00:00okay so Tesla reported earnings
00:01yesterday and jumped some 10% plus into
00:04the after hours and held that run into
00:06today Market session for contacts Tesla
00:09stock is down some 35% year-to date and
00:11some 60% from all-time highs reached in
00:142021 and quite frankly I mean the
00:16earnings report itself is pretty damn
00:18bad it made for some pretty awful
00:20headlines like Tesla profits drop 55%
00:23and this comes at the same time as
00:25Outlets have been reporting that Tesla
00:27is laying off thousands and thousands of
00:29workers however at the same time must
00:31gave some hope he said that cheaper
00:32models are coming on an accelerated time
00:35frame something Wall Street applauded he
00:36also teased an upcoming Catalyst that
00:38will be quote the biggest asset value
00:41appreciation in history which many are
00:42taking to suggest that the next wave and
00:44the next uptrend in Tesla stock is
00:47coming right around the corner so in
00:48today's video I want to break down
00:50rather violently what all of this means
00:52what it means for Tesla stock and how
00:54you can make money off this and of
00:56course as always if you're the one
00:57taking the risk you got to be the one
00:58doing the ultimate frisk lots of people
01:00they get real risky before doing their
01:02frisky and before we get into it a full
01:04disclaimer here we did alert Tesla puts
01:05for zip Trader options members back on
01:07March 22nd and those ran some 89% to
01:11highs as of a couple days ago they were
01:13a powerful way to benefit from the
01:14downtrend in Tesla stock a stock that
01:16routinely has massive massive dippy
01:18deito bear cycles and then massive
01:20massive rally Rito Cycles which by the
01:23way if you want our options alerts and
01:24our step-by-step video lessons on how to
01:26trade options well we do have a flash
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01:31coupon code down below let's get to work
01:33here so let's talk earnings report we're
01:35going to start with the earnings you
01:36look at the deliveries q1's estimate was
01:38at 449,000 and some change and well
01:42Tesla came in well under that at under
01:44400,000 and this was the worst quarter
01:46for deliveries in the last five reports
01:49total Automotive revenues dumped 133%
01:51When comparing q1 2024 to q1 of 2023
01:55from 19.9 6 billion to
01:5717.375 billion but the drop is even
02:00worse when comparing that q1 to Q4 of
02:022023 going from 2.56 3 billion to 17.375
02:07billion that's actually about a 19% drop
02:09from last quarter's report now you had
02:11some picking up in the energy generation
02:13and storage Revenue as well as services
02:14and other Revenue sources however these
02:17are such a small portion of the overall
02:19revenue and they don't make up for the
02:20bigger picture which means that net you
02:22saw Revenue dump 9% year-over-year and
02:24total gross profit dump 18%
02:26year-over-year on top of that the gross
02:29margin is to Crunch Captain Crunch over
02:32here operating expenses Are Climbing
02:34dramatically year-over-year income from
02:35operations more than cut in half
02:38operating margin crunching adjusted eah
02:41down 21% year-over-year adjusted ibah
02:43margin again crunching Captain mck
02:45crunchy MC crunchy net income gap and
02:47non-gap cut about a half EPS Gap and non
02:51Gap cut about a half net cash provided
02:53by operating activities down about 90%
02:56Capital expenditures the expenditures of
03:00free cash flow down by
03:03674 and in terms of one of the only good
03:05comps we have year-over-year while cash
03:06and cash equivalence are up about 20%
03:09now in terms of how this report fared
03:10versus analyst expectations well Tesla
03:13missed on EPS by 99.1% and on Revenue by
03:174.29% so overall folks rough quarterly
03:19report to say the least and there's a
03:21few clear reasons why markets still
03:23rallied on this report which we'll get
03:24to a little bit later but first why are
03:26these year-over-year Trends so bad this
03:28is something that you really got to
03:30understanding if you want to understand
03:31the deal with Tesla stock right now well
03:33one reason is Tesla reduced their
03:34vehicles average selling price
03:36year-over-year which is crunching
03:37revenue and crunching profit margins
03:39another reason is the Cyber truck also
03:41was extremely expensive and timec
03:43consuming to get off the production ramp
03:45another reason is the updated model 3
03:47had a very slow gradual ramp itself that
03:49delayed overall production Tesla also
03:51reported an arson attack at the
03:53gigafactory over in Berlin and really
