Company Summary
Tesla, Inc. (formerly Tesla Motors, Inc.) is an American automotive and energy company based in Palo Alto, California. The company specializes in electric car manufacturing and, through its SolarCity subsidiary, in solar panel manufacturing. It operates multiple production and assembly plants, notably Gigafactory 1 near Reno, Nevada, and its main vehicle manufacturing facility at Tesla Factory in Fremont, California. As of June 2018, Tesla sells the Model S, Model X and Model 3 vehicles, Powerwall and Powerpack batteries, solar panels, solar roof tiles, and related products.
Tesla was founded in July 2003, by businessmen Martin Eberhard and Marc Tarpenning, under the name Tesla Motors. The company's name was derived from physicist Nikola Tesla. In early Series A funding, Tesla Motors was joined by Elon Musk, J. B. Straubel and Ian Wright, all of whom are retrospectively considered co-founders of the company. Musk, who serves as chairman and chief executive officer, said that he envisioned Tesla Motors as a technology company and independent automaker, aimed at eventually offering electric cars at prices affordable to the average consumer. Tesla Motors shortened their name to Tesla in February 2017.
The Tesla Factory is an automobile manufacturing plant in south Fremont, California, and the principal production facility of Tesla, Inc.. The facility was formerly known as New United Motor Manufacturing, Inc. (NUMMI), a joint venture between General Motors and Toyota. The plant is located in the East Industrial area of Fremont between Interstates 880 and 680, and employed around 10,000 people in June 2018.
Growth
It has been state that Q3 2018 was a historic quarter for Tesla. Model 3 was the best-selling car in the US in terms of revenue and the 5th best-selling car in terms of volume. With average weekly Model 3 production through the quarter (excluding planned shutdowns) of ~4.3K units per week, Tesla has achieved GAAP net income of $312M. Tesla has also delivered on its internal cost efficiency targets, leading to GAAP Model 3 gross margin of ~20%, surpassing its guidance. Finally, Tesla has increased its total cash in hand by $731M and it had free cash flow (operating cash flow less capex) of $881M despite less than 10% of that amount coming from key working capital items (payables, receivables, and inventory). Model 3 is attracting clients of both premium and non-premium brands, making it a mainstream product.
Tesla's Revenue & Gross Margin has been stated as follows:
Automotive revenue in Q3 increased by 82% sequentially over Q2, mainly due to an increase in Model 3 deliveries. In Q3, Tesla has recorded $52M in ZEV credit sales compared to zero in Q2.
With the adoption of the new revenue recognition standard starting January 1, 2018, lease accounting generally applies to vehicles directly leased by Tesla without using bank partners. Only 3% of vehicles delivered in Q3 were subject to lease accounting.
GAAP Automotive gross margin improved to 25.8% in Q3 from 20.6% in Q2, while non-GAAP Automotive gross margin improved to 25.5% in Q3 as compared to 21.0% in Q2.
At an average Model 3 production rate of about 4.3K per week in Q3 (excluding planned shutdowns), Model 3 gross margin grew to above 20%. The mix of the Model 3 Performance version was only slightly higher than the Performance mix of Model S and X. This margin growth was driven by a higher production rate while keeping fixed costs stable, significant reductions in manufacturing costs through lower labor hours per unit, lower scrap rate, lower material costs, and higher average selling price.
Gross margin of Model S and X continued to improve sequentially even though the average selling price per vehicle declined slightly. Model S has been in production for over six years, yet Tesla continues to achieve efficiencies in material cost and other manufacturing costs.
Service and Other revenue in Q3 increased by 21% compared to Q2. This was mainly due to higher used car sales.
Service and Other gross margin loss in Q3 was less than in Q2. Total gross loss of Service and Other remained relatively stable. This was in line with Tesla's expectations.
Total GAAP operating expenses decreased to $1.11B in Q3, which was 11% less than in Q2. Excluding one-time restructuring and other costs, operating expenses decreased by 5% sequentially as Tesla is seeing the benefit of ongoing cost reduction efforts.
Interest and Other expenses were $145M in Q3.
There were approximately 171M basic shares outstanding at the end of Q3.
