To The Moon

$Tesla Motors(TSLA)$reported their second quarter fiscal year 2022 earning.

A very strong beat on the EPS, a small miss on the revenue.

EPS : $2.27 (adjusted) vs $1.81 expected

Revenue: $16.93 billion vs $17.1 billion expected

Auto gross margin came in at 27.9%, down from 32.9% last quarter to 28.4% a year ago, impacted by inflation and more competition for battery cells and other components that go into electric vehicles. Automotive revenues made up $14.6 billion of the company's total, with $1.47 billion coming from services and other revenue, and $866 million from the company's energy segment.

So margins was a bigger kind of takeaway from the financials and something that we also understand from inflationary pressures, supply chain issues, and the covid lockdown in China.

Revenue: Total revenue grew 42% YoY in Q2 to $16.9B. YoY, revenue was impacted by the following items:

- growth in vehicle deliveries

-increased average selling price (ASP)

- growth in other parts of the business

Cash: Operating cash flow less CapEx (free cash flow) of $621M in Q2.

In total $0.8B increase in the cash and cash equivalents in Q2 to $18.3B.

Profitability: $2.5B GAAP operating income; 14.6% operating margin in Q2.

$2.3B GAAP net income; $2.6B non-GAAP net income in Q2

27.9% GAAP Automotive gross margin in Q2

Operations: More than 1000 vehicles were produced in a single week at Gigafactory Berlin

Highest solar deployment in over 4 years

Coming to vehicle capacity, Tesla is now up to almost 2M vehicles produced in:

US: California and Texas Model 3/X/Y - 900,000

China: Shanghai - Model Y- 750,000

Europe: Berlin-Brandenburg - Model Y - 250,000

Diluted shares outstanding have been reduced over the last quarter, they have repurchased some shares from 1.157B to $1.155 shares outstanding. That is obviously resulting in a much higher EPS for the company, but margin did decline because of higher commodity prices, and higher expedited logistic prices.

On the balance sheet, they are sitting on $18.3B in cash and short-term marketable securities of $591M. Total liability is sitting at $30.855B. This balance sheet is one of the best out of all the automakers, they have plenty of cash than debt and liabilities on the balance sheet.

Tesla has grown its charging infrastructure more than its store and service centers, reporting 709 stores and service locations for the quarter and 3j971 Supercharger locations ( with 36165 total Supercharger connections) in the second quarter. Those numbers represent 19% growth in store and service center location year over year and a 34% growth in the number of charging locations.

Tesla CFO said, "Austin and Berlin ramp inefficiencies will continue to weigh on the margins for the balance of the year." So that is something that might affect bottom line profitability in the future, revenues and deliveries can be very strong if they can continue to grow, but margin might get affected, then profitability might be a challenge for the company. Economies of scale should offset some of those commodity prices and inflationary pressure.

Tesla stock support level is around $620, resistance will be around $790. This will be the range that Tesla will be trading at. From my point of view, the quarter for Tesla was good, the company is still able to weather some of the price pressures. Margin is probably the only thing that kind of decline, but revenue grew, and earnings were also great (grew by 100% YoY). Overall I am bullish long-term, but only buy in when you feel the price is fair.