03:55Tesla's also seen some industry
03:57headwinds as Tesla reported themselves
03:59that Global EV demand is down and I'm
04:01sure the higher interest rates aren't
04:03helping too much either but overall if
04:04you do a little bit of digging you find
04:05that there's one major reason that tesel
04:08numbers are looking bad right now and
04:09that's because of the phase that they're
04:10in they're in a capital expenditure a
04:13investing in their business stage if you
04:15read through the reports Tesla right now
04:17is focusing on deploying Capital into
04:19R&D and their overall infrastructure
04:21from their earning slide it says quote
04:23while many are pulling back on their
04:25Investments we are investing in future
04:27growth including our AI infrastructure
04:29production capacity our supercharger and
04:31service networks and new products
04:33infrastructure with 2.8 billion of
04:35capital expenditures in q1 and they say
04:38they earmarked about 1 billion
04:39specifically for AI development now 2.8
04:42billion in total Capital expenditures
04:44for network and Ai and so on and so
04:46forth may not sound like much for a
04:48company that was once valued at over a
04:49trillion bucks but when you're going and
04:51you're comparing the net income of q1 of
04:532024 of 1.29 billion to last year's 2513
04:57billion in net income it makes a big
04:59difference I mean you cut half of that
05:002.8 billion in capital expenditures and
05:03all of a sudden you have an increase in
05:05net income year-over-year and not a
05:06decrease right so if they had just
05:08simply not deployed that Capital into
05:10Capital expenditures well all of a
05:12sudden the report would show an increase
05:14on many metrics that analysts are
05:16concerned about so that means that if
05:17you're getting into why Tesla is
05:19rallying right now it's because
05:20investors are looking at a stock that
05:22has been decimated and at the same time
05:25they are privy to the idea that this was
05:27simply a scaling up investing and
05:29building year for Tesla this was a year
05:31where they had to invest a lot of money
05:33in order to scale up for the next phase
05:35Tesla sense Inception has gone into
05:37different eras where all of a sudden
05:39they had to invest tons of money things
05:40looked Bleak and then all of a sudden
05:42they had a massive win and then back to
05:44things looking Bleak and investing tons
05:46and that goes over and over again right
05:48now we're in that investing tons Bleak
05:50stage but in terms of accomplishments
05:52Tesla is already reporting Tesla
05:53increased AI training compute by more
05:56than 130% in q1 they reported record
05:59energy storage deployment of 4.1 gaw
06:01they produced over 1,000 cyber trucks in
06:03a single week in April which is pretty
06:05damn that's a pretty damn big
06:06accomplishment considering how hard
06:08these things are to produce which by the
06:09way my grandma thought these cyber
06:11trucks were electric garbage trucks I
06:13had explained to her that no they're not
06:14garbage trucks they're revolutionary
06:16trucks in terms of other accomplishments
06:18they increase supercharger connectors by
06:2027% supercharger stations by 26% mobile
06:24service Fleet by 12% Tesla locations by
06:2626% you're also seeing a pretty
06:29exponential climb in communative miles
06:31driven with their full self-driving beta
06:33and their Tesla AI trading capacity so
06:35again when you're looking at the overall
06:36report and you're saying wow that report
06:37looks pretty damn shidy well again
06:39you're comparing this year-over-year in
06:41a year where they're basically just
06:43investing in their business model for
06:45future growth waves and the rest of 2024
06:47will likely continue to be one of those
06:49growth years from the report quote our
06:51company is currently between two major
06:53growth waves the first one began with
06:55the global expansion of the model 3/
06:57platform and we believe the next one
06:59will be in appreciated by advances an
07:00autonomy and introduction of new
07:02products including those built on our
07:03next Generation vehicle platform in 2024
07:06our vehicle volume growth rate may be
07:08notably lower than the growth rate
07:09achieved in 2023 as our teams work on
07:12the launch of the Next Generation
07:13vehicle and other products in 2024 the
07:15growth rates of energy storage
07:16deployments and revenue in our energy
07:18generation and storage business should
07:20outpace the automotive business so here
07:22they're saying hey we're focusing on the
07:23next stage for our Automotive business
07:26and we're also scaling our energy
07:28generation and storage business in and
