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First published on Simply Wall St News
Tesla, Inc. (NASDAQ:TSLA), issued the latest Q1 earnings call yesterday. Trading picked up, and the stock is trending 7% up pre-hours. We will examine the latest Q1 results along with the remarks from management.
Notably, the popular fund AARK sold 67.884k shares of Tesla stock, yesterday.
Analysts also update their future estimates shortly after earnings, so in is worth putting the company into your watchlist to get notified when that happens.
The highlights from the Q1 earnings call are:
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Delivered 310k vehicles in Q1 2022
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Lost about a month of build volume during the Shanghai factory shutdown
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Automotive gross margin reached 32.9%, operating margin of 19%+
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Total Q1 revenues of US$18.8b, an increase of 81% YoY, US$50.2b in the last 12 months
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Quarterly net income US$3.318b, US$8.4b in the last 12 months
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Cash flow from operations at US$13.85b in the last 12 months
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Free cash flow at US$6,950b in the last 12 months
Outlook and Management remarks:
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Pushing for the autonomous robotaxi production to reach volume production by 2024
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Estimated production of 1.5 million vehicles by the end of 2022 - 60% growth
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Musk expressed confidence that the company will grow at a 50% CAGR for the next 5+ years
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In Q2 vehicle production to stagnate to Q1 levels, but Q3 and Q4 to make up for the loss
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At maturity, Musk expects Tesla to produce around 20 million cars annually
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Musk notes that investors are underestimating the value of the Optimus robot program, which he thinks will be more than the whole car business.
Outlook Review
In general, it seems that Tesla is striving to maintain high revenue growth over the next decade, when the company should produce around 20 million vehicles when it matures - after it builds up full capacity. Q2 is expected to be about as successful as Q1, while the second half of 2022 is expected to make up and ultimately finish the year with a 50%+ revenue growth.
Musk also commented on the value of Optimus as having more potential than the car business. While it is certainly possible to go beyond the imaginable with innovation, this remark lacks a basis and is highly speculative. When thinking about future projects, investors need to be provided with a path to growth, capital expenditures for the project and profitability. Considering where Optimus is in its development, this sounds like a promise being made "based on a theory before a phase-I clinical trial". Seasoned investors may take caution, and management can always fall back on the disclaimer made before making these forward-looking statements.