Tesla is scheduled to release Q1 results tonight after the close with a conference call which should begin around 6:30 p.m. ET.

The current Capital IQ Consensus Estimate calls for EPS of -$0.21 on sales of $5.85 bln, up 28% yr/yr.

TSLA provided Q1 vehicle production and deliveries update APR 2 2020; produced almost 103,000 vehicles and delivered approx. 88,400 vehicles.

  • Some items this quarter include:

    • CNBC reported in early February that Tesla was going to delay Model 3 deliveries in China on account of coronavirus outbreak.

    • In mid-February Tesla reportedly recalled more than 15K Model X SUVs in North America due to power steering issue.

It’s important to note the fall in oil prices.

Model Y production began in January. Deliveries started in March which Tesla noted was significantly ahead of schedule.

Elon Musk has the potential to earn a significant option award if Tesla's valuation holds above $100 bln for six months.

As part of an earlier-agreed compensation package, Musk would receive the option to purchase about 1.7 mln shares at $350.02 per share, which if sold at today's stock price would net Musk a hefty $756 million dollar premium.

The stock's parabolic run tops out near +300% from Oct. 2019 to the Feb. 4 peak.

TSLA trades around 58x EV/EBITDA, a significant premium to fellow auto manufacturers like Ford (F) at 16x, General Motors (GM) at roughly 8.5x, and Daimler (DDAIF) at 25x.

RESULTS:

Tesla beats by $1.45, beats on revs; refrains from providing net income and free cash flow guidance

  • Reports Q1 (Mar) earnings of $1.24 per share, excluding non-recurring items, $1.45 better than the S&P Capital IQ Consensus of ($0.21); revenues rose 31.8% year/year to $5.99 bln vs the $5.85 bln S&P Capital IQ Consensus.

    • Sequentially, our revenue was mainly impacted by lower deliveries, driven primarily by limitations on our ability to deliver vehicles towards the end of the quarter. As expected, our average selling price (ASP) declined further as our mix continues to shift from Model S and Model X to the more affordable Model 3 and Model Y.

    • Our automotive gross margin of 25.5% as well as total gross margin of 20.6% both reached their highest levels in 18 months.

    • Quarter-end cash and cash equivalents increased by $1.8B QoQ to $8.1B, driven mainly by our recent $2.3B capital raise and offset by negative quarterly free cash flow of $895M.

  • Model Y production also exceeded the first quarter of production of Model 3 in Shanghai, demonstrating continued improvements in program execution. Additionally, we achieved positive gross margin for Model Y in its first production quarter.

  • Our Gigafactory Shanghai ramp is progressing according to plan. Due to better than expected progress, we believe Model 3 will achieve a production rate of ~4,000/week (or ~200k/year extrapolated run rate) by mid-2020.

  • Based on the current progress, we are on track to start the first Model Y deliveries from Gigafactory Berlin in 2021.

  • Due to the wide range of potential outcomes, near-term guidance of net income and free cash flow would likely be inaccurate. We will again revisit our 2020 guidance in our Q2 update.

  • While near-term profit guidance is currently on hold, we believe we will achieve industry leading operating margins and profitability with capacity expansion and localization plans underway.

  • We expect that production of both Model Y in Fremont and Model 3 in Shanghai will continue to ramp gradually through Q2. We are continuing to build capacity for Model Y at Gigafactory Berlin and Gigafactory Shanghai and remain on track to start deliveries from both locations in 2021. Lastly, we are shifting our first Tesla Semi deliveries to 2021.

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