Tesla’s mixed first-quarter earnings have divided analysts with some citing “niggling numbers” that were below consensus and others focusing on “another solid quarter from Musk & Co.”
Either way Tesla
shares slipped 3% in premarket trading on Tuesday, putting a minor dent on the fortunes of CEO Elon Musk.
Daniel Ives, an analyst at private investment firm Wedbush, was firmly in the bull camp.
“After the bell Tesla reported its first quater results that we would characterize as a strong print for Musk & Co. as total revenues were slightly below bullish expectations coming in at $10.39 billion vs. the Street’s $10.48 billion estimate.” he wrote in a note. “The all-important Automotive GM [gross margins] ex-credits was 22.0%, vs. the year ago period of 20.0%.”
Itay Michaeli, an analyst at Citi was more bearish: “The initial after-hours stock reaction is understandably negative as Tesla’s clean Q1 results were below consensus and are likely be viewed as underwhelming, but we don’t think the quarter changes the LT [long term] bull/bear debate much. No change to our view on the stock at current valuations.”
Danni Hewson, an analyst at broker AJ Bell warned investors to look beyond the record profits: “There are some niggling numbers for Tesla to deal with – $518 million is the amount of cash generated, not from car sales but from regulatory credits, sold to more polluting car makers.
“It’s a huge figure, one that’s almost doubled compared to the same quarter last year and one that shouldn’t be relied on long term as other manufacturers make the switch to electric models. 184,800 is the number of cars delivered, an increase of almost 100,000 but the vast majority of sales were in the shape of more affordable models a trend likely to continue. And $110 million profit earned from Bitcoin sales, so all told the core business remains loss making.
“But there is one number that will bring investors cheer. 1.05 million is the number of cars the business has the capacity to make this year up nearly 50%, in part thanks to new sites coming on-line in Texas and Germany and growth is expected to continue on the same trajectory as more drivers turn on to electric.
“There are hurdles, not least the global shortage of microchips and Elon Musk told investors the last three months have brought the most difficult supply chain problems the company has ever faced. And whilst the market for electric vehicles is growing so is competition for a slice of that lucrative pie. Tesla might have led the race whilst the track was sparsely populated, it will need to find another gear if it’s to keep its position over the distance.”
Philippe Houchois, an analyst at Jefferies wrote in a note entitled Fodder for Bulls and Bears that it was another mixed quarter, solid on gross margin but weakish on earnings before interest and taxes : “We think first quarter numbers support current consensus in a year that is still mostly about execution rather than vision.”
An upbeat flash note from Evercore said: “In what primarily will be a year dominated by ‘launch preparation’ for ’22 capacity volume/expansions (Berlin, Austin, Model Y expansion in Shanghai now, Model S refresh, first Cybertruck and Semi by year end?), Tesla executed a solidly inline core first quarter.”