TSLA

Tesla’s Margins Squeezed; Free Cash Flow Negative in Q2

by

Image Source: TradingView By Brian Nelson, CFA On July 22, Tesla (TSLA) reported mixed second quarter results, with revenue exceeding the consensus forecast but non-GAAP earnings per share coming in below expectations. Total revenues increased 26%, while gross profit expanded 23%, as gross margins contracted 41 basis points from the same period a year ago. Income from operations fell 57% year-over-year, as its operating margin contracted 269 basis points, to 1.4%. Adjusted EBITDA fell 4% year-over-year, as adjusted EBITDA margins shrunk 353 basis points, to 11.6%. In the quarter, non-GAAP net income and non-GAAP earnings per share fell 17% and 18%, respectively. Management summarized the results as follows: Q2 was a strong quarter for our core vehicle, energy and services … Read more

Tesla’s Future Is “Incredibly Bright”

by

Image Source: Tesla By Brian Nelson, CFA On April 22, Tesla (TSLA) reported better than expected first quarter results with revenue and non-GAAP earnings per share coming in better than the consensus estimates. Automotive and total revenues advanced 16% from the year-ago period, while gross profit rose 50%, as gross margins expanded nearly 480 basis points. Though down sequentially, income from operations more than doubled versus the same period last year, as its operating margin swelled 214 basis points. Adjusted EBITDA increased 30% on a 183 basis-point improvement in its EBITDA margin. Year-over-year, non-GAAP net income rose 56%, while non-GAAP earnings per share advanced 52%. Management had the following to say about the results: We continued to make meaningful progress … Read more

Tesla’s Shares Remain Pricey

by

Image Source: Tesla By Brian Nelson, CFA Tesla (TSLA) recently reported better than expected fourth quarter results, but revenue of $24.9 billion fell 3% in the quarter driven by lower automotive revenues, which declined 11% year-over-year. The consensus revenue estimate was $24.8 billion. Total gross profit fared better, however, advancing 20%, but income from operations dropped 11%, to $1.41 billion in the quarter. Its operating margin contracted 50 basis points year-over-year. Adjusted EBITDA fell 4%, as its adjusted EBITDA margin fell 17 basis points. Non-GAAP net income dropped 16% in the quarter, while non-GAAP earnings per share fell 17%, to $0.50, a nickel better than expected. Management had the following to say about the results: 2025 marked a critical year … Read more

Tesla Faces Earnings and Margin Pressure But Free Cash Flow Soars

by

Image Source: Tesla By Brian Nelson, CFA On October 22, Tesla (TSLA) reported mixed third quarter results, with revenue beating the consensus forecast, but non-GAAP earnings per share missing expectations. Total revenue increased 12%, to $28.1 billion, but total gross profit increased a modest 1%, as its GAAP gross margin was squeezed 185 basis points in the period. Income from operations came in at $1.6 billion, which dropped 40% year-over-year, as its operating margin fell 501 basis points. Adjusted EBITDA fell 9% with its adjusted EBITDA margin dropping 348 basis points. Non-GAAP net income fell 29%, while non-GAAP earnings per share fell 31% in the quarter. Management summarized its quarterly performance as follows: In Q3, the Tesla team achieved record … Read more

Tesla’s Second Quarter Results Weren’t Great

by

Image Source: Tesla By Brian Nelson, CFA Tesla (TSLA) recently announced second quarter results that were mixed at best. Revenue beat expectations but fell 11.8% year-over-year, while non-GAAP earnings per share of $0.40 was in-line with what the Street was expecting. Total gross profit fell 15% in the quarter on a year-over-year basis while income from operations dropped 42%. Adjusted EBITDA fell 7%, while non-GAAP earnings per share dropped 23%. Management had the following to say about the results: Q2 2025 was a seminal point in Tesla’s history: the beginning of our transition from leading the electric vehicle and renewable energy industries to also becoming a leader in AI, robotics and related services. Our first Robotaxi service launched in Austin … Read more

3 Undervalued Stocks to Consider Buying Now

by

Dear readers:   With the markets retracing most of their recent drawdown, we’re taking a victory lap as we didn’t panic, nor should have you. We highlighted our wait-and-see approach amidst the worst of the pullback, and we expect the Magnificent 7 (large cap growth and big cap tech) to continue to propel the markets higher, as they have done.   We’ve been busy rolling valuation models as we finetune our assumptions for a great number of companies under coverage. While doing so, we came across three undervalued stocks that are also included in the simulated newsletter portfolios. We think they’re prime for highlight.   The three stocks are UnitedHealth Group (UNH), Nvidia (NVDA) and Alphabet (GOOG). We spend a lot of time on discounted cash-flow valuation, … Read more

Magnificent 7 Earnings Reports Not Bad Thus Far

by

By Brian Nelson, CFA   Shortly after Trump’s Liberation Day, where the President unveiled lofty tariffs on numerous countries, we released our wait-and-see outlook for the equity markets, which thus far has proven to be the right move, with the markets largely recovering from the depths reached in April. The S&P 500 (SPY), for example, is down just 3.3% year-to-date, excluding dividends.   A lot has happened since Liberation Day, including easing of tariffs to a 10% baseline for most, if not all, countries, with the key exception of China, where tariffs remain extremely elevated and prohibitive. Many countries are now reportedly negotiating trade agreements with the White House, and we expect China to be added to that list soon, even if … Read more

Tesla’s Revenue Falls in First Quarter, Pulls 2025 Outlook

by

Image Source: Tesla By Brian Nelson, CFA On April 22, Tesla (TSLA) reported dismal first quarter results with revenue and non-GAAP earnings per share coming in below expectations. Total revenue fell 9% in the period, as total automotive revenues dropped 20%, while energy generation and storage revenue increased 67%. Services and other revenue increased 15%. Income from operations fell 66%, while adjusted EBITDA slid 17%. Adjusted EBITDA fell 17% in the quarter on a year-over-year basis. Management spoke of uncertainty in the quarterly update: In Q1, we accomplished an industry first: simultaneously changing over production lines across all factories for the world’s best-selling vehicle4 – the Model Y. The Tesla team successfully ramped our production lines across four factories while … Read more

Trump Tariffs Higher than Expected; What We’re Doing

by

By Brian Nelson, CFA The Trump tariff increases came in larger than what we were expecting, and it remains to be seen how they will flow through the global economy, as we monitor potential retaliatory tariffs from other countries. As it relates to the equity markets, we’re taking a wait and see approach at the moment as we monitor new policy changes related to trade, immigration, fiscal (tax), and regulations. In short, we’re not overreacting to the sell off as we won’t have a great handle on the tariff impact to companies for a few quarters when they report results post-tariff increases. That said, we’re expecting continued market volatility, with meaningful risk to the downside, before trade uncertainty alleviates in … Read more

Tesla Remains a Net Cash Rich, Free Cash Flow Generating Powerhouse

by

Image: Tesla continues to attack costs with average cost of goods sold per vehicle reaching an all-time low in the fourth quarter of 2024. Image Source: Tesla By Brian Nelson, CFA Tesla (TSLA) reported disappointing fourth quarter results on January 29 with revenue and non-GAAP earnings per share coming in below the consensus forecasts. Total revenue advanced just 2% in the quarter, and total gross profit fell 6%, while income from operations dropped 23% on a year-over-year basis. Tesla’s profitability faced pressure as the firm navigated reduced S3XY vehicle average selling prices. Adjusted EBITDA, however, increased 25%, and non-GAAP earnings per share came in at $0.73, up 3% on a year-over-year basis. Tesla had the following to say about its … Read more