People who lose money shorting Tesla are losing their shirts for the same reason as those who shorted Amazon: cash flow + growth matters more than profitability, PE ratios, or EPS. Tesla's car business is cash flow positive but the quarterly losses are due to infrastructure investments. This is how finance can be more subtle than meets the eye.
Tesla's car business is very profitable:
Tesla also reported an automotive gross margin excluding SBC and ZEV credit (non-GAAP), of 22.2% in the quarter, up from 19.7% a year ago, but down from 25.0% in Q3...
huge growth:
Looking at the future, Tesla said it expects to deliver 47,000 to 50,000 Model S and Model X vehicles combined in the first half of 2017, representing vehicle delivery growth of 61% to 71% compared with the same period last year.
reinvesting operating profits into investments:
The company also expects to invest between $2 billion and $2.5 billion in capex ahead of the start of Model 3 production and continues "to focus on capital efficiency while also investing in battery cell, pack and energy storage production at Gigafactory 1. It also forecast that both Model 3 and solar roof launches are on track for the second half of the year.
This company is firing (no pun intended) on all cylinders
Tesla's car business is very profitable:
Tesla also reported an automotive gross margin excluding SBC and ZEV credit (non-GAAP), of 22.2% in the quarter, up from 19.7% a year ago, but down from 25.0% in Q3...
huge growth:
Looking at the future, Tesla said it expects to deliver 47,000 to 50,000 Model S and Model X vehicles combined in the first half of 2017, representing vehicle delivery growth of 61% to 71% compared with the same period last year.
reinvesting operating profits into investments:
The company also expects to invest between $2 billion and $2.5 billion in capex ahead of the start of Model 3 production and continues "to focus on capital efficiency while also investing in battery cell, pack and energy storage production at Gigafactory 1. It also forecast that both Model 3 and solar roof launches are on track for the second half of the year.
This company is firing (no pun intended) on all cylinders