20181006 - _Tesla_s Q3 Could Be Beautiful, But The - GooglePlus

"Tesla's Q3 Could Be Beautiful, But The Stock Isn't Marriage Material"

https://seekingalpha.com/article/4210045-teslas-q3-beautiful-stock-marriage-material

Tesla is very, very special. So many people love their products, and so many investors believe its share is overvalued. That's why the earnings analysis (2018Q3) in the link above caught my attention. It's pretty detailed. But I am confused.

The analysis itself seems all correct, but that also means, even if Telsa deliver 10 million cars a year, it still cannot make much profit.

The analysis assume Model 3 have 20% gross profit, Model S and X have 25% profit. Is that OK?

If it's correct, then, based on 83,500 cars (55,840 / 83,500 = 67% are Model 3), the total Cost of Revenues would be 4,754,820,000. That means the building cost of each car is 4,754,820,000 / 83,500 = 56,944

I started to check the numbers in the previous earnings reports.

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( The data below all come from http://ir.tesla.com/events-and-presentations and https://en.wikipedia.org/wiki/Tesla,_Inc. )

In 2017Q4, 24,565 cars are built (1,542 / 24,565 = 6% are Model 3), and the total Cost of Revenues is 2,191,172,000. So, the average cost of each car is 2,191,172,000 / 24,565 = 89,199

In 2018Q1, 34,494 cars are built (8,182 / 34,494 = 24% are Model 3), and the total Cost of Revenues is 2,195,893,000. So, the average cost of each car is 2,195,893,000 / 34,494 = 63,660

In 2018Q2, 53,339 cars are built (18,440 / 53,339 = 35% are Model 3), and the total Cost of Revenues is 2,666,654,000. So, the average cost of each car is 2,666,654,000 / 53,339 = 49,994

In 2018Q3, 83,500 cars are built (55,840 / 83,500 = 67% are Model 3), $43,000?
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There is something not right. The average building cost in 2018Q3 cannot be 56,944!

If the average building cost of each car drops to 43,000, then the total cost is 83,500 * 43,000 = 3,590,500,000. That means 4,754,820,000 - 3,590,500,000 = 1,164,320,000 extra profit.

That's 1,164,320,000 / 170,000,000 = $6.8 per share

OMG

Everyone should sell their house to buy Tesla. The price will jump above $400 when the earnings report is published next month. (the current price is $262)

ps: if anyone noticed any error in my calculation, please let me know.