Forward-Looking Opinions
Electric Vehicle CAGR is approximated at 23.1% by 2024, to pass $500B market size, thereby it is a proven growing sector. Additionally, Tesla has been a settled pioneer and relatively successful first mover in the sector, and Audi, Mercedes-Benz and NIO are also joining to back this initiative up as first mover companies in the sector. It is without the doubt that one of Tesla's competitive advantage is deeply rooted tax benefits, in the triangle of energy, manufacturing, and research, wherein the U.S. has been continuously suffering from in the past decade, especially the manufacturing sector, which is a key economical factor, affecting the entire capital markets.
Chief Financial Officer
Mr. Deepak Ahuja brings more than 20 years of global automotive financial experience to the Tesla team. As Chief Financial Officer, Mr. Ahuja brings invaluable insight of a well-versed industry veteran to help Tesla become a leading automobile company in the world.
Prior to originally joining Tesla Motors in 2008, Mr. Ahuja was the Controller of Small Cars Product Development at Ford with the goal of bringing several exciting fuel-efficient automobiles to the North American market. Previously, Mr. Ahuja was CFO for Ford of Southern Africa, a $3 Billion subsidiary where he oversaw the finance, legal and IT functions. Prior to that, Mr. Ahuja served as CFO for Auto Alliance International, a joint venture between Ford and Mazda with over $4 billion in revenue. His career at Ford included assignments in all aspects of the business, including Manufacturing, Marketing and Sales, Treasury, Acquisition and Divestitures. Before joining Ford, Mr. Ahuja worked as an engineer for Kennametal, Inc. near Pittsburgh, PA for almost 6 years and developed two new ceramic composites cutting tools for machining of aluminum alloys in aerospace and automotive industries. Mr. Ahuja was Tesla’s CFO between 2008 and 2015 and returned to Tesla as CFO in February 2017.
Mr. Ahuja holds bachelor's and master's degrees in Materials Engineering from Banaras Hindu University and Northwestern University, respectively and an MBA from Carnegie Mellon University.
Financial information are summarized as follows:
Statistics
Shares Outstanding: 171M
Average Daily Volume: ~11M
Market Cap: ~53B
52-Week High: $244.59
52-Week Low: $387.46
Forward PE: NA
Annual Dividend/Dividend Yield: $0.00 / 0.00%
Annual Revenue: ~$7.0M
Institutional Ownership: ~68.3%
1-Month Return: ~8.9%
3-Month Return: ~23.2%
Next Earnings Report Date: NA
ESP: -$6.45
Revenue Per Employee: ~$431,681
Money Flow Ratio (Balance at 1.00): ~1.08
Profitability (~Sector Average %)
Revenue Growth: ~67.9% (~5.9%)
Gross Margin: ~16.5% (~15.3%)
Return on Equity: -42.8% (~14.8%)
Net Margin: -3.0% (~3.2%)
Debt (~Sector Average %)
Current Ratio: 0.8 (~1.0)
Debt-to-Capital: 65.1% (~68.4%)
Interest Funding: ~420% (~11.5%)
Interest Coverage: ~1.2 (~6)
Dividend (~Sector Average %)
Dividend Growth: NA (~2.4%)
Dividend Payout: NA (~30.5%)
Dividend Coverage: NA (~8.3)
Dividend Yield: NA (~0.00%)
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12-Month Price Target
Mean: $397.32
High: $441.08
Low: $298.60
Earnings Surprise
Positive (+9.3%)
Trade and Investment Gradings
Stock gradings from strongest (+++) to weakest (---) are as follows:
60-Month Investment: +++
36-Month Investment: +++
12-Month Investment: +++
6-Month Investment: ++
3-Month Investment: +
1-Month Investment: +
1-Day Trade: +
2-Day Trade: Neutral
7-Day Trade: Neutral
1-Day Short-Sell: -
2-Day Short-Sell: --
7-Day Short-Sell: ---
https://aicody.com/articles/stocks/tesla-inc-automotive-electric-vehicles-stock-analysis-grading-trade-investment-forecast-tl2h7mfjwi79qks3/
Tesla, Inc. (formerly Tesla Motors, Inc.) is an American automotive and energy company based in Palo Alto, California. The company specializes in electric car manufacturing and, through its SolarCity subsidiary, in solar panel manufacturing. It operates multiple production and assembly plants, notably Gigafactory 1 near Reno, Nevada, and its main vehicle manufacturing facility at Tesla Factory in Fremont, California. As of June 2018, Tesla sells the Model S, Model X and Model 3 vehicles, Powerwall and Powerpack batteries, solar panels, solar roof tiles, and related products.
