4/23/2024: Tesla Earnings Missed Expectations Again

In my post about Matterport yesterday, I mentioned that Hashicorp is one of the potential good takeover targets and guess what? Today, HCP 0.00%↑ stock went up 20+% after WSJ reported that IBM is nearing a deal to acquire Hashicorp. That was fast. I believe there are still plenty of good takeover targets out there for strategic buyers. But practically it’s not easy to buy these small/micro cap stocks as retail investors. Daily transaction volumes for these small stocks are usually pretty small so liquidity is very limited and you never know if and when the acquisition will happen. I bought MTTR 0.00%↑ stock at $2.15 after the previous earnings call and the stock was pretty much trading sideways and down until yesterday’s announcement. I got lucky in the sense that I only waited for two months for the stock’s true value to be realized but the wait time will probably be a lot longer in an average bottom-fishing stock picking case. Patient investors could still make this strategy work. But most investors are probably not patient enough to make it work.

Back to the Tesla earnings, Tesla reports Q1 earnings after market close today. Revenue was $21.3B vs. $22.15B expected. Adjusted EPS was $0.45 vs. $0.51 expected. Revenue growth for Q4 was -9% YoY vs. 24% a year ago. Gross margin and operating margin were both down significantly as shown above. Q1 was an awful quarter for Tesla.  TSLA 0.00%↑ stock was up 10% after the report though. The stock went down a lot last week and is basically rebounding to the price a week ago. Elon said Tesla is going to work on the low cost car ahead of schedule and there’s a lot of AI stuff going on and it’s going to be awesome. I suppose this narrative is very encouraging. Regardless, the next few quarters are probably going to be quite tough for Tesla and there’s still a lot of uncertainty about the AI stuff in the long run. It could work but we don’t know if it will work.