This is a big week of earnings. Personally, I am looking with great interest in Tesla. $Tesla Motors(TSLA)$
Tesla
With Elon Musk as their Maverick CEO, this is one of the most noticeable businesses in the world. While most of us will relate to Tesla as an Electric Vehicle (EV) manufacturer, Tesla is m way more than an automaker. We should view Tesla as a leading innovator of sustainable solutions that range from solar energy, EV, energy storage, Artificial Intelligence (seen in their FSD autonomous driving solution and their humanoid venture in Optimus) and other service offerings like Tesla insurance.
Tesla has a forecast of $1.86 and $16.52B for their EPS and revenue respectively for their coming earning report. Since the recent peak in November 2022, Tesla has been in a decline though they saw a rise of 11.79% from a year ago. Tesla remains a volatile stock with a beta of 2.13 (where a beta value of more than 1 is considered volatile). For the last few weeks, the price has been moving sideways. With a wedge forming in the 1D chart, we can expect a strong break from the current range. With the recent departure of their AI executive and the recent Covid19 lockdown in China, the market seems to have factored in a "less than adequate" quarter of earnings. Though Elon's pursuit of Twitter does not affect Tesla's operations, the market seems to respond to Twitter's news.
The above is a great overview of Tesla's 2022 milestone compiled by Twitter user Teslaherbert.
There are quarterly performances and also a longer runway for the different pipeline developments. Let us continue to hold Tesla accountable to their timeline. While there are always challenges from supplies, supply chain and the pandemic, we should not see "excessive" changes. If some of the developments were pushed back without reasonable accountability, this should trigger some "red flags".
While it is easy for the market to react to the news of the auto deliveries, Tesla is poised to create exceeding value (and thus profit) through their other products and services too. Should Tesla achieve an "investment grade" rating in August, we can see more financial institutions and sovereign funds investments. On top of this, it is the release of FSD that will spin off a new industry for "Robo-taxi" (autonomous or driverless taxi).
From the screenshot above, GlobeNewswire predicted that the Robo-Taxi market to be worth USD 39.81 billion by 2030 with a CAGR of 53.8%. We can expect better value, safety, optimization and more sustainable public transport going forward. Of course, this will also lead to the development of other supporting industries like computer chip makers, cyber security, telecommunications, data protection and data privacy.
In the deck of cards of Tesla, there are still solar energy, energy storage, insurance, semi, Optimus (humanoid) and much more. In fact, I do see Tesla as a leader in data analytics and artificial intelligence. There are products and services that can potentially create immense value and revenue. However with the current macro climate, supply chain challenges, geopolitical tensions (between USA and China), climate change and an inflationary market, the market as a whole looks to be in decline. A crash looks to be possible and thus, being prudent may be a good move.
Let us spend within our means, invest with what we can afford and save up cash for crash so that we can buy great companies at good discounts.
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