after the report.
Elon tried to shrug off the worries about the waning demand of Teslas during the call. But I don’t believe investors really buy it. As mentioned in my previous article, our back-ordered Tesla Model X suddenly became available to purchase with the original projected delivery date of Jan 2023. AFAIK, there’s currently no wait time to buy the performance version of Model Y. The demand is definitely waning for Teslas. The question is if the waning merely reduces the wait time for customers or it increases inventory waiting to be sold. If it’s the latter, Tesla is in big trouble.
With the skyrocketing interest rates, the record high US dollar and Tesla raising prices for their vehicles, I am not optimistic about its revenue growth in the foreseeable future. Tesla is a really cool company but Tesla’s valuation is simply frothy. They are making ~$16B a year in profits with an enterprise value of $675B!! I don’t know how they could sustain this valuation as they are selling a physical product and there’s increased competition from all incumbent car manufacturers. As a customer, I am also getting really terrible service from Tesla. Honestly, I am not sure if I will buy another Tesla going forward. I do hope they improve their service. I am pretty sure I can find good alternatives from other car makers 5 years from now if they don’t.
Definitely demand side issues.
Inventory grew to 8 days. Even though shanghai was shutdown and Berlin/Austin are ramping more slowly than previously built factories. Hmm. Why are they ramping so slow. It shouldn't be an ops/design issue.
He blamed logistics, but there is a surplus of trucks in US right (that part of supply chain was over built and rates are tanking) and there is literally no ship/train backlog. So you only find yourself with a shipping constraint if you surprise needed to ship more goods than expected, or you are full of it 😁
I rode in my buddies Tesla X back seat for 6 hours. Was the worst comfort expecience of my life. Not to mention, like you, his car is in the shop every month. BMW's EV looks way cooler at a lower price.
Byd is also eating tsla lunch in china. Check out the ramp curves.
I love Elon for what he did in terms of accelerating adoption and helping the planet but I agree the stock is wayyy overvalued still.