Tesla Stock Bottoms Out After Earnings Misfire
Tesla Motors Inc (NASDAQ:TSLA) reported earnings today and the share price plummeted in afterhours trading. The stock is currently down to $159.30, down $17.51 or 9.9 percent as investors mull over the disappointing report.
Analysts expected Tesla to report adjusted earnings per share at $0.09, while on a GAAP basis the company was expected to post a loss of $0.25 per share. According to consensus, the high dollar motor company should have reported GAAP revenue in the $554 million range.
Tesla Motors Inc (NASDAQ:TSLA) left investors with fumes in their mouths as the actual number for the quarter were released to the public. Rather than the $0.25 loss expected on a GAAP basis, the company showed a $0.32 loss per share. Additionally falling short in the revenue department, Tesla missed estimates of $554.33 million by more than $20 million, reporting on $431 million on a GAAP basis.
On the bright side, Tesla’s gross margin is up to 22 percent on a non-GAAP basis, excluding ZEV credits. This translates to a 24 percent increase on a GAAP basis.
Sales Numbers Are OK
Tesla is now manufacturing 550 cars each week, and managed to deliver 5,500 Model S cars. This is including more than 1,000 vehicles sold in European markets. These numbers exceeded Tesla’s own expectations, but still left some analysts scratching their heads. In the second quarter Tesla delivered only 5,150 of the Model S vehicles.
CEO Says Tesla Is Overvalued
Elon Musk, the CEO and founder of Tesla Motors Inc recently said he feels like the shares are priced higher than they should be. He said that the price per share is overvalued.
However, he also has stated that the company is setting benchmarks and then beating them. This helps build his company’s credibility with investors, which in turn helps drive up share price.
4th Quarter Expectations
Guidance from the analysts at Tesla indicates the company expects to deliver just less than 6,000 Model S cars in the 4th quarter. The expectations for the full year stand at 21,500 vehicles.
New Servicing Procedures On The Horizon
The letter to shareholders makes a statement that indicates that Tesla is deeply involved in the research and development of some groundbreaking procedures for servicing its vehicles. The letter said, “Tesla is pioneering a new approach to vehicle servicing that we believe will revolutionize the customer experience.” However, the letter did not reveal any details as to what this will entail.
Superchargers Draw Customers In
Tesla’s recently opened Supercharger Corridor is one of the reasons sales are up. According to customers, the chargers work much quicker than the average EV chargers, and Tesla has carefully placed them along the West Coast. The length of time required to charge a vehicle, and the lack of stations to charge them in, have been drawbacks to potential clients in the past.
The shareholder letter points out that “Customers cite the ability to supercharge as one of the top 5 reasons they choose a Tesla.” The company has begun expanding this network to both Scandinavia and Europe.
The Big Picture
While Tesla Motors Inc (NASDAQ:TSLA) may be down in afterhours trading today, the overall view of the stock tells the true story. Tesla shares have increased in value by more than 400 percent in the last year alone, making Elon Musk’s dream of creating a truly iconic company that supplies the world with Electric Vehicles a reality.
Want your own Model S? The base cost of $59,900 is reasonable enough, when you look at the perks of owning one. Just be sure you have a charger nearby when you need it.