My Takeaway and Views on Tesla Earnings Call Part 1

Overall, there are many golden nuggets dropped by Elon and team in this earnings call that give you a glimpse of what they are doing. They are looking ahead into the future and what it holds. Wall Street is looking at the next quarter and what it achieves. Essentially, Tesla and Wall Street are not speaking the same language. But let me break it down into Good and Bad. Finally, I will give you my views at the end. Hope you enjoy!

Let me start with the bad because "everything about Tesla is bad” as portrait by every news outlet. They really should pay Tesla for their clicks. Anyways, There are a couple of bad points revealed in Tesla Earnings and I will explain whether there is anything to worry in my views.

Given the positive economic outlook, Wall Street is expecting all companies to do better. Rate cuts > lower rates > higher consumer spending > higher revenue > lower COGS > higher earnings. This was the thought process of Wall Street and many investors. However, Tesla expected lower growth in 2024. This worried many investors that Tesla would not be able to achieve 50%p.a. growth in its deliveries.

Wall Street always set expectations in terms of revenue, EPS etc. This will help them to fill in their valuation model. Without them, institutional investors would not know how to value a company and what to buy/sell. Essentially, Wall Street will convince institutional investors to buy/sell the stock they are covering. If they do, they earn money AKA a salesperson. Missing them means nothing to Tesla’s business but means everything to the stock price today.

Remember during COVID in 2020 when companies do not give forward guidance as they are unsure of what the immediate future holds? Companies like Apple withheld forward guidance so they are operate without the pressure and Wall Street’s intentional interference in its stock price. Tesla is doing the same here. Wall Street has always been negative against Tesla so it is a good thing to not feed the wolves when they do not bring value to you. Another reason is due to the constant attacks in the Red Sea and today in the Indian Ocean. Supply chains are being impacted globally which means Tesla’s production can be impacted. Wall Street does not see it yet and there is no good reason to explain to them.