The earnings dissection | behind Tesla's thrilling roller coaster

Author | U.S. Stock Study Club

Tesla released a new quarterly earnings report after the US stock market on Wednesday, and the stock price experienced a sharp fluctuation, so let's review what happened first:

First, let's talk about the situation in the next session. Tesla opened and the broader market opened higher and went higher, mainly because the bulls gathered at the Fed meeting to say something to ease and appease the market that fell next. But when Powell spoke, it collapsed again - although the tone given by the old man was basically within expectations, including the end of the tape in March, the start of the interest rate hike and the reduction of the balance sheet, etc., and the previous market transaction in March to raise interest rates by 50bps, immediately began to shrink the table compared with the already eased, but the bad is that Powell's sentence: "Do not rule out the future every meeting to raise interest rates" (there are 7 meetings left this year), the market's interpretation is to directly remove the three words "do not rule out", the stock index dived.

Back to Tesla, after the hours of the financial report appeared a wave of nearly 6% plunge, is the financial report a problem?

Revenue of $17.72 billion vs. expected $16,408 million; Adjusted EPS $2.54 vs.2.36% expected. As you can see quite intuitively, this is a very beautiful double beat. The reason for the dive is mainly that the market interpretation EPS is not too much (beat 7.6%). But that was due to the one-time tax on the exercise of Musk's options, and the EPS was about $2.80 after excluding this factor, which exceeded expectations by 10.2%.

In addition, coupled with the guidance of lao ma: delivery at a rate of 50% in the next few years, 50% delivery growth can be achieved this year with only frepmont and Shanghai factories, fully autonomous driving achieved this year, the first use of humanoid robot Optimus, 4680 tram delivery this quarter, etc., market confidence is greatly boosted, a wave of pull-up nearly 4%. However, in the end, it still closed down 0.8%, the main impact was that it did not push new models this year, and the uncertain delivery time of the high-hope cyber, which dampened market confidence, after all, the previous order backlog exceeded 1.5 million.

Reasoning this financial report and guidance is very good, so that if it falls, it belongs to the bone in the egg. Of course, the rise and fall before and after the market is not so important, and it is decisive during the session on Thursday. Judging from the fact that the current index is still diving, Tesla's stock price may be dragged down by the broader market and less optimistic.

Take a closer look at the data:

Tesla delivered 308,600 units in 21Q4, up 71% year-on-year and 27.9% month-on-month, much higher than the 263,000 vehicles previously predicted by analysts, and the growth model is stable (the 50% guidance given by Lao Ma is also relatively conservative, and the probability of subsequent growth continues to exceed expectations). A clear trend can also be seen from the comparison of historical delivery growth rates - Tesla's red cloud-piercing arrow is unstoppable.

In addition, DOS (Days of Supply) has declined continuously, from 30 days in 19Q1 to 4 days in 21Q4, which intuitively reflects the tightness of demand behind it, and it is difficult to find a car (for example, Q4 China's official website shows that the delivery time of the Model Y standard endurance version has been adjusted from the earlier 6-10 weeks to 10-14 weeks).

Tesla's revenue and delivery growth were consistent, and the growth model was very good, with Q4 tram revenue of $15.97 billion, up 71% year-on-year. Cost control has also always been Tesla's advantage, in the tight supply chain environment, Tesla gross margin is still steadily improving, from 24.1% in 21Q1 to 30.6% in 21Q4. Behind this is excellent supply chain management capabilities, as well as production efficiency (such as integrated die casting machines).

The overall revenue is consistent with gross profit and trams, after all, the current volume of trams is the absolute focus. In the future, with the continuous improvement of computing power, the implementation of full automatic driving, and the optimization of software platforms, Tesla's software revenue is expected to become the second growth momentum (similar to Apple), which is also where Tesla gives people more room for imagination.

From the data model, we can intuitively see that Tesla's net profit and cash flow situation are getting better and better, and the financial situation is of high quality. Operating cash flow and free cash flow both improved significantly in the first quarter, with free cash flow increasing by 49% year-on-year to $2.775 billion, and free cash flow for the full year of 21 years was $5.015 billion, an increase of 80% year-on-year.

In summary, Tesla's financial report is quite high-quality. According to the relatively conservative 50% growth rate guideline of the old horse, the 23-year p/e is expected to be about 56x, and the probability of PEG is less than 1x, coupled with the high certainty of growth, which is the cheapest among the giants. Under the current fluctuating macro environment, Tesla's valuation may still be killed, but I believe that this excellent company will eventually prove itself with performance again and again, through market volatility.

The road ahead is bumpy, and the bulls sit firmly.