In late February, Tesla Motors (TSLA) fell 10% in the three trading days following its fourth-quarter earnings report. Nonetheless, shares went into Wednesday afternoon's first-quarter report up 14% from where they traded prior to the Q4 print.
That's how it often goes with Tesla. Its stock is trading far less based on the EV pioneer's near-term results than on the dueling emotions of hope and fear. Hope that Tesla is on its way to becoming a mass-market EV maker cranking out a million-plus cars per year at high margins, and fear that the company won't make good on Elon Musk's very ambitious promises.
Tesla's Q1 report and earnings call may have slightly heightened the hope, given a continued dearth of specifics about the production ramp and order activity for its Model 3 sedan, which in turn might have contributed to Thursday's profit-taking. But the selloff could be short-lived if fresh news and/or rumors strengthen the latter emotion.
With the help of ramping Model S sedan and Model X SUV deliveries, Tesla reported Q1 revenue of $2.7 billion (up 135% annually), beating a consensus analyst estimate of $2.61 billion. Adjusted EPS, weighed down by an 85% increase in GAAP operating expenses to $925.5 million, came in at negative $1.33, below a negative $0.82 consensus.
Shares fell about 5% on Thursday. They're still up 38% on the year, and -- with the qualifier that predicting how much a company like this will earn in a few years is very much a guessing game -- valued at 25 times Tesla's 2020 EPS consensus of $11.60.
In line with its early-April disclosure, 25,051 EV deliveries were made, up 13% sequentially and 69% annually. Tesla still expects 47,000 to 50,000 first-half deliveries (up 61% to 71%) annually, and notably says it will hold off on giving a second-half outlook until after Model 3 production starts in July.
The company reiterates it wants to ramp Model 3 output to 5,000 vehicles per week "at some point in 2017," and 10,000 vehicles per week "at some point in 2018." On the other hand, it now expects to spend "slightly over $2 billion" on capital expenses in 2017, after previously guiding for $2 billion to $2.5 billion in capex.
Automotive revenue grew 123% annually to $2.29 billion. In addition to delivery growth, auto sales benefited sequentially from a mix shift towards the Model X, and from greater uptake of value-added trims and options. Though not providing total full-year delivery guidance, Musk indicates Tesla aims to sell about 100,000 Model S and Model X units this year.
Energy generation and storage revenue, which covers Tesla's recently-acquired SolarCity unit and its Powerwall battery packs, totaled $213.9 million, with gross margin coming in at 29.1%. Tesla says it plans to start pilot production for its solar roof tile solution in Q2, ahead of a second-half product launch.
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