14 analyst came up with an average quarterly revenue of 3.2 billion dollars for Tesla’s supposedly hot year over year revenue figures of 3.4 . billion dollars.
Investors and retail dupes should be happy though because that is what they have supposedly signed up for, revenue growth.
What this revenue growth translated to the bottom line is something truly horrific and that only Musk could get away with.
The line worth noting too is really here though.
The gross margin “Non-Gaap” was 13.8%. The analyst penciled in 14.1% and they would have been expecting the production issues to have been a problem, so Tesla missed here as well. Why is that such an issue?
Tesla’s Q1 is going to suck, its always there worst quarter, they’re going to lose of money with underutilization their every growing cash burning furnace.
So expect more of the same financial chicanery with cash raises in murky securitized auto loan markets… but eventually, Tesla will have to come to the table and sell its overpriced shares will it can.
But there are many other reasons people should be frightened of this Frankenstein.
After some research in the past few weeks, it came to my attention that some academics think net profits don’t matter either. I won’t go into the details, but suffice it say Gross Profits is a cleaner number than net profits, and this has been recognized for some 5+ years now. Exceptional growth companies, therefore, don’t necessarily have high bottom line figures, but they do have very high gross margins it would seem. Well, Tesla has neither gross profits or net profits. So that’s one.
Another thing though it is troubling is that though Musk is constantly touting the growth mantra, then why aren’t analyst more optimistic in their 2020 estimates.
To be clear, analyst are optimistic, they think Tesla will be earning 25billion a quarter in 2020, which is about what 50% compound growth is supposed to get you.
And given those kinds of insane projections, it is understandable why shareholders of the institutional sort can be conned into believing that Tesla at say 15% EBITDA on 100B a year revenues (15 billion ) looks attractive. But they’re looking at it backward and it is a lazy sort of analysis.
The proof that Tesla is a chit business is inductive. The margins aren’t;t real. Ten to 20% of the current gross margin (10 on the S, 20 and a 50,000 dollar model 3 ) is a government subsidy. What investors will have ex-subsidy is 100 billion dollars revenue titanic that will fold on the first wind that blows on the auto cycle, which could be at the inflection point of demand NOW.
Tesla will implode and it will be spectacular …