07:29services business but what is the next
07:31big growth wave for what is still
07:33primarily their main business which is
07:34the car business well they said quote we
07:36have updated our future vehicle lineup
07:38to accelerate the launch of new models
07:40ahead of our previously communicated
07:42start of production in the second half
07:44of 2025 this update may result in
07:46achieving less cost reduction than
07:47previously expected but enables us to
07:49prudently grow our vehicle volumes in a
07:51more capex efficient manner during
07:53uncertain times this would help us fully
07:55utilize our current expected maximum
07:57capacity of close to 3 million Vehicles
07:58enabling more than 50% growth over 2023
08:01production before investing in new
08:03manufacturing lines okay so here they
08:05are basically saying that they are
08:06accelerating the lodge time of their
08:08cheaper models and teasing that this
08:10next growth wave is really going to
08:11start a lot sooner than expected or at
08:13least sooner than expected before that
08:15mid 2025 originally planned production
08:17date which this is something that
08:18analysts in Wall Street love to hear
08:20because that's where they really see the
08:22next wave of money coming for Tesla okay
08:23now let's go ahead and talk about the
08:24musk of Elon so musk suggested that
08:26investors look bigger picture once again
08:28by insisting that Tesla is not a car
08:30company and if you value it as such
08:32you're going to be missing the bigger
08:33Point here's what he said verbatim quote
08:35we should be thought of as an AI
08:37robotics Company If You value Tesla as
08:40just an auto company it's just the wrong
08:42framework if you ask the wrong question
08:44then the right answer is impossible so
08:46obviously nothing new from a rhetoric
08:48standpoint from musk we've heard this
08:49before but what he's really gearing
08:51investors towards here and saying this
08:52on the earnings call is that is that hey
08:54wait look a second this earnings report
08:56was bad but you're valuing the company
08:58wrong if you're criticizing us for this
09:00earnings report where we're literally
09:01just investing in scaling up and doing
09:03what our mission has always been now
09:04critics will say that he's trying to
09:06shift Focus away from the bad
09:07performance and onto all of these other
09:09p in this guy stuff but but if you look
09:11at all of the other times throughout
09:13history where he's done this tactic
09:15usually he's right it's just on a
09:16delayed time frame when the results
09:18start pouring in and what he's really
09:19gearing investors towards here is this
09:21event that he calls the biggest asset
09:23value appreciation in history and of
09:25course what he's talking about here is
09:26the long- awaited full self-driving and
09:28building an overall autonomous fleet of
09:31cars now again he's been talking about
09:33this for a long while but they continue
09:34to make progress and this continues to
09:36be closer and closer to reality here's
09:38the full quote on what he said quote the
09:39way to think of Tesla is almost entirely
09:41in terms of solving autonomy and being
09:43able to turn on that autonomy for a
09:45gigantic Fleet and I think it might be
09:47the biggest asset value appreciation in
09:49history when that day happens when you
09:51can do unsupervised full self-driving
09:53now in terms of the next big Catalyst on
09:55this well Tesla will be revealing the
09:57robo taxi on August 8th of this year
09:59they're saying this is going to be
10:01purpose-built which many are taking and
10:03speculating to mean that it's going to
10:04lack traditional driving controls such
10:06as steering wheels or pedals and
10:07specifically just serve as an autonomous
10:09taxi which as investors look at this and
10:12see that roll off the lot and start
10:13seeing Regulators decide whether or not
10:15they want to approve it in their
10:16localities well that's going to provide
10:18a lot of opportunity for rally ritos and
10:20a lot of risk on Capital to pour back
10:22into Tesla they previewed an autonomous
10:24ride hailing app now obviously if you
10:26were buying Tesla for robo taxi or
10:28autonomous Fleet predictions you're
10:30going to be waiting a while for these to
10:31become really really mainstream but the
10:33bigger Point here is that Tesla has
10:34painted a picture quarter over quarter
10:35that we're getting closer and and really
10:37as their full self-driving beta miles
10:39exponentially increase into the billions
10:41and the Tesla AI training capacity
10:43continues to Skyrocket it's just
10:45becoming more and more plausible that