Tesla was founded in July 2003, by businessmen Martin Eberhard and Marc Tarpenning, under the name Tesla Motors. The company's name was derived from physicist Nikola Tesla. In early Series A funding, Tesla Motors was joined by Elon Musk, J. B. Straubel and Ian Wright, all of whom are retrospectively considered co-founders of the company. Musk, who serves as chairman and chief executive officer, said that he envisioned Tesla Motors as a technology company and independent automaker, aimed at eventually offering electric cars at prices affordable to the average consumer. Tesla Motors shortened their name to Tesla in February 2017.
The Tesla Factory is an automobile manufacturing plant in south Fremont, California, and the principal production facility of Tesla, Inc.. The facility was formerly known as New United Motor Manufacturing, Inc. (NUMMI), a joint venture between General Motors and Toyota. The plant is located in the East Industrial area of Fremont between Interstates 880 and 680, and employed around 10,000 people in June 2018.
Growth
It has been state that Q3 2018 was a historic quarter for Tesla. Model 3 was the best-selling car in the US in terms of revenue and the 5th best-selling car in terms of volume. With average weekly Model 3 production through the quarter (excluding planned shutdowns) of ~4.3K units per week, Tesla has achieved GAAP net income of $312M. Tesla has also delivered on its internal cost efficiency targets, leading to GAAP Model 3 gross margin of ~20%, surpassing its guidance. Finally, Tesla has increased its total cash in hand by $731M and it had free cash flow (operating cash flow less capex) of $881M despite less than 10% of that amount coming from key working capital items (payables, receivables, and inventory). Model 3 is attracting clients of both premium and non-premium brands, making it a mainstream product.
Tesla's Revenue & Gross Margin has been stated as follows:
Automotive revenue in Q3 increased by 82% sequentially over Q2, mainly due to an increase in Model 3 deliveries. In Q3, Tesla has recorded $52M in ZEV credit sales compared to zero in Q2.
With the adoption of the new revenue recognition standard starting January 1, 2018, lease accounting generally applies to vehicles directly leased by Tesla without using bank partners. Only 3% of vehicles delivered in Q3 were subject to lease accounting.
GAAP Automotive gross margin improved to 25.8% in Q3 from 20.6% in Q2, while non-GAAP Automotive gross margin improved to 25.5% in Q3 as compared to 21.0% in Q2.
At an average Model 3 production rate of about 4.3K per week in Q3 (excluding planned shutdowns), Model 3 gross margin grew to above 20%. The mix of the Model 3 Performance version was only slightly higher than the Performance mix of Model S and X. This margin growth was driven by a higher production rate while keeping fixed costs stable, significant reductions in manufacturing costs through lower labor hours per unit, lower scrap rate, lower material costs, and higher average selling price.
Gross margin of Model S and X continued to improve sequentially even though the average selling price per vehicle declined slightly. Model S has been in production for over six years, yet Tesla continues to achieve efficiencies in material cost and other manufacturing costs.
Service and Other revenue in Q3 increased by 21% compared to Q2. This was mainly due to higher used car sales.
Service and Other gross margin loss in Q3 was less than in Q2. Total gross loss of Service and Other remained relatively stable. This was in line with Tesla's expectations.
Total GAAP operating expenses decreased to $1.11B in Q3, which was 11% less than in Q2. Excluding one-time restructuring and other costs, operating expenses decreased by 5% sequentially as Tesla is seeing the benefit of ongoing cost reduction efforts.
Interest and Other expenses were $145M in Q3.
There were approximately 171M basic shares outstanding at the end of Q3.