10:47this is going to become a reality now at
10:49the earnings Q&A a Tesla investor asked
10:51quote what is Tesla's current assessment
10:53of the pathway toward regulatory
10:54approval for unsupervised FSD in the US
10:57and how should we think about the
10:59appropriate safety threshold compared to
11:01human drivers and this is his response
11:02listen very carefully here it's quote
11:04quote it's actually been pretty helpful
11:06that other autonomous car companies have
11:07been cutting a path through the
11:09regulatory jungle that's actually quite
11:11helpful and they have obviously been
11:13operating in San Francisco for a while I
11:14think they got approval for the city of
11:16La so these approvals are happening
11:18rapidly I think if you've got at scale a
11:20statistically significant amount of data
11:21that shows conclusively that the
11:23automotive car has let's say half the
11:25accident rate of a human driving car I
11:27think that's difficult to ignore because
11:29at that point stopping autonomy means
11:31killing people so I actually do think
11:33that there will be significant
11:34regulatory barriers provided there was
11:36conclusive data that the autonomous car
11:38is safer than the human driven car and
11:40in my view this will be much like
11:41elevators elevators used to be operated
11:43by a guy with a relay switch but
11:46sometimes that guy would get tired or
11:47drunk or just make a mistake and shatter
11:49somebody in half between floors so now
11:50we just get into an elevator and press a
11:52button we don't think about it in fact
11:54it's kind of weird if somebody is
11:55standing there with a relay switch and
11:57that will be how cars work you you just
11:59summon the car using your phone you get
12:00in it takes you to a destination and you
12:02get out so here musk made a very
12:04convincing point to argue for why
12:06Regulators are going to be very very
12:08very much compelled to eventually
12:10approve autonomous vehicles because it's
12:12a public safety risk if they don't now
12:14arguably right now it's a public safety
12:15risk to completely approve of them as of
12:17today it seems like they're still far
12:18more dangerous than regular cars but at
12:20some point once they start really
12:21racking up those billions of beta miles
12:24all of a sudden that whole game is going
12:26to change and we're in the process of
12:27that happening right now and that's what
12:29musk is portraying here and then he
12:31later goes on to argue that we are going
12:32to see some 7 million cars in a year or
12:35so and then eventually tens of millions
12:37of cars by the end of the decade which
12:38will have this capability so in summary
12:40Tesla had a bad quarterly report they
12:42projected fairly poor guidance expecting
12:44even lower volume but Tesla also said
12:46this was going to be a building quarter
12:48and a prep before the next growth wave
12:50they also reported significant progress
12:52on many different areas of their
12:53infrastructure and software development
12:56as well so overall the summary takeaway
12:58here is this is a building quarter
13:00before the next growth wave which should
13:01be expected to happen sometime at the
13:04end of this year or in early 2025 now in
13:07terms of Tesla stock and my thoughts on
13:08it well I think that this uptrend is
13:10likely not going to lead to a broader
13:12reversal just yet I believe that markets
13:14are a bit more risk averse right now and
13:16we are in a stagnating Range even in
13:18some of the companies that are reporting
13:19huge year-over-year profit growths and
13:21huge huge Revenue growths so I would
13:23argue if this run lasts for a week or
13:25two it's just going to end up getting
13:26bludgeoned again and the real dip by
13:28cycle and recover y won't happen until
13:30later this year or maybe right before
13:32that widespread production of the
13:34cheaper models starts happening so my
13:36take with Tesla stock is probably you're
13:38looking at a Q4 2024 rebound or a q1
13:422025 rebound I don't believe the rebound
13:45that you're seeing right now in Q2 is
13:47going to last long I think you're
13:48probably more likely than not just going
13:50to be stagnating within range until you
13:52get to Q4 at minimum so what does that
13:54mean for you now well it means if you
13:56like the stock accumulated at good deal
13:58priz and simply wait and Halt and if
14:01you're a Trader and the technical
14:02suggest another downtrend emerging maybe
14:04trade puts if you need help spotting
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14:26timed so anyways that caps off today's
14:28video we'll see you in the next one