Forward-Looking Opinions
Electric Vehicle CAGR is approximated at 23.1% by 2024, to pass $500B market size, thereby it is a proven growing sector. Additionally, Tesla has been a settled pioneer and relatively successful first mover in the sector, and Audi, Mercedes-Benz and NIO are also joining to back this initiative up as first mover companies in the sector. It is without the doubt that one of Tesla's competitive advantage is deeply rooted tax benefits, in the triangle of energy, manufacturing, and research, wherein the U.S. has been continuously suffering from in the past decade, especially the manufacturing sector, which is a key economical factor, affecting the entire capital markets.
Chief Financial Officer
Mr. Deepak Ahuja brings more than 20 years of global automotive financial experience to the Tesla team. As Chief Financial Officer, Mr. Ahuja brings invaluable insight of a well-versed industry veteran to help Tesla become a leading automobile company in the world.
Prior to originally joining Tesla Motors in 2008, Mr. Ahuja was the Controller of Small Cars Product Development at Ford with the goal of bringing several exciting fuel-efficient automobiles to the North American market. Previously, Mr. Ahuja was CFO for Ford of Southern Africa, a $3 Billion subsidiary where he oversaw the finance, legal and IT functions. Prior to that, Mr. Ahuja served as CFO for Auto Alliance International, a joint venture between Ford and Mazda with over $4 billion in revenue. His career at Ford included assignments in all aspects of the business, including Manufacturing, Marketing and Sales, Treasury, Acquisition and Divestitures. Before joining Ford, Mr. Ahuja worked as an engineer for Kennametal, Inc. near Pittsburgh, PA for almost 6 years and developed two new ceramic composites cutting tools for machining of aluminum alloys in aerospace and automotive industries. Mr. Ahuja was Tesla’s CFO between 2008 and 2015 and returned to Tesla as CFO in February 2017.
Mr. Ahuja holds bachelor's and master's degrees in Materials Engineering from Banaras Hindu University and Northwestern University, respectively and an MBA from Carnegie Mellon University.
Financial information are summarized as follows:
Statistics
Shares Outstanding: 171M
Average Daily Volume: ~11M
Market Cap: ~53B
52-Week High: $244.59
52-Week Low: $387.46
Forward PE: NA
Annual Dividend/Dividend Yield: $0.00 / 0.00%
Annual Revenue: ~$7.0M
Institutional Ownership: ~68.3%
1-Month Return: ~8.9%
3-Month Return: ~23.2%
Next Earnings Report Date: NA
ESP: -$6.45
Revenue Per Employee: ~$431,681
Money Flow Ratio (Balance at 1.00): ~1.08
Profitability (~Sector Average %)
Revenue Growth: ~67.9% (~5.9%)
Gross Margin: ~16.5% (~15.3%)
Return on Equity: -42.8% (~14.8%)
Net Margin: -3.0% (~3.2%)
Debt (~Sector Average %)
Current Ratio: 0.8 (~1.0)
Debt-to-Capital: 65.1% (~68.4%)
Interest Funding: ~420% (~11.5%)
Interest Coverage: ~1.2 (~6)
Dividend (~Sector Average %)
Dividend Growth: NA (~2.4%)
Dividend Payout: NA (~30.5%)
Dividend Coverage: NA (~8.3)
Dividend Yield: NA (~0.00%)
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Toyota Motor Corp (NYSE: TM)
12-Month Price Target
Mean: $397.32
High: $441.08
Low: $298.60
Earnings Surprise
Positive (+9.3%)
Trade and Investment Gradings
Stock gradings from strongest (+++) to weakest (---) are as follows:
60-Month Investment: +++
36-Month Investment: +++
12-Month Investment: +++
6-Month Investment: ++
3-Month Investment: +
1-Month Investment: +
1-Day Trade: +
2-Day Trade: Neutral
7-Day Trade: Neutral
1-Day Short-Sell: -
2-Day Short-Sell: --
7-Day Short-Sell: ---
https://aicody.com/articles/stocks/tesla-inc-automotive-electric-vehicles-stock-analysis-grading-trade-investment-forecast-tl2h7mfjwi79qks3/